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How Low Income Undergraduates Financed Postsecondary Education:1992-93

Summary and Conclusion

Twenty percent of all undergraduates have family incomes below 125 percent of the poverty threshold established by the federal government for their family size. The average budget for a full-time, full-year low income undergraduate in 1992-93 was $10,900. However, according to the methodologies for calculating financial need, the expected average EFC for low income students was only $1,600, leaving a large gap between educational costs and what low income families were expected to pay.

To help provide low income students with the opportunity to enroll in postsecondary education, the federal and state governments, the institutions in which students enroll, and other organizations supply a substantial amount of financial aid to help low income students pay for their postsecondary education. In 1992-93, 88 percent of all low income undergraduates who attended full time, full year received some form of aid (grants, loans, or work study), averaging a total of $5,800 for those receiving aid. Financial aid covered an average of 42 percent of their total costs. For aided students, 65 percent of the aid was in the form of grants, on average, and 26 percent was in the form of loans.

Despite this financial aid, full-time, full-year low income students, on average, were left with costs that exceeded their EFC. The average net cost for these students (the amount the student and his or her family had to pay after subtracting total financial aid from student-reported costs) was $7,600 (considerably higher than the average EFC of $1,600).

Exactly how students cover these costs is unknown. However, the NPSAS data provide some information on parent contributions and work, two major sources of support. While low income students attending full time, full year were less likely than those who were not low income to receive parental contributions (37 percent compared with 68 percent), those who did receive money from their parents received an average of $2,900. Full-time, full-year students worked an average of 22 hours per week while enrolled, whether or not they were low income. Those with low incomes who worked earned an average of $4,200 during the 1992-93 academic year (including the summer).

According to these data, parental support and work do not appear to have been sufficient to cover low income students net costs, on average, yet they still somehow managed to attend. How? One possibility is that students overestimated their costs. It is very difficult for most people to remember exactly what they have spent on living expenses during any given year, especially if they are not living on campus and receiving room and board bills. Another possibility is that students actually earned more than they reported. Many students pick up extra cash through shortterm jobs (sometimes lasting only a day), and this income may not have been included. They may also have underestimated the amount of money they received from their parents or they may have received substantial in-kind contributions from their parents or others.

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