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Parents Who Won’t Pay: Expected Parental Contributions and Postsecondary Schooling

PFM, Vol. 5 No. 1, (2005)

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 nonvocational
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.

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