By: Nicholas Brock
A new report
published by ACT examines the financial burdens placed on families in funding their children’s college education, particularly after the economic downturn. Despite the availability of federal student loans used to help lessen this burden, families whose adjusted gross annual income is at least $23,000 are expected to contribute to their dependent students’ education, per the federal government’s expected family contribution (EFC) formula. Because of this, family contribution has become a critical part of the college affordability equation, despite the fact that family income is declining.
Among the report’s other findings:
- For the 2011–2012 school year, parents contributed approximately 37% of the total cost of college attendance: 28% from parent income and savings and 9% from parent loans.
- Since 2006, average family income declined by approximately 12%.
- The average family income for African American and Hispanic families is almost half that of White and Asian families.
- The net price for a four-year postsecondary institution increased from $10,270 in 2006–07 to $12,110 in 2012–13 (an 18% increase).
- The net price constituted about 15% of family income in 2006–07 as compared with 19% in 2012–13.
- Despite declining resources and family income for minority students, college enrollment continued to rise during the recession among these groups..
- Hispanic and African American students experienced the greatest increase in enrollment between 2006 and 2011 (7.2 and 4.5 percentage points, respectively).
While more work is needed to eliminate the gap in college enrollment between disadvantaged minorities and white students, increased information and access to financial aid has been somewhat successful in moderating the impact of the economic downturn.