NATIONAL CENTER FOR EDUCATION STATISTICS

Statistical Analysis Report August 2001

Postsecondary Education Descriptive Analysis Reports

Middle Income

Undergraduates:

Where They Enroll and How

They Pay for Their Education

Jennifer B. Presley

Suzanne B. Clery

JBL Associates, Inc.

C. Dennis Carroll, Project Officer

National Center for Education Statistics

U.S. Department of Education

Office of Educational Research and Improvement NCES 2001-155

U.S. Department of Education

Rod R. Paige

Secretary

National Center for Education Statistics

Gary W. Phillips

Acting Commissioner

The National Center for Education Statistics (NCES) is the primary federal entity for collecting, analyzing, and reporting data related to education in the United States and other nations. It fulfills a congressional mandate to collect, collate, analyze and report full and complete statistics on the condition of education in the United States; conduct and publish reports and specialized analyses of the meaning and significance of such statistics; assist state

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August 2001

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Suggested Citation

U.S. Department of Education, National Center for Education Statistics. Middle Income Undergraduates: Where

They Enroll and How They Pay for Their Education. NCES 2001-155, by Jennifer B. Presley and Suzanne B.

Clery. Project Officer, C. Dennis Carroll. Washington, DC: 2001.

For ordering information on this report, write:

U.S. Department of Education

ED Pubs

P.O. Box 1398

Jessup, MD 20794-1398

or call toll free 1-877-4ED-Pubs.

Content Contact:

Aurora D’Amico

(202) 502-7334

iii

EXECUTIVE SUMMARY

The need for financial aid or other financial help, such as tuition tax credits, to assist

students from middle income families to attend the college of their choice has received

increased attention recently. This report provides a profile of middle income undergraduates in comparison to their lower income and

higher income counterparts and examines

where middle income students enroll by price

of attendance and how they and their families

pay for college, including the role of financial

aid.

The source of data for this analysis was

the 1995–96 National Postsecondary Student

Aid Study (NPSAS:96). The report is limited

to full-time, full-year (FTFY) dependent undergraduates who were enrolled during 1995–

96.

In this report, middle income undergraduates are defined as those with family incomes

between $35,000 and $69,999 in 1994, the

year of the income data included in the

NPSAS:96 database. Undergraduates from

families with incomes below $35,000 are defined as lower income, and those from families with incomes of $70,000 or more are defined as higher income. Thirty-seven percent

of FTFY dependent undergraduates in the

sample were middle income according to this

definition, 35 percent were lower income and

28 percent were higher income.

Because the financing strategies that students use to pay for college vary by price of

attendance, results are provided for four priceof-attendance levels: lowest price of attendance (less than $6,000), moderate price of

attendance ($6,000 to $8,499), upper price of

attendance ($8,500 to $15,999) and highest

price of attendance ($16,000 or more). The

price of attendance is the FTFY dependent

undergraduate budget, which represents the

total expected expenses for a FTFY dependent

undergraduate to attend college in 1995–96,

including tuition, fees, and nontuition expenses.

PROFILE OF MIDDLE INCOME FULL-TIME,

FULL-YEAR DEPENDENT UNDERGRADUATES

Middle income FTFY dependent undergraduates in 1995–96 were 53 percent female,

81 percent white, non-Hispanic, and nearly all

came from families with at least three family

members. About one-third were first generation college students (i.e., their parents had no

more than high school degrees as their highest

level of education completed), one-quarter had

parents with bachelor’s degrees, 16 percent

had parents with master’s degrees, and 5 per-
EXECUTIVE SUMMARY

iv

cent had parents with doctoral or firstprofessional degrees. Thirty-seven percent of

middle income FTFY dependent undergraduates lived on campus, while 35 percent lived

with their parents or relatives. Forty-five percent were first-year/freshmen.

PRICE OF ATTENDANCE

Price of attendance is the student budget

for FTFY dependent undergraduates for 1995–

96, including tuition and fees and total nontuition costs. Of the middle income FTFY

dependent undergraduates, 8 percent were enrolled at the lowest price-of-attendance level,

21 percent at the moderate price-ofattendance level, 49 percent at the upper

price-of-attendance level, and 23 percent at

the highest price-of-attendance level (figure

A).

