Work It Out
Chapter 14
TABLE OF CONTENTS
Question 1 of 1
Step 1
Work It Out
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If Congress passed a privacy law making it illegal for colleges to ask for parents’ tax returns, that would tend to help students from families.
2:04
Correct! The availability of parent tax returns allows colleges to determine willingness to pay and charge accordingly through the allocation of financial aid, leading higher-income families to pay more. Without access to tax returns, higher-income families would see a reduction in the amount they have to pay after accounting for financial aid.
Sorry! Think about the information that colleges are able to glean from tax returns and how that information would influence the amount of financial aid allocated to each family. To review price discrimination, please see the section “Price Discrimination Is Common.”
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