Four reasons Rand Paul's college tuition pander is a terrible -- and un-libertarian -- idea

3. It would drive up the price of tuition

It’s basic economics that, all else being equal, if something is subsidized, the cost will increase. There’s little doubt that if Americans were able to deduct the full cost of college tuition, colleges would respond by increasing tuition due to the heightened ability to pay. Thus, in the end, the financial burden of college or college attainment is unlikely to be affected. The primary result of the policy would be to provide a massive subsidy to colleges. There’s already evidence of this in the housing market in which there’s a deduction for mortgage interest payments. A 2012 study by the Swiss Finance Institute found that, “empirical evidence suggests that, contrary to popular wisdom, the [mortgage interest deduction] generally does not increase the ownership rate. This result is likely due to the fact that the [deduction] is capitalized into house prices, especially where housing supply is inelastic.”