The percentages of FTFY dependent undergraduates from lower income and middle

income families enrolling at each price-ofattendance level were about the same, but a

smaller percentage of each of these two income groups (20 and 23 percent) was enrolled

at the highest price-of-attendance level than of

the higher income group (34 percent). Middle

income FTFY dependent undergraduates with

mid-range combined SAT scores of 825-1,199

were less likely to be enrolled at the highest

price-of-attendance level than were those with

similar SAT scores in the higher income

group. Again, the enrollment of middle income and lower income FTFY dependent undergraduates by price-of-attendance level was

about the same within the same SAT range.

In all three income groups, the percentages of

those with SAT scores of 1,200 or more that

were enrolled at the highest price-ofattendance level were not statistically different, standing at 54 percent overall.

Figure A.—Percentage distribution of full-time, fullyear dependent undergraduates from

middle income families, by price-ofattendance level: 1995-96

NOTE: Percentages may not sum to 100 due to rounding.

Dependent undergraduates are limited to those who attended

only one institution and were U.S. citizens or permanent residents.

SOURCE: U.S. Department of Education, National Center for

Education Statistics, 1995-96 National Postsecondary Student

Aid Study (NPSAS:96), Undergraduate Data Analysis System.

Multivariate analysis showed that even

after controlling for student background and

family factors likely to affect enrollment at the

highest price-of-attendance level, the percentage enrolled at this level was still lower for

middle income FTFY dependent undergraduates (23 percent) than their higher income

counterparts (30 percent). Factors associated

































Upper level

49%

Moderate level

21%

Lowest level

Highest level 8%

23%
EXECUTIVE SUMMARY

v

with enrollment at the highest price-ofattendance level, in addition to family income,

included being female, having parents whose

highest level of education was a doctoral or

first-professional degree, and having combined SAT scores of 1,200 or more.

FINANCIAL NEED AND FINANCIAL AID

Financial need is defined as student budget

minus expected family contribution (EFC).

EFC is the amount that the family and the student are expected to contribute toward the

price of attendance, based on formulas for calculating financial aid awards.1

 Virtually all

families in the middle income group are expected to pay part of the price of attendance

from their own resources. The amount that

remains after subtracting EFC is the student’s

financial need. It is possible that even after all

aid is awarded, some students will have unmet

need.

In 1995–96, four out of five middle income FTFY dependent undergraduates (79

percent) had some financial need, compared

with almost all of those in the lower income

category (99 percent), and one-third of those

 

1

Expected family contribution (EFC) is based on dependency, family size, income, assets and number in

college. In order to calculate how much federal financial aid students can receive, federal regulations provide

a methodology that assesses how much the family and

the student should contribute towards the price of attendance. See Chapter 7 of the 1999-2000 Student Financial Aid Handbook, U.S. Department of Education, for

more information.

in the higher income category (table A). Middle income FTFY dependent undergraduates

with financial need had an average of $7,785

of financial need.

Sixty-five percent of middle income FTFY

dependent undergraduates received financial

aid, 55 percent having financial need and 10

percent not having financial need. Overall,

middle income FTFY dependent undergraduates had 31 percent of their price of attendance

covered by financial aid, and more than onehalf (58 percent) had unmet need after financial aid and expected family contribution

(EFC).

One-third of middle income FTFY dependent undergraduates with unmet need had

not applied for financial aid. Reasons given

included a belief that family income was too

high (32 percent) or that the family could afford to pay (48 percent). But for those who

did apply for aid, but did not have their financial need met, it could mean that they and

their families were making greater financial

effort to attend their institution of choice.

