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Education Statistics Quarterly
Vol 5, Issue 3, Topic: Elementary and Secondary Education
Getting Ready to Pay for College: What Students and Their Parents Know About the Cost of College Tuition and What They Are Doing to Find Out
By: Laura J. Horn, Xianglei Chen, and Chris Chapman
 
This article was originally published as the Executive Summary of the Statistical Analysis Report of the same name. The sample survey data are from the National Household Education Surveys Program (NHES).
 
 

Findings from surveys of adults in general (Ikenberry and Hartle 1998) and of parents of college-age children (Miller 1997) suggest that Americans place a high value on obtaining a college education, but that they have difficulty estimating college costs. This study uses data from the Parent and Youth Surveys of the 1999 National Household Education Surveys Program (NHES:1999) to investigate how much "college-bound"1 students in grades 6 through 12 and their parents know about the cost of attending college, and the relationships between their knowledge of college costs and how they go about preparing for college.2 It examines whether parents had started to save for their children's education, gathered information on financial aid, and knew about various tax credits to help offset costs. Students were asked about discussions they had with parents or teachers/counselors to learn about college costs, academic requirements, and financial aid availability.

The base sample of this report consists of 7,910 6th- through 12th-grade students who participated in the Youth Survey of NHES:1999. Parent data used in this report were collected through the Parent Survey of NHES:1999 from the parents of these students. Because of this sample design, the data can be used to analyze both students' own plans and their parents' plans for students' postsecondary education. Findings can be generalized to all 6th- through 12th-graders, but not to all parents of 6th- through 12th-graders. Student and parent cost estimates are compared against price data collected directly from postsecondary institutions.


Almost All Plan to Attend College

In 1999, the vast majority of 6th- through 12th-graders (94 percent) and their parents (96 percent) responded "yes" to the question "Do you think (you/your child) will attend school after high school?" Ninety-one percent of both students and their parents agreed that the students would attend college or some other type of postsecondary institution. Among students and parents who reported such plans, 45 percent of students and roughly one-half of parents thought the students would attend a 4-year college, while 17 percent of students and one-quarter of parents reported plans for students to attend a 2-year institution. The remainder (39 percent of students and 25 percent of parents) were undecided about the kind of postsecondary institution the students would attend.3


Acquiring Cost Information

High school students (in 9th through 12th grades) with plans to attend college and parents of 6th- through 12th-graders who also reported postsecondary plans for their children were asked if they had obtained information about what it would cost to attend. Eighteen percent of students and 30 percent of parents had done so. While students in 11th and 12th grades were more likely to have acquired cost information than their 9th- and 10th-grade counterparts, just 52 percent of 11th- and 12th-graders had acquired such information (figure A). A similar picture emerges when looking at the responses of their parents, with students in 11th and 12th grades more likely to have parents who had acquired cost information than students in 9th and 10th grades. An additional 11 percent of students in grades 11 and 12 thought they could accurately estimate tuition and fees, and an additional 17 percent of 11th- and 12th-graders had parents who thought they could accurately estimate tuition and fees. Considering both students and their parents jointly, about 38 percent of 11th- and 12th-grade students had either acquired information about college prices or thought they could estimate costs, and had parents who reported the same.

The likelihood of having knowledge of college prices increased with household income and parents' education for both students and parents. In addition, parents of White students were more likely than parents of either Black or Hispanic students, and White students more likely than Hispanic students, to report knowledge of college costs. Those individuals who are potentially least able to afford college were also most likely to lack information about the cost of attending.

Figure A. Among 9th- through 12th-graders and their parents who reported plans for the student to attend postsecondary education, the percentage distributions according to whether they had obtained college cost information, could estimate the costs, or could do neither: 1999
Figure A. Among 9th- through 12th-graders and their parents who reported plans for the student to attend postsecondary education, the percentage distributions according to whether they had obtained college cost information, could estimate the costs, or could do neither: 1999

NOTE: Detail may not sum to totals because of rounding.

SOURCE: U.S. Department of Education, National Center for Education Statistics, Youth Survey and Parent Survey of the 1999 National Household Education Surveys Program (NHES:1999).

