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PEDAR: Executive Summary  How Families of Low- and Middle Income Undergraduates Pay For College: Full-Time Dependent Students in 1999-2000
Paying for College
Financial Need
Financial Aid
Types and Amounts of Aid
Relative Importance of Grants and Loans
Sources of Aid
Remaining (Unmet) Need
After Financial Aid
Help From Parents
Paying for College: A Summary
Research Methodology
Full Report (PDF)
Executive Summary (PDF)
 Paying for College: A Summary

Figures B1 and B2 show data for low- and middle-income students separately, with two horizontal bars for each institution type. The top bar in each set represents the average student budget and its two components: financial aid (excluding work-study) and what students and their families must pay (net price). The lower bar shows the known family effort: loans (including PLUS loans) and student earnings from work while enrolled (assuming that these earnings are used entirely for educational expenses). The averages shown include both aided and unaided students in order to indicate the relative contributions of the different amounts to the totals.

The circled numbers represent the expected family contribution (EFC). When the net price is greater than the EFC—that is, when the amount students and their families must pay is greater than the amount they are expected to pay—students have unmet financial need. A comparison of the EFC to work specifies how much of the family contribution theoretically could have come from student work while enrolled.6 The boxes on the right show the percentages of students whose parents (or others) helped pay their tuition and the percentages who lived at home.

For low-income students at each type of institution, the EFC fell short of the price students had to pay, even after financial aid. At public 2-year institutions, low-income students appeared to cover their educational expenses by receiving aid (primarily grants), living at home, and working while enrolled. At public 4-year institutions, they appeared to depend primarily on aid (both grants and loans) and their own earnings, with some help from their parents. While low-income students at private not-for-profit 4-year institutions received substantial amounts of aid, it is difficult to understand how they covered their educational expenses given the gap between the net price and EFC and the amount these students reported earning on their own, especially at private not-for-profit doctoral and liberal arts institutions where relatively few students lived at home. To meet their expenses, low-income students at private not-for-profit 4-year institutions may have reduced their standard of living below the institutionally determined budget; acquired additional funds through gifts or loans from grandparents, noncustodial parents, or others whose financial resources are not considered in the EFC formula; or used more of their income or savings than required by the EFC formula, to name some possible strategies.

At public institutions and private not-for-profit nondoctoral institutions, middle-income students and their families were in a better position than their low-income counterparts to cover their expenses. With access to student loans (and substantial grants at private not-for-profit nondoctoral institutions), these families, on average, generally appeared able to bring the net price into line with the EFC. At private not-for-profit doctoral institutions, however, despite grants and loans, there remained a relatively large unexplained amount of the net price to cover beyond the EFC.

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