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Paying for Failure: Subsidizing Schools, Not Education


Government subsidies for higher education suffer from serious design defects that contribute to seemingly contradictory problems: (1) too few individuals earn college degrees because the United States underinvests in prospective students, and (2) too many students enroll in bad schools that leave them and society worse off than before they enrolled. Why would students overinvest in bad schools while they underinvest in education generally?