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Higher Education by Michael B. Paulsen, Robert K. Toutkoushian (auth.), John C.

By Michael B. Paulsen, Robert K. Toutkoushian (auth.), John C. Smart (eds.)

Published each year considering the fact that 1985, the guide sequence presents a compendium of thorough and integrative literature experiences on a various array of themes of curiosity to the better schooling scholarly and coverage groups. each one bankruptcy offers a accomplished evaluate of analysis findings on a particular subject, evaluations the learn literature when it comes to its conceptual and methodological rigor, and units forth an schedule for destiny study meant to develop wisdom at the selected subject. The instruction manual specializes in twelve common components that surround the salient dimensions of scholarly and coverage inquiries undertaken within the overseas greater schooling neighborhood. The sequence is lucky to have attracted annual contributions from uncommon students through the world.

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Example text

However, students facing the more restrictive demand constraints Economic Models and Policy Analysis in Higher Education 37 represented by D1 will not increase their investment as a result of the increase in available subsidized student loan funds. For every level of investment beyond $1, the marginal interest cost of funds exceeds the marginal rate of return on investment. As a result, no increase in investment would be worthwhile for students facing demand D1. In Fig. 17, we use stair-step supply of funds curves to more fully illustrate the model’s predicted effects of increases in grants funds on investment in higher education.

Accordingly, if a policy was implemented that proved to be ineffective, then the resources could have been used in a more constructive manner and therefore an education stakeholder (students, parents, society) experience losses. It is imperative that educators and policy makers find ways to evaluate the likely impact of their policies when making decisions about them, either prior to or after implementation. Conceptual models such as those described above are indispensable to economists for conducting this type of work.

Such policies could help address, at least in part, the different availabilities of zero-marginalinterest-cost funds between higher- and lower-income students. If these policy changes move lower-income students from S1 to S2 (along D1), a new equilibrium and optimal level of investment would occur at point “b” where S2 intersects D1 and where $4 dollars are invested in higher education. As illustrated in Fig. 15, for all investment amounts from 0 to $4 the marginal rate of return exceeds the marginal interest cost of funds, making $4 the new equilibrium level of investment.

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