Net price, or the difference between price

of attendance and total financial aid received,

is the amount of out-of-pocket expenses that

students and their families must come up with

to attend the colleges in which they enroll. By

examining student earnings and the percentage
EXECUTIVE SUMMARY

vi

Table A.—Financial status for all full-time, full-year dependent undergraduates, by family income: 1995-96

 Expected Ratio of Unmet

 Price of family expected Amount of need5

 attendance contribution family Percent financial Net Percent for those

at institution (EFC) at any contribution with need3

 for price4 with with

where postsecondary to price of financial those with Grant Total for unmet unmet

enrolled institution1,2 attendance2

 need need aid2 loan2 all2 need5 need

 Total $12,663 $8,697 77 72.6 $8,921 $2,230 $2,014 $8,113 57.6 $4,797

Family income

 Lower income 11,715 1,617 16 98.5 10,372 3,560 2,158 5,628 86.9 4,914

 Middle income 12,284 6,865 68 78.6 7,785 1,873 2,229 7,867 58.3 4,375

 Higher income 14,316 19,729 162 33.1 7,198 1,078 1,557 11,462 20.9 5,745

1

Expected Family Contribution (EFC) may exceed actual student budget; therefore, the average EFC reported in this table cannot

be used to calculate financial need and unmet need reported in this table. 2

Includes zero values.

3

Student budget minus EFC.

4

Student budget minus all aid.

5

Student budget minus EFC minus aid.

NOTE: Dependent undergraduates are limited to those who attended only one institution and were U.S. citizens or permanent

residents.

SOURCE: U.S. Department of Education, National Center for Education Statistics, 1995-96 National Postsecondary Student Aid Study

(NPSAS:96), Undergraduate Data Analysis System.

of students with parents contributing to their

college expenses, we can gain an additional

perspective on how students and their families

cover college expenses.

The average net price for middle income

FTFY dependent undergraduates in 1995–96

was $7,867. Net price increased as price-ofattendance level increased, but average student earnings were lowest at the highest priceof-attendance level.

At the lowest price-of-attendance level,

student earnings for middle income FTFY dependent undergraduates averaged $4,478, the

average net price of attendance was

$4,581,2 and 84 percent of these students reported that their parents contributed to their

college expenses.3 At the moderate price-ofattendance level, average student earnings for

middle income FTFY dependent undergraduates of $3,737 covered a considerable amount

of the $5,668 net price of attendance, while 88

percent of these students reported that their

parents contributed to their college expenses.

The amounts of parental contributions toward

the net price of attendance are not known, but

 

2

Students are not expected to contribute all of their

earnings for the expected family contribution (EFC) or

price of attendance. The actual amount contributed

from earnings is not known, and some may contribute

more or less than calculated for their EFC.

3

For students and their families in the middle income

group, virtually all are expected to make some contribution from their own resources toward paying for college.
EXECUTIVE SUMMARY

vii

the data suggest that middle income FTFY

dependent undergraduates who were enrolled

at the lowest and moderate price-ofattendance levels could meet or exceed the net

prices of attendance with their own earnings

and a modest contribution from their parents.

Perhaps these students attended at the lowest

and moderate price-of-attendance levels in

order to reduce (but not eliminate) the amount

of EFC that their parents needed to contribute,

or to increase their available discretionary income, or both.

With a sizable gap between average net

price ($7,632) and average student earnings

($3,419) for the 49 percent of middle income

FTFY dependent undergraduates enrolled at

the upper price-of-attendance level, 91 percent reported that their parents contributed

toward expenses. EFC for middle income

FTFY dependent undergraduates enrolled at

this price-of-attendance level was $6,913.

Thus, it appears that FTFY undergraduates

attending at the upper price-of-attendance

level can, on average, meet the net price of

attendance through student earnings and parental contributions below EFC.

For the 23 percent of middle income

FTFY dependent undergraduates enrolled at

the highest price-of-attendance level, the gap

between net price and student earnings was

$8,919, which is more than the average EFC

of $7,024 for these undergraduates’ families.

In addition, student earnings for middle income FTFY dependent undergraduates at the

highest price-of-attendance level were lower

than earnings for those at other price-ofattendance levels. At the highest price-ofattendance level, 96 percent of parents were

reported to contribute to the price of attendance. Again, we do not know the actual

amounts contributed by parents, but these data

suggest that parents may have contributed

amounts that exceeded their EFC by several

thousand dollars. This gap between net price,

student earnings, and EFC may explain why a

smaller percentage of middle income FTFY

dependent undergraduates with mid-range

SAT scores were enrolled at the highest priceof-attendance level in comparison to those in

the higher income group, with more financial

resources to meet out-of-pocket expenses.

