The New Campus Housing Bubble

“That raises a public policy issue. Why should the federal government be lending $1.5 trillion that it has to borrow itself, often to young persons from moderately affluent families, in some cases continuing the lending for six, eight or ten years (through graduate and professional school)? More broadly and provocatively, why should taxpayers be funding state universities, a significant proportion of whose students are from affluent families often living in luxury housing? Why subsidize affluent kids to live in luxury with their swimming pools and marble counter tops? The data from Raj Chetty and associates show that the top American universities are filled with students disproportionately from the top quarter of the income distribution, so funding these schools is therefore likely highly regressive—middle or lower income taxpayers are helping fund the education of relatively affluent kids.”

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