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How Well Students and Parents Estimate 1 Year’s College Tuition

Students and parents who reported either that they had obtained college cost information or that they could accurately estimate the cost of tuition were then asked to provide an estimate of “1 year's tuition and mandatory fees” at the type of college the students planned to attend.4Overall, both students and parents substantially overestimated tuition amounts, especially for public institutions.5For example, the average yearly tuition that in-state undergraduates were charged at public 4-year institutions in 1998-99 was $3,247 (The College Board 1999).6 On average, students close to the age of enrollment (i.e., 11th- and 12th-graders) who planned to attend public 4-year institutions in-state and their parents estimated the yearly tuition to be between $5,000 and $6,000 ($5,366 for students and $5,799 for their parents) (figure B).

The distribution of tuition levels (also shown in figure B) illustrates how students and their parents overestimate tuition costs. While less than one-tenth of 1 percent of all students enrolled in public 4-year institutions (in-state) were charged $8,000 per year or more in tuition, approximately one-quarter of 11th- and 12th-grade students and their parents expected they would have to pay this much for a college education at 4-year in-state public institutions. The vast majority of students attending such institutions paid less than $5,000 in tuition per year. Similar patterns, but more modest differences, were found for private 4-year institutions (figure C). While 20 percent of undergraduates were charged $20,000 or more in annual tuition, 38 percent of 11th- and 12th-graders and 27 percent of their parents thought it would cost at least $20,000 annually to attend. However, when looking only at the overall average, no difference could be detected between parents’ estimates ($14,506) and the actual average tuition for private 4-year colleges ($14,709). Thus, parents of children who planned to attend private 4-year institutions appeared to be more aware of the costs at these institutions than their counterparts whose children planned to attend comparable public colleges.

Because college tuition varies substantially from state to state (Snyder and Hoffman 2002), further analyses were conducted to determine how accurately students and their parents could estimate tuition for the type of institution students planned to attend within their state of residence. Accurate estimates were defined as those within 25 per- cent of the actual state average.7 As shown in figure D, one-quarter of 11th- and 12th-graders and about one-third (31 percent) of their parents were able to provide accurate estimates. Moreover, both students and their parents were much more likely to overestimate than to underestimate tuition. Finally, 37 percent of 11th- and 12th-graders and 29 percent of their parents could not estimate yearly tuition for the type of college the students hoped to attend.

In looking at all students included in the survey (i.e., 6th- through 12th-graders) who were planning to attend postsecondary education, the likelihood of being able to estimate tuition accurately increased with household income. For their parents, both household income and parents' education level (i.e., the higher the level, the more likely they were to estimate accurately) were associated with the ability to estimate tuition.

Figure B. Among 11th- and 12th-graders and their parents who reported plans for the student to attend a public in-state 4-year institution, and who provided an estimate of tuition and fees, the percentage distributions of estimated tuition and fees for 1 year and the actual tuition and fees paid by undergraduates in 1998–99
Figure B. Among 11th- and 12th-graders and their parents who reported plans for the student to attend a public in-state 4-year institution, and who provided an estimate of tuition and fees, the percentage distributions of estimated tuition and fees for 1 year and the actual tuition and fees paid by undergraduates in 1998-99

1Does not include those who reported room and board in their estimates. Includes respondents who were undecided about where to attend but estimated tuition and fees for public 4-year institutions in their state.

2Does not include room and board costs.

NOTE: Detail may not sum to totals because of rounding.

SOURCE: U.S. Department of Education, National Center for Education Statistics, Youth Survey and Parent Survey of the 1999 National Household Education Surveys Program (NHES:1999). Actual tuition and fees published in The College Board (1999), Trends in College Pricing 1999.

Figure C. Among 11th- and 12th-graders and their parents who reported plans for the student to attend a private 4-year institution, and who provided an estimate of tuition and fees, the percentage distributions of estimated tuition and fees for 1 year and the actual tuition and fees paid by undergraduates in 1998–99

1Does not include those who reported room and board in their estimates.

2Does not include room and board costs.

NOTE: Detail may not sum to totals because of rounding.

