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This article was originally published as an Issue in Focus, taken From The Condition of Education 1998. The numerous data sources are listed at the end of this article. | |||
Postsecondary education generates both individual and public benefits. College graduates with a bachelor's degree earn substantially more than those with only a high school education,1 and attending college enriches students' lives in other ways that are long lasting and extend to the next generation (Pascarella and Terenzini 1991). Society benefits from an educated population as well. In recent years, there has been evidence that education requirements for all types of occupations are growing and that the fastest growing occupations are those that require postsecondary training.2 Furthermore, many believe that increased participation in postsecondary education is crucial to maintaining a competitive position in the global economy.3 Federal and state governments encourage participation in postsecondary education and have tried to reduce price barriers so that postsecondary education is accessible. State subsidies to public institutions allow them to charge tuition that is substantially below the actual cost of education, while federal (and sometimes state) grant, loan, and work-study programs help provide financially needy students with the up-front money they need to invest in postsecondary education. Many institutions increase accessibility through their own financial aid and scholarship programs. The extent of public subsidies, the nature of the laws and regulations that determine who is eligible for financial aid, and the amount of funding provided for financial aid programs all greatly affect the affordability of postsecondary education for students from various income groups and, thus, their access to its benefits. Reflecting the benefits of postsecondary education and the policies and programs that increase accessibility, high school completers are enrolling at record rates, and substantial numbers of older adults are enrolling as well.4Although interest in postsecondary education is growing, rising tuition and fees have generated considerable public concern.5This raises a series of important questions: to whom is postsecondary education accessible and to what extent is accessibility related to income? How much does attending postsecondary education cost students? How affordable is postsecondary education? How are students and their families coping with the price of attendance? What impact do their financing strategies have on their educational experiences? Some of the statistical evidence available to address these questions from a national perspective is summarized here. This essay examines the extent to which the financial aid system promotes access to postsecondary education by equalizing income differences. It does not address the effects of other factors, such as low employment rates or a robust economy, on enrollment, nor does it examine the sensitivity of different income groups to price, the types of aid available, or differences in access by race/ethnicity. For information about trends of enrollment in higher education, see The Condition of Education 1998 (Wirt et al. 1998).
Increasingly, high school students are being advised to go to college, and growing numbers are taking that advice. However, not all high school completers have the same access. Some of the characteristics associated with higher rates of enrollment are related to income, suggesting that the price of attending is a barrier. However, certain attitudes and behaviors appear to be factors as well.
The proportions of high school sophomores whose teachers, counselors, and parents encouraged them to go to college increased dramatically between 1980 and 1990. High school sophomores in 1990 were twice as likely as their counterparts in 1980 to report that their teachers and guidance counselors recommended that they go to college (table 1). In 1990, more than half of even the lowest performing sophomores (those scoring in the lowest quartile on mathematics and reading tests) were advised to attend.
*Composite mathematics, reading, and vocabulary performance.
SOURCE: U.S. Department of Education, National Center for Education Statistics, America's High School Sophomores: A Ten Year Comparison, 1980-1990 (NCES 93-087), p. 47. Interest in postsecondary education among high school
completers is almost universal.
Nearly all 1992 high school completers (97 percent) reported that they planned to continue their education at some time, and 71 percent expected to earn a bachelor's degree. Even among completers whose families had low incomes (less than $25,000) or whose parents had no more than a high school education, the vast majority (94 percent in each case) planned to continue their education at some time. Sixty-five percent of the 1992 high school completers enrolled in some type of postsecondary education immediately after high school. By 1994, 75 percent of this same group had enrolled (Berkner and Chavez 1997).
Enrollment in college immediately after high school
has risen over the past 20 years.
The proportion of high school completers who enrolled in an institution of higher education (a 2- or 4-year college or university) immediately following high school increased from 49 to 65 percent between 1976 and 1996, with growth throughout the 20-year period (figure 1). Of the overall gain of 16 percentage points, about half of the increase (7 percentage points) was in 2-year institutions and about half (9 percentage points) was in 4-year institutions (Wirt et al. 1998, 46).
SOURCE: U.S. Department of Commerce, Bureau of the Census, Current Population Survey, October (various years).
