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How Much Can Families Afford to Pay for College? Upjohn Institute Working Paper 25-416

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Title: How Much Can Families Afford to Pay for College? Upjohn Institute Working Paper 25-416
Language: English
Authors: Peter Hinrichs (ORCID 0000-0002-4375-035X), W.E. Upjohn Institute for Employment Research
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: 40
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, Student Financial Aid, Need Analysis (Student Financial Aid), College Bound Students, Higher Education, Financial Aid Applicants, Race, Socioeconomic Status, Ability, Student Loan Programs
Assessment and Survey Identifiers: National Postsecondary Student Aid Study (NCES), Panel Study of Income Dynamics
DOI: 10.17848/wp25-416
Abstract: This paper studies families' capacity to pay for college in the United States, focusing on changes over time and differences by race and socioeconomic status. I use data from the National Postsecondary Student Aid Study (NPSAS) to document changes over time in the Expected Family Contribution (EFC) from the Free Application for Federal Student Aid (FAFSA). The results suggest that the EFC has been rising over time, and that this has been driven primarily by families in the upper quartile of the income distribution. I then use data from the Panel Study of Income Dynamics (PSID) to calculate alternative measures of the ability to pay for college. I find that it is possible to alter the distribution of who pays what amount by changing details of the EFC calculation, but the extent of this depends on details of the implementation.
Abstractor: As Provided
Entry Date: 2025
Accession Number: ED675559
Database: ERIC
FullText Text:
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  Data: How Much Can Families Afford to Pay for College? Upjohn Institute Working Paper 25-416
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  Data: <searchLink fieldCode="AR" term="%22Peter+Hinrichs%22">Peter Hinrichs</searchLink> (ORCID <externalLink term="https://orcid.org/0000-0002-4375-035X">0000-0002-4375-035X</externalLink>)<br /><searchLink fieldCode="AR" term="%22W%2EE%2E+Upjohn+Institute+for+Employment+Research%22">W.E. Upjohn Institute for Employment Research</searchLink>
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  Data: 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/
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  Data: This paper studies families' capacity to pay for college in the United States, focusing on changes over time and differences by race and socioeconomic status. I use data from the National Postsecondary Student Aid Study (NPSAS) to document changes over time in the Expected Family Contribution (EFC) from the Free Application for Federal Student Aid (FAFSA). The results suggest that the EFC has been rising over time, and that this has been driven primarily by families in the upper quartile of the income distribution. I then use data from the Panel Study of Income Dynamics (PSID) to calculate alternative measures of the ability to pay for college. I find that it is possible to alter the distribution of who pays what amount by changing details of the EFC calculation, but the extent of this depends on details of the implementation.
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        Value: 10.17848/wp25-416
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      – Text: English
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        PageCount: 40
    Subjects:
      – SubjectFull: Paying for College
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      – SubjectFull: Educational Finance
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      – SubjectFull: Parent Financial Contribution
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      – SubjectFull: College Students
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      – SubjectFull: Student Financial Aid
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      – SubjectFull: Need Analysis (Student Financial Aid)
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      – SubjectFull: College Bound Students
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      – SubjectFull: Higher Education
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      – SubjectFull: Financial Aid Applicants
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      – SubjectFull: Race
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      – SubjectFull: Socioeconomic Status
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      – SubjectFull: Ability
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      – SubjectFull: Student Loan Programs
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      – SubjectFull: National Postsecondary Student Aid Study (NCES)
        Type: general
      – SubjectFull: Panel Study of Income Dynamics
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