SOURCE: U.S. Department of Education, National Center for Education Statistics, Youth Survey and Parent Survey of the 1999 National Household Education Surveys Program (NHES:1999). Actual tuition and fees published in The College Board (1999), Trends in College Pricing 1999.

Figure D. Among 9th- through 12th-graders and their parents who reported plans for the student to attend postsecondary education, the percentage distributions according to the accuracy of tuition estimates for 1 year’s tuition and fees at the type of college the student planned to attend: 1999
Figure D. Among 9th- through 12th-graders and their parents who reported plans for the student to attend postsecondary education, the percentage distributions according to the accuracy of tuition estimates for 1 year's tuition and fees at the type of college the student planned to attend: 1999

1An accurate estimate was defined as one within 25 percent of the average for the type of institution the student planned to attend in the state of residence.

NOTE: Detail may not sum to totals because of rounding.

SOURCE: U.S. Department of Education, National Center for Education Statistics, Youth Survey and Parent Survey of the 1999 National Household Education Surveys Program (NHES:1999). Actual tuition amounts from the 1998 Integrated Postsecondary Education Data System (IPEDS).


Getting Ready for College

Students and parents were asked separate questions in NHES:1999 about their preparations for college. Their responses provide information about parents’ plans for paying for their children’s college education and how actively students acquired information about the academic and financial requirements for attending college.

Parents’ plans to pay for their children's college education

Parents were asked if they had started saving for their child's postsecondary education or making other financial plans, if they had gathered information about financial aid, and whether they knew about the Lifetime Learning and/or HOPE Scholarship tax credits. The likelihood of parents reporting that they had begun saving or making other financial preparations to pay for their child's college edu-cation increased with household income. Parental planning was also related to students’ academic standing in school: as grade point average increased, so did the likelihood that parents reported saving money, gathering information about financial aid, and knowing about college tax credits. No relationship was detected between the proximity of students starting postsecondary education and their parents’ plans to pay for it. Focusing on students who intended to go to college, 63 percent of 11th- and 12th-graders and 59 per-cent of 9th- and 10th-graders had parents who had made some financial preparations. The apparent difference was not statistically significant. Similarly, there was not a detectable difference between the percentage of college- bound 9th- and 10th-graders (59 percent) and the percentage of college-bound 6th- through 8th-graders (57 percent) with parents who had made financial preparations.

A similar percentage (58 percent) of college-bound 11th- and 12th-graders' parents had sought information about financial aid availability, and about one-third (34 percent) were aware of the Lifetime Learning and/or HOPE Scholarship tax credits. Awareness of at least one of the tax credits increased with household income and parents' education levels.

Students' discussions with parents and teachers/counselors8

Students were asked if they had discussed with their parents or teachers (including counselors) the type of college to attend and the academic and cost requirements of that college. Students were also asked if they had sought information about the availability of financial aid. Nearly three-quarters of students (74 percent) reported that they had discussed the academic requirements of attending college with parents or teachers/counselors. And just over two-thirds (69 percent) reported having conversations about the type of college they expected to attend. However, half or fewer reported discussing college costs or financial aid with parents or teachers/counselors. As might be ex-pected, the likelihood of reporting such discussions increased as students approached college age. By 11th and 12th grades, over 90 percent of students reported having discussions about academic requirements or the type of college to attend, and about three-quarters (71 to 75 per-cent) reported discussions about college costs and financial aid.

Students' discussions about aspects of college had little re-lationship to either household income or parents' education levels. However, there was a positive relationship between students knowing what type of institution they wanted to attend and the likelihood of students discussing college cost requirements with their parents or their teachers/counselors. A positive relationship was also found between students assuming a role in family decisionmaking and the likelihood of students discussing college cost requirements with their parents or their teachers/counselors. In other words, as the likelihood of students knowing where they wanted to attend college or how involved they were in family decisionmaking increased, so did their likelihood of discussing college cost requirements. On the other hand, no association between student discussions of college cost requirements and either their household income or their parents' education was detected.

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Factors Related to Information Gathering and College Cost Awareness and Estimates

To determine what factors independently related to students' and parents' awareness of college costs, a multivariate analysis was conducted. "Cost awareness" used in the context of this report means students or parents had either obtained college cost information or reported that they thought they could estimate the cost of tuition.