While the enrollment rate in higher education has increased for high school completers in the aggregate, not all segments of this population participate at the same rate. Because issues of affordability are the focus in this essay, income differences are given the most attention. However, differential participation rates extend to other characteristics, and some of these are discussed as well.
Enrollment rates increase with family income.
In 1996, high school completers from low-income families were less likely to go to a 2- or 4-year college or university immediately after high school (49 percent) than were their peers from middle-income families (63 percent), who, in turn, were less likely to enroll than completers from high-income families (78 percent) (figure 2).
SOURCE: U.S. Department of Commerce, Bureau of the Census, Current
Population Survey, October (various years).
Students are much more likely to enroll in higher education immediately
after high school if their parents have at least a bachelor's degree than
if they have less education (Wirt
et al. 1998, 46). Enrollment rates of 1996 high school completers
immediately after high school ranged from 45 percent for those whose parents
had less than a high school education to 85 percent for those whose parents
had a bachelor's degree or higher (figure 3). These
data provide evidence of the intergenerational effects of postsecondary
education.
SOURCE: U.S. Department of Commerce, Bureau of the Census, Current
Population Survey, October (various years).
Among financially dependent undergraduates (that is, most students under
24 years old) who enrolled in postsecondary education for the first time
in 1995-96, students from families at all income levels were more likely
to enroll in public 4-year institutions than they were to enroll in private,
not-for-profit 4-year institutions (25 versus 15 percent) (Wirt
et al. 1998, 52). Students from families with incomes of $60,000 or
more were the most likely to enroll in private, not-for-profit 4-year
institutions (25 percent did so, compared to 16 percent of students from
families with incomes between $30,000 and $59,999 and 14 percent of students
from families with incomes less than $30,000) (figure 4).
Students from families with incomes of $60,000 or more were less likely
than other students to enroll in public 2-year institutions (34 percent
versus 47 percent of students from families with incomes between $30,000
and $59,999, and 43 percent of students from families with incomes less
than $30,000).
SOURCE: U.S. Department of Education, National Center for Education
Statistics, 1990 Beginning Postsecondary Students
Longitudinal Study, second follow-up (1994); and 1995-96
National Postsecondary Student Aid Study.
One reason that low-income high school graduates go to 4-year institutions
at lower rates than graduates from higher income families is that they
are less prepared academically. The likelihood of being prepared increased
with income: 53 percent of 1992 low-income graduates (less than $25,000),
68 percent of middle-income graduates ($25,000-74,999), and 86 percent
of high school graduates from high-income families ($75,000 or more) had
sufficient academic qualifications for admission to a 4-year college (table
2). In addition, among college-qualified 1992 high school graduates,
there was a positive relationship between income and each of the following
attitudes and behaviors that normally precede enrolling in a 4-year institution:
expecting to complete a bachelor's degree; planning to enroll at a 4-year
institution; taking steps toward admission (taking an entrance examination
and applying); and gaining admission.
SOURCE: U.S. Department of Education, National Center for Education
Statistics, National Education Longitudinal
Study of 1988, third follow-up (1994).
In 1992, even when low-income high school graduates not only had the
academic qualifications for admission to a 4-year college but also took
the necessary steps toward admission, they were less likely than high-income
graduates to enroll in a 4-year institution by 1994 (83 versus 92 percent)
(table 3). However, they were just as likely as middle-income
students to be accepted at a 4-year institution (94 versus 93 percent)
and to enroll (83 versus 82 percent).
SOURCE: U.S. Department of Education, National Center for Education
Statistics, National Education Longitudinal
Study of 1988, third follow-up (1994).
Among 1992 high school seniors in the highest achievement test quartile,
students whose families were also in the highest socioeconomic status
(SES) quartile were considerably more likely than those in the lowest
SES quartile to attend a 4-year college within 2 years of their scheduled
graduation (86 versus 58 percent) (table 4). In this
sense, the access of low-SES students to 4-year colleges is less than
the access of high-SES students. Among high school seniors in this same
highest achievement quartile but in the lowest SES quartile, the likelihood
of attending a 4-year college within 2 years of graduation increased from
48 percent in 1972 to 58 percent in 1992. Thus, the access of low-SES,
high-achieving students has increased since 1972 (Smith
1997, 64).