Perhaps middle income parents, on average,

made additional financial effort to pay for

their dependents who were among the best

scholastically, but did not make additional financial effort for those who were mid-range

students scholastically. Another reason may

be that institutions in the highest price-ofattendance level may not practice need-blind

admissions, but balance applicants’ academic

strengths with their financial aid needs, resulting in fewer enrollees with mid-range

scores who have higher financial need.

SOURCES OF FINANCIAL AID

In 1995–96, one-half of middle income

FTFY dependent undergraduates with financial need received loans, accounting for 42

percent of their aid, while 52 percent received
EXECUTIVE SUMMARY

viii

grants, accounting for 44 percent of their aid,

with work-study and other types of aid providing the remaining aid.

Institutional grants constituted the most

common source of grant aid for middle income FTFY dependent undergraduates with

financial need, as well as those in the higher

income group. The percentages of FTFY dependent undergraduates with need who received institutional grants, as well as the average institutional awards that they received,

were about the same for each family-income

level. In each income category, larger percentages of FTFY dependent undergraduates

with need received institutional grants if they

were enrolled at the highest price-ofattendance level. At the highest price-ofattendance level, about two-thirds of those

with need in the lower and middle income

groups received institutional grants, compared

with 46 percent of those in the higher income

group. In addition, the average award was

smaller for those in the higher income group.

Institutional grants constituted an important

component of financial aid packages that assisted in providing access at the highest priceof-attendance level, especially for lower and

middle income undergraduates.

Overall, middle income FTFY dependent

undergraduates with financial need were about

as likely to borrow as their lower income

counterparts, and the amounts they borrowed

were about the same, but they were more

likely to borrow than were their higher income

counterparts. The percentage of middle income FTFY dependent undergraduates with

need who borrowed was larger at each priceof-attendance level. For those with no financial need, the percentage borrowing was larger

than the percentage borrowing from the higher

income group.

SUMMARY

Lower income and middle income FTFY

dependent undergraduates have similar price

of attendance enrollment patterns. Those from

the lower income and middle income group

use more financial aid than do those in the

higher income group. Lower income and

middle income FTFY dependent students do

not enroll at similar price-of-attendance levels

as their counterparts in the higher income

group, with the exception of those undergraduates with SAT scores of 1,200 or more.
ix

FOREWORD

This report examines the characteristics of dependent middle income undergraduates who

attended college full-time, full-year, and how they paid for their education. This report also

compares these undergraduates with their lower and higher income counterparts. It examines

strategies that these middle income undergraduates might have used to meet the gap between financial aid and financial need (unmet need). The report also looks at how they filled the gap

between price of attendance and the amount of financial aid they received (out-of-pocket costs).

Data are shown separately for those with financial need and no financial need, and by price of

attendance.

The report uses data from the 1995–96 National Postsecondary Student Aid Study

(NPSAS:96). NPSAS:96 is the fourth in a series of surveys conducted by the U.S. Department

of Education. NPSAS:96 represents students of all ages and backgrounds at all types of postsecondary institutions (from less-than-2-year institutions that provide short-term vocational

training to 4-year colleges and universities) who were enrolled during the 1995–96 academic

year. The NPSAS surveys provide information about the price of postsecondary education and

how students pay those prices.

The estimates presented in this report were produced using the NPSAS:96 Data Analysis

System (DAS). The DAS is a microcomputer application that allows users to specify and generate their own tables from the NPSAS data. It produces the design-adjusted standard errors that

are necessary for testing the statistical significance of differences shown in the tables. For more

information regarding the DAS, readers should consult appendix C of this report.
x

ACKNOWLEDGEMENTS

Writing these reports is very much a team effort. Thanks go to all that helped during the

various phases of developing this report. At JBL Associates, John B. Lee provided key insights

and suggestions during the development of the report, Barry Christopher checked statistical

statements and edited text and Monika Hibbert-Flagg provided early tabulations. Laura Horn of