The multivariate analysis of students' and parents' cost awareness controlled for interrelated variables that reflected student characteristics, family background, students' high school experiences (including GPA), and parents' involvement in their children's school. After applying such controls, a number of variables remained significantly related to cost awareness (figure E).

For instance, there were positive relationships between students' and parents' cost awareness and students' grade level (11th- and 12th-graders and their parents were more aware than 9th- and 10th-graders and their parents); parents' education levels (college graduates were more aware than others); and reporting plans to attend private 4-year colleges or universities (compared with public 4-year institutions).

In some cases, results differed for students and parents. For example, Black students were more likely than White students to report cost awareness, while for parents the opposite was true: parents of Black students were less likely to be knowledgeable about costs than parents of White students. Although cost awareness among students was not associated with household income, there was a positive relationship between cost awareness and household income among their parents: those with household incomes over $75,000 were more likely to be knowledgeable about the costs than those with household incomes of $50,000 or less. In addition, male students were more cost aware than female students, but students' sex was not associated with parents' cost awareness. Parents' level of involvement in the schools was associated with their cost awareness, but not with students' awareness.

Finally, some variables pertained only to students or parents. If students had talked with their parents or with teachers/counselors about college cost requirements or about financial aid, they were more likely to be aware of college costs. Similarly, if parents had talked to someone or read financial aid materials, or if they knew about the availability of either the Lifetime Learning or HOPE Scholarships, they were more likely to be aware of college costs.

If cost awareness were high, one would expect a corresponding ability to accurately estimate tuition for the type of institution the student planned to attend. In fact, nearly identical results were found for students'’ and parents' cost awareness and ability to estimate the costs. That is, most variables related to cost awareness also were related to the ability to estimate 1 year's tuition accurately.

In the end, even after applying statistical controls, the results indicate that the level of awareness students and parents possess about the costs of attending college is positively related to either household income or parents’ education levels (or both). However, it is important to note that, regardless of family background, if parents had sought information about financial aid availability or if they knew about other means of offsetting costs (through tax credits), they were much more likely to know what it would cost to send their child to the college the child planned to attend. Similarly, if students had talked to parents or teachers/counselors about college costs, they too were better able to estimate the tuition of the college they planned to attend.

Figure E. Among 6th- through 12th-graders and their parents, factors associated with increased cost awareness or the ability to estimate accurately tuition and fees: 1999
Figure E. Among 6th- through 12th-graders and their parents, factors associated with increased cost awareness or the ability to estimate accurately tuition and fees: 1999

†Not applicable.

1Had either obtained college cost information or reported they could estimate tuition and fees.

2An accurate estimate was defined as one within 25 percent of average for the type of institution the student planned to attend in the state of residence.

NOTE: Sample includes students and their parents who reported plans for the student to attend postsecondary education. Each check indicates an attribute associated with increased cost awareness or the ability to accurately estimate tuition. For example, in the first line under “Students’ race/ethnicity,” Black students were more cost aware and were more likely than White students to provide an accurate tuition estimate. The opposite was found for parents.

SOURCE: U.S. Department of Education, National Center for Education Statistics, Youth Survey and Parent Survey of the 1999 National Household Education Surveys Program (NHES:1999). Actual tuition amounts from the 1998 Integrated Postsecondary Education Data System (IPEDS).

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Conclusions

The public places a high premium on getting a college education (Ikenberry and Hartle 1998; Miller 1997). However, recent media attention on rising college costs (Neusner 2002), combined with a general lack of knowledge about the affordability of many colleges (e.g., the average tuition at public 4-year colleges was $3,000 a year in 1998), may unnecessarily discourage some students and their parents from preparing for college.

The results of this analysis reveal that many middle and high school students and, to a lesser extent, their parents do not have an accurate idea of what it costs to attend college. Even among 11th- and 12th-graders who intended to enroll in college, roughly half of both students and their parents reported having knowledge of college costs. When asked to estimate 1 year's tuition, more students and their parents overestimated than underestimated the average amount. Furthermore, nearly 40 percent of 11th- and 12th-graders and nearly 30 percent of their parents could not estimate the cost of 1 year's tuition.

