ERIC Number: ED319285
Record Type: RIE
Publication Date: 1990-Feb
Reference Count: N/A
The Impact of Increased Loan Utilization among Low Family Income Students.
Mortenson, Thomas G.
This study used economic investment theory and attitudinal survey data to examine the relationship between the decline in low-income participation in higher education and the substitution of loans for grants in federal student financial aid programs. Loans are seen to substantially decrease the net benefits of college attendance to low-income students because of these students' greater risk of academic failure and the addition of fees and interest charges to existing cost barriers. Survey data found that far fewer persons from family incomes of less than $20,000 felt the lifetime return on a college education was greater than its cost. Additionally, low family income is related to less willingness to assume debt for educational or other expenses and to reluctance to take financial risks for investment purposes. Examination of behavioral data revealed that college enrollment rates of students from poor family backgrounds increased when net college attendance costs were decreased due to availability of grants, that students from poorer backgrounds were likely to select less expensive higher education options, and that the poorest students incurred the greatest growth in indebtedness. It is concluded that only grants achieve desired enrollment gains by low-income students. Appendixes detail the data. Contains 17 references. Twenty-eight figures are included and 5 tables are appended. (DB)
Descriptors: Educational Economics, Enrollment Trends, Grants, High Risk Students, Higher Education, Investment, Low Income Groups, Student Attitudes, Student Financial Aid, Student Loan Programs
ACT Publications, P.O. Box 168, Iowa City, IA 52243.
Publication Type: Reports - Research; Numerical/Quantitative Data
Education Level: N/A
Audience: Policymakers; Administrators; Practitioners
Authoring Institution: American Coll. Testing Program, Iowa City, IA.