MPR Associates, as always, had good ideas that helped shape the issues, and provided diligent

technical support. Dennis Carroll of NCES provided the guidance and recommendations that

come from many years of experience. Technical Review Panel members Daniel Goldenberg,

Jacqueline King and Paula Knepper provided comments on an early draft that were instrumental

in helping to move the report to the final draft. Final reviews were provided by Jacqueline King,

American Council on Education, and, within the U.S. Department of Education, Karen O’Conor,

Office of the Deputy Commissioner, Ruth Harris, Office of Civil Rights, Daniel Goldenberg,

Planning and Evaluation Service, Patricia Dabbs, NAEP Analysis & Reporting ProgramAssessment Division, Patrick Rooney, Data Development Program, and Ann Mullen, National

Institute on Postsecondary Education, Libraries and Lifelong Learning.
xi

CONTENTS

Executive Summary.....................................................................................................................iii

Profile of Middle Income Full-Time, Full-Year Dependent Undergraduates .........................iii

Price of Attendance.................................................................................................................. iv

Financial Need and Financial Aid............................................................................................. v

Sources of Financial Aid......................................................................................................... vii

Summary................................................................................................................................viii

Foreword....................................................................................................................................... ix

Acknowledgements ....................................................................................................................... x

List of Tables ..............................................................................................................................xiii

List of Figures............................................................................................................................. xvi

Introduction................................................................................................................................... 1

Data and Approach to Analysis ................................................................................................ 1

Definition of Income Groups...............................................................................................2

Definition of Price of Attendance........................................................................................5

Definition of Financial Need, Unmet Need, and Net Price .................................................9

Significance of Reported Differences................................................................................10

Profile of Middle Income Full-Time, Full-Year Dependent Undergraduates....................... 11

Price of Attendance..................................................................................................................... 15

Price of Attendance and Type of Institution........................................................................... 15

Family Income, Academic Preparation, and Price of Attendance.......................................... 16

Summary............................................................................................................................23

Paying for College....................................................................................................................... 25

Meeting Financial Need.......................................................................................................... 25

Financial Need and Price of Attendance................................................................................. 27

Unmet Need .......................................................................................................................29

Applying For Financial Aid.........................................................................................29

Student Housing Status................................................................................................30

Net Price ................................................................................................................................. 33

Net Price And Price Of Attendance...................................................................................33

Paying the Net Price of Attendance...................................................................................36

Student Earnings ..........................................................................................................36

Percent Working, Average Hours Worked, and Earnings of Those Who

Worked...................................................................................................................37

Parents’ Contributions .................................................................................................40

Family Income and Net Price at the Highest Price-of-Attendance Level..........................43
CONTENTS

xii

Types and Sources of Financial Aid.......................................................................................... 45

Grants...................................................................................................................................... 48

Institutional Grants and Price of Attendance.......................................................................... 50

FTFY Dependent Undergraduates with Financial Need....................................................50

FTFY Dependent Undergraduates with No Financial Need..............................................51

Summary............................................................................................................................52

Loans....................................................................................................................................... 53

Summary and Conclusion .......................................................................................................... 58

References.................................................................................................................................... 61

Appendix A: Supplemental Tables............................................................................................ 63

Appendix B: Glossary................................................................................................................. 75

Appendix C: Technical Notes .................................................................................................... 86
xiii

LIST OF TABLES

Table Page

A Financial status for all full-time, full-year dependent undergraduates, by family income: 1995–96 .......................................................................................................... vi

1 Percentage of full-time, full-year dependent undergraduates with family incomes in 1994 of less than 125 percent of poverty level, Pell grant status and

Stafford subsidized loan status, by family income: 1995–96 ..............................................5

2 Percentage distribution of full-time, full-year dependent undergraduates according to institution type and highest degree, by price-of-attendance level:

1995–96................................................................................................................................9

3 Percentage distribution of full-time, full-year dependent undergraduates according to family income, by selected characteristics: 1995–96 .......................................13

4 Average number of Advanced Placement (AP) test taken and Scholastic Assessment Test (SAT) combined score for full-time, full-year dependent undergraduates, by family income: 1995–96..............................................................................14

