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A group of economists at the National Bureau of Economic Research discovered a trend free market economist have noticed for decades: Low cost encourages demand. “Low-income students, even those with strong academic credentials, are unlikely to attend a highly selective college,” Susan Dynarski, C. J. Libassi, Katherine Michelmore and Stephanie Owen write in a report that NBER released this month. “With a field experiment, we test an intervention to increase enrollment of low-income students at the highly selective University of Michigan.”

“We contact students (as well as their parents and principals) with an encouragement to apply and a promise of four years of free tuition and fees upon admission. Materials emphasize that this offer is not contingent on completing aid applications (e.g., the FAFSA or PROFILE). Treated students were more than twice as likely to apply to (67 percent vs. 26 percent) and enroll at (27 percent vs. 12 percent) the University of Michigan.”

Dynarski and Owen toil at the University of Michigan, Michelmore works at Syracuse University and Libassi at the College Board.

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