SOURCE: U.S. Department of Education, National Center for Education
Statistics, National Longitudinal Study
of the High School Class of 1972, first follow-up (1974); High
School and Beyond Study, Senior Cohort, third follow-up (1986);
and National Education Longitudinal Study
of 1988, second follow-up (1992) and third follow-up (1994).
The price of attending a postsecondary institution is of great concern
to most students and their families. The amounts they have to pay affect
students' initial access to postsecondary education and also their ability
to remain enrolled long enough to complete a degree or certificate. The
public is extremely anxious about rising prices, and many parents worry
that college will be beyond their children's reach (National Commission
on the Cost of Higher Education 1998). In reality, however, students have
a range of options with widely varying price tags.
Financially dependent undergraduates who attended a postsecondary institution
full time for the full year in 1995-96 paid average tuition and fees that
ranged from $1,300 if they attended a public 2-year institution, to $3,900
at a public 4-year institution, to $13,300 at a private, not-for-profit
4-year institution (table 5). Although the price to
students and their families (including living expenses as well as tuition
and fees) averaged $20,000 for those who attended a private, not-for-profit
4-year institution, the average total price was about half that ($10,800)
for those attending a public 4-year institution and even less ($6,800)
for those attending a public 2-year institution.
SOURCE: U.S. Department of Education, National Center for Education
Statistics, 1995-96 National Postsecondary Student
Aid Study.
SOURCE: U.S. Department of Education, National Center for Education
Statistics, 1995-96 National Postsecondary Student
Aid Study.
The price of attending a 2- or 4-year college or university, adjusted
for inflation, has risen substantially for both public and private institutions.
Between 1986-87 and 1996-97, the average student charges (in 1997 constant
dollars) for tuition, room, and board at higher education institutions
increased by 20 percent at public institutions and 31 per-cent at private
institutions (table 6).
SOURCE: U.S. Department of Education, National Center for Education
Statistics, Digest
of Education Statistics: 1997 (NCES 98-015), tables 38 and 312;
and U.S. Department of Commerce, Bureau of the Census, Current Population
Reports, Series P-60, "Income, Poverty, and Valuation of Non-Cash
Benefits" (various years).
Regardless of the price of postsecondary education, the important issue
for students and their families is whether they can afford to pay. The
record high enrollments in higher education (14.4 million in fall 1995)
(Snyder, Hoffman and Geddes
1997) show that today college is affordable to millions of students.
Since increasing access to postsecondary education is an important goal
at the national, state, and institutional levels, it is necessary to consider
its affordability to students at all income levels. This issue can be
examined from a number of perspectives, including growth in prices relative
to family income, the resources families need to manage college prices
on their own, and the extent to which financial aid reduces the price
of attending.
More important than the increase in inflation-adjusted prices is the
fact that average charges for tuition, room, and board at 2- and 4-year
colleges and universities have increased faster than family incomes, especially
at private institutions (figure 6).
SOURCE: U.S. Department of Education, National Center for Education
Statistics, Digest of
Education Statistics: 1997 (NCES 98-015); and U.S. Department
of Commerce, Bureau of the Census, Current Population Reports, Series
P-60, "Income, Poverty, and Valuation of Non-Cash Benefits"
(various years).
Postsecondary education would be beyond the reach of many families without
financial assistance. Financial aid eligibility rules specify an expected
family contribution (EFC) that is based on financial circumstances (mainly
family income and assets). This amount is a rough measure of what families
can afford on their own. Therefore, comparing the amounts families at
different income levels are expected to pay toward the price of attending
provides an indicator of the affordability of various types of institutions.
In 1995-96, for example, families with incomes of $50,000-59,999 had an
average EFC of $7,400, enough to cover the average price of attending
a public 2-year institution without financial aid. Families with incomes
of $70,000-79,999 had an average EFC of $12,300, enough to cover the price
of attending a public 4-year institution without aid. Families with incomes
of $100,000-124,000 had an average EFC of $20,100, about equal to the
average cost of attending a private, not-for-profit 4-year institution
(figure 7).
NOTE: The horizontal dotted lines on the figure represent the average
student budgets for full-time, full-year students at the indicated type
of institution.