5 Percentage distribution of full-time, full-year dependent undergraduates according to family income, by selected institutional characteristics: 1995–96...................16

6 Percentage distribution of full-time, full-year dependent undergraduates according to Scholastic Assessment Test (SAT) combined score, by price-ofattendance level: 1995–96..................................................................................................17

7 Average Scholastic Assessment Test (SAT) combined score and number of

Advanced Placement (AP) tests taken by full-time, full-year dependent undergraduates according to price-of-attendance level, by family income: 1995–96 ................18

8 Percentage distribution of full-time, full-year dependent undergraduates according to price-of-attendance level, by combined Scholastic Assessment Test

(SAT) score and family income: 1995–96.........................................................................20

9 Percentage of full-time, full-year dependent undergraduates who enrolled at

the highest price-of-attendance level in 1995–96, and the adjusted percentage

after controlling for the covariation of the variables listed in the table.............................22
LIST OF TABLES

xiv

Table Page

10 Financial status for all full-time, full-year dependent undergraduates, by priceof-attendance level and family income: 1995–96..............................................................26

11 Percentage of full-time, full-year dependent undergraduates with unmet need

who did not apply for financial aid and reasons for not applying for financial

aid, by family income: 1995–96 ........................................................................................31

12 Percentage distribution of full-time, full-year dependent undergraduates according to student housing status, by price-of-attendance level and family income: 1995–96...................................................................................................................31

13a Average amounts for selected components of price and total aid for full-time,

full-year dependent undergraduates from middle income families, by price-ofattendance level: 1995–96..................................................................................................34

13b Average amounts for selected components of sources of funds for full-time,

full-year dependent undergraduates from middle income families, by price-ofattendance level: 1995–96..................................................................................................34

14 Percentage distribution of full-time, full-year dependent undergraduates according to net price, by price-of-attendance level and family income: 1995–96 ..............35

15 Percentage of full-time, full-year dependent undergraduates who worked, average amount of hours worked and average earnings while enrolled, by priceof-attendance level and family income: 1995–96..............................................................38

16 Among full-time, full-year dependent undergraduates, average net price, percentage who received contributions or allowance from parents, and percentage

distribution according to amount of other type of support received from parents, by price-of-attendance level and family income: 1995–96 .......................................42

17a Average amounts for selected components of price and total aid for full-time,

full-year dependent undergraduates enrolled at the highest price-of-attendance

level, by family income: 1995–96 .....................................................................................44

17b Average amounts for selected components of sources of funds for full-time,

full-year dependent undergraduates enrolled at the highest price-of-attendance

level, by family income: 1995–96 .....................................................................................44

18 Percentage distribution of full-time, full-year dependent undergraduates according to aid receipt status, type of aid received, and ratio of aid to total aid

by type of aid, and price of attendance, by financial need status and family income: 1995–96...................................................................................................................46
LIST OF TABLES

xv

Table Page

19 Percentage of full-time, full-year dependent undergraduates receiving grant

aid according to source of grant, by financial need status and family income:

1995–96..............................................................................................................................48

20 Average grant amount awarded to full-time, full-year dependent undergraduates receiving grant aid according to source of grant, by financial need status

and family income: 1995–96 .............................................................................................49

21 Percentage of full-time, full-year dependent undergraduates receiving loans

according to type of loan, by financial need status and family income: 1995–

96........................................................................................................................................55

22 Average loan amount received by full-time, full-year dependent undergraduates who received loans according to type of loan, by financial need status and

family income: 1995–96 ....................................................................................................56

A1 Percentage of full-time, full-year dependent undergraduates with financial

need receiving grant aid according to source of grant, by price-of-attendance

level and family income: 1995–96.....................................................................................63

A2 Average grant amount awarded to full-time, full-year dependent undergraduates with financial need receiving grant aid according to source of grant, by

price-of-attendance level and family income: 1995–96.....................................................65

A3 Percentage of full-time, full-year dependent undergraduates with no financial

need receiving grant aid according to source of grant, by price-of-attendance

level and family income: 1995–96.....................................................................................67

