Hight, JosephIto, Alvin2014-01-152014-01-152014-01-15http://hdl.handle.net/10125/31571In higher education a flat tuition has traditionally been assessed each student regardless of his financial resources; public institutions charge a tuition that is less than the resource cost of educating the student. The difference is a subsidy that the taxpayers bear. Such a tuition structure results in subsidies to high income student who do not need them and discouragement to low income students for whom the subsidy is insufficient to enable them to attend institutions of higher education. Figure 1 illustrates a situation in which the total costs of education including tuition and living expenses are reflected in the Standard Student Budget (SSB). SSB1 represents the Standard Students Budget for a student paying a tuition that is near or at the resource cost of his education. SSB2 shows the position of a student whose education is being subsidized by a tuition that is less than the resource cost of education. The horizontal axis represents the income levels of students or their families. As income rises, above a certain point Y0 the ability to pay for education is positively related to income (College Scholarship Service, 1970). The difference between SSB1 and SSB2 is the subsidy that the state grants to all students. This subsidy is inadequate to permit low income students to pursue a higher education and results in “disincentives.” The upper income students who are capable of bearing the full resource cost of education receive “incentives” through the state subsidies.iv, 34 pagesAll UHM Honors Projects are protected by copyright. They may be viewed from this source for any purpose, but reproduction or distribution in any format is prohibited without written permission from the copyright owner.Term Project