SOURCE: U.S. Department of Education, National Center for Education
Statistics, 1995-96 National Postsecondary Student
Aid Study.
Half of all undergraduates received some type of financial aid from
federal, state, institutional, or other sources in 1995-96 (table
7). Thirty-nine percent received grants, and 26 percent took out loans.
Among financially dependent students, about two-thirds (66 percent) of
those from families with incomes less than $20,000 received grants, as
did 51 percent of those with incomes between $20,000 and $39,999. As family
income rises above $40,000, students are less likely to be eligible for
need-based grants and scholarships. When grants are not sufficient, students
qualifying for federal financial aid may take out low-interest, subsidized
loans through the Stafford loan program. Students ineligible for subsidized
loans because their incomes are too high can take out unsubsidized Stafford
loans if they are otherwise eligible. Some states and institutions have
their own loan programs, but most undergraduate borrowing is through the
Stafford loan program (Berkner
1998).
For undergraduates from families in the lowest income quartile, student
aid covered, on average, more than half the price of attending a 4-year
institution in 1995-96. It covered 54 percent at public institutions and
60 percent at private, not-for-profit institutions (table
8). Because of the criteria for awarding student aid, the percentage
of total price covered by aid at public 4-year institutions declined as
family income increased. The same was generally true at private, not-for-profit
4-year institutions, except that lower and lower-middle-income students
had similar amounts covered (60 and 58 percent). At public 2-year institutions,
aid covered an average of 38 percent of the total price for low-income
students and smaller proportions for students with higher incomes.
SOURCE: U.S. Department of Education, National Center for Education
Statistics, 1995-96 National Postsecondary Student
Aid Study.
NOTE: Total price includes tuition and fees, and an institutionally
determined allowance for student living expenses.
SOURCE: U.S. Department of Education, National Center for Education
Statistics, 1990 Beginning Postsecondary Students
Longitudinal Study, second follow-up (1994).
The net amount that students actually pay to attend college is the total
price charged by the institution minus any financial aid they are awarded.
This price includes tuition, fees, and a budgeted amount of living costs.
In 1995-96, the average net price of attending college (price minus aid
received) for a dependent, full-year undergraduate (including aided and
unaided students in the average) was $7,300 at a public 4-year institution;
$11,200 at a private, not-for-profit 4-year institution; and $5,700 at
a public 2-year institution (table 9). Because financial
aid reduces the net price for low-income students, it increases the affordability
of postsecondary education for them.
NOTE: Averages include zero values.
SOURCE: U.S. Department of Education, National Center for Education
Statistics, 1995-96 National Postsecondary Student
Aid Study.
The average unmet need (net price minus the EFC) for low-income full-time,
full-year dependent undergraduates attending public 4-year institutions
was about $3,800 (table 9). For those attending public
2-year institutions, the amount was similar ($3,200). Average unmet need
for their counterparts at private, not-for-profit 4-year institutions
was much higher ($6,200). These are the amounts above and beyond the EFC
that must be covered by students and their families by borrowing more,
working, reducing their living costs, or some other means.
In addition to the fact that lower income students have higher unmet
need than higher income students, lower income students have also been
found to be more sensitive to a given level of unmet need than high-income
students. That is, for a certain level of unmet need, low-income students
are more likely to be deterred from attending higher education than higher
income students are (Kane 1994). Generally, it has been found that for
each $150 increase in the net price of college attendance, the enrollments
of students in the lowest income group decrease by about 1.8 percent (McPherson
and Shapiro 1998).
Students pay for their postsecondary education with a combination of
savings, help from families and friends, financial aid, and work. Their
use of work and borrowing are of particular interest because working may
affect their academic opportunities and performance while enrolled, and
borrowing may result in a substantial debt burden after they graduate.
A large majority of undergraduates (79 percent, including both dependent
and independent students) worked while enrolled during the 1995-96 academic
year (figure 8). Among students who considered themselves
primarily students working to pay their education expenses (50 percent
of all students), the average number of hours worked per week was 25.
Among students who considered themselves primarily employees taking classes
(29 percent of all students), the average was 39 hours.
SOURCE: U.S. Department of Education, National Center for Education
Statistics, 1995-96 National Postsecondary Student
Aid Study.