A4 Average grant amount awarded to full-time, full-year dependent undergraduates with no financial need receiving grant aid according to source of grant, by

price-of-attendance level and family income: 1995–96.....................................................69

A5 Percentage of full-time, full-year undergraduates with financial need receiving

loans according to type of loan, by price-of-attendance level and family income: 1995–96...................................................................................................................71

A6 Average loan amount received by full-time, full-year dependent undergraduates with financial need who received loans according to type of loan, by

price-of-attendance level and family income: 1995–96.....................................................73

C1 Standard errors for table 22: Average loan amount received by full-time, fullyear dependent undergraduates who received loans according to type of loan,

by financial need status and family income: 1995–96.......................................................87
xvi

LIST OF FIGURES

Figure Page

A Percentage distribution of full-time, full-year dependent undergraduates from

middle income families, by price-of-attendance level: 1995–96....................................... iv

1 Percentage distribution of full-time, full-year dependent undergraduates, by family income: 1995–96 ............................................................................................................3

2 Percentage distribution of full-time, full-year dependent undergraduates from

middle income families, by expected family contribution: 1995–96 ..................................7

3 Percentage distribution of full-time, full-year dependent undergraduates from

middle income families, by price-of-attendance level: 1995–96.........................................8

4 Percentage distribution of full-time, full-year dependent undergraduates from

middle income families by financial need status, aid application status, receipt of

aid and unmet need status: 1995–96 ..................................................................................28

5 Percentage of full-time, full-year dependent undergraduates from middle income

families receiving aid according to financial aid status, by type of aid: 1995–96.............47

6 Percentage of full-time, full-year dependent undergraduates with financial need

receiving institutional grant aid, and average amount of institutional grant aid for

those receiving institutional grant aid, by price-of-attendance level and family income: 1995–96...................................................................................................................52

7 Percentage of full-time, full-year dependent undergraduates with no financial

need receiving institutional grant aid, and average amount of institutional grant

aid for those receiving institutional grant aid, by price-of-attendance level and

family income: 1995–96 ....................................................................................................53

8 Percentage of full-time, full-year dependent undergraduates with financial need

receiving loans, and average loan amount for those receiving loans, by price-ofattendance level and family income: 1995–96...................................................................57
1

INTRODUCTION

Researchers (McPherson & Schapiro, 1998; King, 1999; Choy, 2000) have explored the

effectiveness of student financial aid in meeting the needs of low-income undergraduates. These

analyses have been appropriate to understanding this purpose of federal student aid but have not

addressed a second key issue – affordability of college for middle income families. This report,

therefore, addresses this gap and focuses on how student financial aid is used in assisting students of middle income families afford the college of their choice.

Key questions addressed in the report are:

• Who are middle income undergraduates?

• Do middle income undergraduates attend institutions with prices of attendance that

are different from their lower income and higher income counterparts?

• How do middle income undergraduates pay for college?

• What financial aid sources are used by middle income undergraduates?

This report begins with a description of the data used and variable definitions. Later sections provide findings on the characteristics of middle income undergraduates in comparison to

their lower income and higher income counterparts, analyze the different prices of attendance by

income level and academic preparation, show how middle income undergraduates pay for college, and describe the financial aid awards of middle income undergraduates enrolled at different

price-of-attendance levels.

DATA AND APPROACH TO ANALYSIS

The source of data for this analysis is the National Postsecondary Student Aid Study

(NPSAS:96). These data provide a nationally representative sample of undergraduates enrolled

in accredited postsecondary institutions. In order to simplify the analyses, they are limited to

full-time, full-year dependent4 undergraduates who were enrolled during 1995–96 and who were

 

4

See Appendix B: Glossary for the definition of a dependent student.
INTRODUCTION

2

eligible to apply for federal financial aid.5 Therefore, only those who were U.S. citizens or permanent residents and who were eligible to apply for federal financial aid were included. Finally,

to avoid the confounding effects of different prices of attending and varying types of aid, the 2.4

percent of these full-time, full-year dependent undergraduates who attended more than one institution in 1995–96 were excluded. The term “FTFY dependent undergraduates” is used

throughout the report to represent the group of full-time, full-year dependent undergraduates who

were U.S. citizens/permanent residents, and who attended one accredited postsecondary institution in 1995–96.6

