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Are you implying that need-blind admissions allows universities to increase tuition? The only two ways I could see raising tuitions as justified because of this is:

1. It costs more to provide grants to poorer students. 2. More competition (demand) and fixed supply increases the price of the good.

I'm unqualified to talk on the first point, and it seems kind of a stretch.

On the second point, I don't see how having more poor students lets you earn more. I suppose one possibility is that the government subsidy plays a huge role and the university is trying to tap into those funds. If not, I don't see how the increased demand would drive the price up. If you're admitting richer kids, they'd have the money to fork over anyway.

But I could just be missing something.

Well, here's just one example: not getting into financial aid bidding wars for particularly desirable students.

I'm not particularly interested in their justifications, more their real reasons. The biggest one for raising tuition per se is that it's entirely unrestricted money, they can spend it any way they want. The Federal government is pretty strict about where research overhead goes, and pesky alumni don't trust schools to do the right thing and restrict a lot of their donations (see this for why their concerns are entirely reasonable: http://en.wikipedia.org/wiki/Woodrow_Wilson_School_of_Public...)

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