In 1995-96, among undergraduates who considered themselves primarily
students working to pay school expenses, the more they worked the more
likely they were to report that their working limited their class schedule,
reduced their choice of classes, and limited the number of classes they
could take (table 10). Among those who worked full
time while enrolled (35 or more hours per week), at least half reported
each of these effects. In addition, 55 percent of dependent undergraduates
who considered themselves primarily students and who worked full time
reported that working negatively affected their grades.
SOURCE: U.S. Department of Education, National Center for Education
Statistics, 1995-96 National Postsecondary Student
Aid Study.
Since unsubsidized Stafford loans were introduced in 1993-94, many students
whose family income was too high to qualify for a subsidized loan have
taken advantage of this opportunity to borrow to finance their education.
In 1992-93, the last year before the eligibility rules changed, 41 percent
of all seniors enrolled at public 4-year institutions had ever borrowed
through a federal loan program; in 1995-96, 52 percent had done so (table
11). At private, not-for-profit 4-year institutions, the percentage
of seniors who had ever borrowed increased from 49 to 56 percent.
SOURCE: U.S. Department of Education, National Center for Education
Statistics, 1992-93 and 1995-96 National Postsecondary
Student Aid Study.
Among dependent undergraduates at both public and private, not-for-profit
4-year institutions, the increase in borrowing was concentrated among
students from families with incomes greater than about $30,000 (figure
9). Although some have linked the increased borrowing to rising tuitions,6there is no way to verify whether the increased borrowing represents
more investment in postsecondary education or if middle and upper income
families have simply shifted from using savings or work to borrowing.
Overall, 52 percent of the seniors at public 4-year colleges in 1995-96
had ever borrowed from federal loan programs, and they carried an average
of $11,000 in debt. For seniors at private, not-for-profit 4-year colleges,
about 56 percent had ever borrowed and their average debt was $13,200
(Wirt et al., 62).
SOURCE: U.S. Department of Education, National Center for Education
Statistics, 1992-93 and 1995-96 National Postsecondary
Student Aid Study.
Students from higher income families do not appear to have used the
increased borrowing opportunities to shift from public institutions to
private, not-for-profit 4-year institutions. The percentage of dependent
beginning postsecondary students from families with incomes of $60,000
or more attending private, not-for-profit institutions was about the same
in 1989-90 (24 percent) and 1995-96 (25 percent) (Wirt et al. forthcoming,
table 10-1).
An analysis of persistence and attainment by 1989-90 beginning postsecondary
students that controlled for a variety of factors showed that working
1-14 hours per week while enrolled was positively associated with persistence
and attainment 5 years later, but that working full time was negatively
associated with it. Borrowing was positively associated with persistence
and attainment as well (Cuccaro-Alamin
and Choy 1998 ). Students who borrowed were more likely
than those who did not borrow to persist or attain within 5 years at each
level of work considered except 1-14 hours (figure 10).
SOURCE: U.S. Department of Education, National Center for Education
Statistics, 1990 Beginning Postsecondary Students
Longitudinal Study, second follow-up (1994).
The students who considered themselves primarily students and worked
15 hours or fewer were also more likely to borrow and to borrow larger
amounts, suggesting that students may substitute working for borrowing
(Horn and Berktold 1998).
Enrollment in postsecondary education continues to rise, with increasing
proportions of high school graduates going directly to college, and almost
all expecting to enroll at some time in their lives. Low-income high school
graduates are less likely to attend postsecondary education than their
higher income peers. One reason is that they tend to be less well prepared,
but even among the highest achieving high school students, low-income
students are less likely to enroll, suggesting that finances may be a
barrier for some. However, aspirations and expectations are important
factors. When college-qualified low-income students take the necessary
steps toward admission to a 4-year institution, they are just as likely
as middle-income students to be accepted and to enroll.
College prices are rising faster than median family income. However,
about half of all full-time, full-year undergraduates at 4-year institutions
face tuition and fees of less than $4,000 per year, largely because of
the subsidies that are provided to public institutions. Although financial
aid reduces net prices for low-income students, substantial unmet need
remains.
