Parents who Won't Pay: Expected Parental Contributions and Postsecondary Schooling

Abstract

Evidence from the High School and Beyond (HS&B) Surveys indicates that many parents of first-year college students do not make their Expected Parental Contribution (EPC) toward their child's postsecondary education. This is a concern because children with under-contributing parents may experience lower schooling outcomes than those with parents who make their expected contributions. This paper investigates the effects of changing the EPC on several schooling outcomes as well as the effects on scholarships and grants and parental transfers. the results indicate that changing the EPC does not affect the decision to enroll in postsecondary school or the amount of schooling expenditures, although it does affect whether or not a non-vocational student enrolls in a four-year program. the results also indicate that increasing the EPC negatively affects the amount of scholarships and grants received by a student while positively affecting parental transfers, suggesting a tradeoff between external and parental funds in the financing of a child's postsecondary education.