Not surprisingly, the younger the students were, the less aware they or their parents were of college costs. At a time when students still have the opportunity to plan for college and take requisite college preparatory courses (i.e., 9th and 10th grades), 69 percent of 9th- and 10th-graders and 47 percent of their parents could not estimate what it would cost to attend. It is possible that many students, with the encouragement of their parents, plan to attend no matter what the cost. However, the findings of this study also demonstrated a significant knowledge gap between lower and higher income families and between parents who ended their education at high school graduation and those who were college graduates.9 Thus, the students and parents who can least afford college and who would be most affected by the financial burden were also the least aware of how much it costs to attend.

On the other hand, regardless of parents' education and household income, students who were involved in family decisionmaking were more likely to seek out information about college academic requirements and financial aid through discussions with parents and teachers/counselors.

Similarly, regardless of income and education levels, parents who were involved in their children's school were more likely to have begun saving for their college education. In addition, compared with parents who reported low involvement in their children's school, highly involved parents were more aware of college costs.

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References

The College Board. (1999). Trends in College Pricing 1999. Washington, DC: The College Entrance Examination Board.

Ikenberry, S.O., and Hartle, T. (1998). Too Little Knowledge Is a Dangerous Thing, What the Public Knows and Thinks About Paying for College. Washington, DC: American Council on Education.

Miller, E.I. (1997). Parents' Views on the Value of a College Education and How Much They Will Pay for It. Journal of Student Financial Aid, 27(1): 7-20.

Neusner, N. (2002, September 30). Paying for College. U.S. News & World Report, 133: 82-106.

Snyder, T.D, and Hoffman, C.M. (2002). Digest of Education Statistics 2001 (NCES 2002-130). U.S. Department of Education, National Center for Education Statistics. Washington, DC: U.S. Government Printing Office.

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Footnotes

1This term is applied to all students who reported plans to attend any type of postsecondary institution.

2Parent reports are limited to information provided by parents of the sampled 6th- through 12th-grade students interviewed for the survey.

3Readers should keep in mind that the data collected from parents are representative of parents of the sampled students and not of all parents.

4The use of the terms "tuition" or "fees" is arbitrary. Some institutions only charge tuition, some only fees, and some both. For simplicity, the term "tuition" is used in the text to refer to tuition and/or fees.

5If undecided about 2- or 4-year institutions (about 39 percent of students and 25 percent of parents), estimates of public 4-year institutions were requested. If undecided about attending a public or private institution (about 14 percent of students and 10 percent of parents), estimates of public institutions were requested. If undecided about in-state or out-of-state attendance (about 4 percent of students and 3 percent of parents), estimates of in-state tuition were requested.

6The average yearly tuition reported does not take into account any financial aid students may have received that offset tuition. At the time the analyses were done for this report, data were not available from the 1998 Integrated Postsecondary Education Data System (IPEDS). Data from IPEDS are typically used for analysis of college costs. The equivalent estimate from the 1998 IPEDS is $3,229.

7The analysis also included accuracy levels at 15 percent and 50 percent of actual amounts with similar results (see appendix C in the full report).

8Students were asked if these discussions had occurred during the 1998-99 school year.

9Parents' education levels and household income are often highly correlated, and families where neither parent attended college are disproportionately represented among lower income groups. For example, in NHES:1999, 89 percent of students whose parents did not attend college were from families where the household income was $25,000 or less, whereas 69 percent of students with college-educated parents were from families where the household income was above $75,000.


Data source: The Parent Survey and Youth Survey of the NCES 1999 National Household Education Surveys Program (NHES:1999).

For technical information, see the complete report:

Horn, L.J., Chen, X., and Chapman, C. (2003). Getting Ready to Pay for College: What Students and Their Parents Know About the Cost of College Tuition and What They Are Doing to Find Out (NCES 2003-030).

Author affiliations: L.J. Horn and X. Chen, MPR Associates, Inc.; C. Chapman, NCES.

For questions about content, contact Chris Chapman chris.chapman@ed.gov

To obtain the complete report (NCES 2003-030), call the toll-free ED Pubs number (877-433-7827) or visit the NCES Electronic Catalog (http://nces.ed.gov/pubsearch).


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