Higher Education

a. Human capital theory and signaling theory are used by neoclassical economics to

explain an individual's decision to attend college. Provide a brief summary of each.

The U.S. has a broad array of government programs to support higher education-subsidized loans, non-subsidized loans, guaranteed loans, grants, a tuition deduction from taxable income, public colleges and universities with partial support from state governments, and more.

1. Provide an efficiency argument for the government to be involved in the provision of loans for higher education?
2. Provide an efficiency argument for the government to subsidize higher education.

Is there any other reason that government might subsidize higher education? Explain.