Students and their families cope with the price of attending college
using savings, income, borrowing, and work. While some work experience
while enrolled may complement students' academic experiences and improve
their employment prospects after graduation, full-time work appears to
have some negative consequences. In addition, there is some evidence that
borrowing to reduce the number of hours a student needs to work to no
more than 15 hours per week may increase a student's chance of completing
a degree.
2 For a review
of the evidence, see Mumper (1996).
3 See, for example,
Reich (1991).
4 In fall 1995,
37 percent of all undergraduates in institutions of higher education
were 25 years or older (Snyder,
Hoffman, and Geddes 1997).
5 A national commission
was established to study this problem and recently released its final
report, Straight Talk on the Cost of Higher Education (National Commission
on the Cost of Higher Education 1998).
6 See, for example,
General Accounting Office (1998).
Berkner, L. (1998).
Student Financing of Undergraduate Education: 1995-96 (NCES 98-076).
U.S. Department of Education. Washington, DC: U.S. Government Printing
Office.
Berkner, L., and Chavez, L. (1997).
Access to Postsecondary Education for the 1992 High School Graduates
(NCES 98-105). U.S. Department of Education. Washington, DC: U.S.
Government Printing Office.
Cuccaro-Alamin, S., and Choy, S. (1998).
Postsecondary Financing Strategies: How Undergraduates Combine Work,
Borrowing, and Attendance (NCES 98-088). U.S. Department of
Education. Washington, DC: U.S. Government Printing Office.
General Accounting Office. (1998). Higher Education: Students Have
Increased Borrowing and Working to Help Pay Higher Tuitions. Washington,
DC: U.S. Government Printing Office.
Horn, L., and Berktold, J. (1998).
Profile of Undergraduates in U.S. Postsecondary Institutions: 1995-96
(NCES 98-084). U.S. Department of Education. Washington, DC: U.S.
Government Printing Office.
Kane, T. (1994). College Entry by Blacks Since 1970: The Role of College
Costs, Family Background, and the Returns to Education. Journal of
Political Economy 105(5).
McPherson, M., and Shapiro, M. (1998). The Student Aid Game: Meeting
Need and Rewarding Talent in American Higher Education. Princeton,
NJ: Princeton University Press.
Mumper, M. (1996). Removing College Price Barriers. Albany,
NY: State University of New York Press.
National Commission on the Cost of Higher Education. (1998). Straight
Talk on the Cost of Higher Education. Washington, DC: Author.
Pascarella, E., and Terenzini, P. (1991). How College Affects Students.
San Francisco: Jossey-Bass.
Reich, R. (1991). The Work of Nations. New York: Knopf.
Smith, T.M. (1997).
The Condition of Education 1997 (NCES 97-388). U.S. Department
of Education. Washington, DC: U.S. Government Printing Office.
Snyder, T.D., Hoffman, C.M., and Geddes, C.M. (1997).
Digest of Education Statistics 1997 (NCES 98-015). U.S. Department
of Education. Washington, DC: U.S. Government Printing Office.
Wirt, J., Snyder, T., Sable, J., Choy, S.P., Bae, Y., Stennett, J.,
Gruner, A., and Perie, M. (1998).
The Condition of Education 1998 (NCES 98-013). U.S. Department
of Education.
Washington, DC: U.S. Government Printing Office.
Wirt, J., Snyder, T., Sable, J., Choy, S.P., Bae, Y., Stennett, J.,
Gruner, A., and Perie, M. (forthcoming). The Condition of Education
1998, Volume 2 (NCES 1999-025). U.S. Department of Education. Washington,
DC: U.S. Government Printing Office.
Bureau of the Census: Current Population Survey, October (various
years); and Current Population Reports, Series P-60, "Income,
Poverty, and Valuation of Non-Cash Benefits" (various years).
For technical information, see For complete supplemental and standard error tables, see either
Author affiliations: J. Wirt and T. Snyder,
NCES; J. Sable, Y. Bae, and J. Stennett, Pinkerton Computer
Consultants, Inc.; S.P. Choy, MPR Associates, Inc.; and A. Gruner
and M. Perie, American Institutes for Research.
For questions about content, contact John Wirt
(john.wirt@ed.gov).
To obtain this publication (NCES
1999-108), call the toll-free ED Pubs number (877-433-7827)
or visit the NCES Web Site (http://nces.ed.gov).
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