In other words, Bennett argued, when colleges are aware that students have easy access to cheap loans to pay their bills, they’re more likely to hike prices.
This theory became known as the “Bennett Hypothesis.” Since then, as Uncle Sam created and expanded direct student lending programs, the Bennett Hypothesis has been hotly debated. Now, a team of economists has found evidence that subsidized loans have been a major reason why tuition has soared in one sector of higher education: graduate school.
Read more from The Hechinger Report.
