How College Affordability Has Changed for Different Families. Upjohn Institute Policy and Research Brief
Saved in:
| Title: | How College Affordability Has Changed for Different Families. Upjohn Institute Policy and Research Brief |
|---|---|
| Language: | English |
| Authors: | Peter Hinrichs (ORCID |
| Source: | W. E. Upjohn Institute for Employment Research. 2025. |
| Availability: | W. E. Upjohn Institute for Employment Research. 300 South Westnedge Avenue, Kalamazoo, MI 49007-4686. Tel: 888-227-8569; Tel: 269-343-4330; Fax: 269-343-7310; Web site: http://research.upjohn.org/upjohn_publications/ |
| Peer Reviewed: | N |
| Page Count: | 6 |
| Publication Date: | 2025 |
| Document Type: | Reports - Research |
| Education Level: | Higher Education Postsecondary Education High Schools Secondary Education |
| Descriptors: | Paying for College, Educational Finance, Parent Financial Contribution, College Students, College Bound Students, Student Financial Aid, Need Analysis (Student Financial Aid), Higher Education, Financial Aid Applicants, Race, Socioeconomic Status, Ability, Student Loan Programs, Income |
| Assessment and Survey Identifiers: | National Postsecondary Student Aid Study (NCES), Panel Study of Income Dynamics |
| DOI: | 10.17848/pb2025-84 |
| Abstract: | College is a worthwhile investment for many people. Research shows that attending college is associated with a variety of benefits, including higher earnings, a lower chance of being unemployed, greater job satisfaction, and better health (Oreopoulos and Salvanes 2011). However, these benefits come at a cost. As many current and prospective college students and their families are well aware, attending college can be quite expensive. Even though many people may benefit from attending college, there is the question of who can actually afford it (Levine 2022). One measure of affordability comes from the Free Application for Federal Student Aid (FAFSA), which many institutions use to make offers of financial aid to prospective students. Families provide information on income, wealth, and family structure, and a formula estimates how much the family can afford to pay toward college. This estimate, traditionally called the Expected Family Contribution (EFC), has recently been renamed the Student Aid Index (SAI). A perhaps simpler measure of affordability is the share of income a family pays for college. For this report, the author uses data on students and their families to examine trends in the EFC, the share of income families pay for college, and other measures of college affordability, focusing on how these trends vary across groups defined by income, parental education, and race or ethnicity. The author also examines how potential alternatives to the EFC formula would affect affordability measures across groups. The author finds that the EFC (in dollar terms) is highest and has risen fastest in recent years for families in the top quarter of the college-going income distribution. As wealth and income have risen for the top income quartile, EFCs have risen in tandem. By contrast, the author finds that the share of income families pay for college (in percentage terms) is highest for families in the bottom quarter of the distribution. Families in the lowest income quartile on average contribute approximately two-thirds of their family income per student per year for college, paying with a combination of cash and loans. Moreover, proposed changes to the EFC formula intended to reduce perceived inequity would not necessarily have the intended effect. |
| Abstractor: | As Provided |
| Entry Date: | 2025 |
| Accession Number: | ED675560 |
| Database: | ERIC |
Be the first to leave a comment!