Definition of Income Groups

Middle income is defined as those with family incomes between $35,000 and $69,999 in

1994, the year of the income data included in NPSAS:96. The range for middle income needs to

be narrow enough to reduce the variability within the group, but broad enough to reasonably represent a middle group of students. Thirty-seven percent of FTFY dependent undergraduates had

family incomes between $35,000 and $69,999, and were middle income according to this definition (figure 1). Thirty-five percent of FTFY dependent undergraduates had family incomes below $35,000 and were defined as lower income, while 28 percent had family incomes of $70,000

or more, and were defined as higher income.

The $35,000 lower boundary for the middle income category divides students based upon

the likelihood of attending a public, 4-year, nondoctoral-granting institution in 1995–96 without

 

5

Sixty-six percent of citizen/permanent-resident dependent undergraduates who attended at least half-time for some

period in 1995–96 (and therefore were eligible for federal financial aid) enrolled on a full-time, full-year (FTFY)

basis. Those from higher income families were more likely to enroll as FTFY dependent undergraduates than were

middle income dependent undergraduates (68 percent compared with 65 percent). There was no statistically significant difference in the rates of full-time enrollment for middle income and lower income citizen/permanent-resident

dependent undergraduates attending at least half time.

6

FTFY dependent undergraduates were 26.4 percent of all undergraduates, and 49.6 percent of dependent undergraduates included in NPSAS:96.
INTRODUCTION

3

Figure 1.—Percentage distribution of full-time, full-year dependent undergraduates, by family income:

1995-96































Middle income

37%

Lower income

35%

Higher income

28%

NOTE: Dependent undergraduates are limited to those who attended only one institution and were U. S. citizens or permanent

residents.

SOURCE: U.S. Department of Education, National Center for Education Statistics, 1995-96 National Postsecondary Student Aid

Study (NPSAS:96), Undergraduate Data Analysis System.

a Pell grant,7 the federal student financial aid program aimed at low-income families. Forty-six

percent of FTFY dependent undergraduates in the $30,000 to $34,999 income group attending

these institutions had Pell grants, compared with 20 percent in the $35,000 to $39,999 income

group. About one-third of FTFY dependent undergraduates in the $30,000 to $34,999 income

 

7

The Pell Grant program provides grants for students from low-income families. The maximum award for the 1999-

2000 award year was $3,125. How much students get depends not only on their financial need, but on their cost of

attending school, whether they are a full-time or part-time student, and whether they attend school for a full academic year or less. If students have financial need remaining after EFC, Federal Pell Grant eligibility, and aid from

other sources are subtracted from their cost of attendance, they can borrow a Stafford Loan to cover all or some of

that remaining need. The government will pay the interest on the loan while they are in school, for the first six

months after they leave school, and when they qualify to have payments deferred. This type of loan is a subsidized

loan. If students do not have financial need remaining, they may borrow a Stafford Loan for the amount of EFC or

the annual Stafford Loan borrowing limit for their enrollment level, whichever is less. Students are then responsible

for paying all of the interest on the loan. This type of loan is called an unsubsidized loan. Because an unsubsidized

loan is not awarded on the basis of need, EFC is not taken into account. If students do not receive enough needbased aid to meet their cost of attendance, they can pay for some of their remaining costs with an unsubsidized loan.

They are then charged interest from the time the loan is disbursed until it is paid in full. Students can receive a subsidized Stafford Loan and an unsubsidized Stafford Loan for the same enrollment period. See

http://www.ed.gov/prog_info/SFA/FYE/FYE00/ for more details on federal financial aid programs.
INTRODUCTION

4

group had Pell grants over $1,000. In the $34,999 to $40,000 income group, 9 percent had Pell

grants over $1,000.8 Those with family incomes below $35,000 are included in the lower income category in this report.

In earlier reports on low-income students, Choy (2000, 1996) defined low-income students as those whose family incomes were below 125 percent of the federally established poverty

level for their family size. Sixteen percent of all FTFY dependent undergraduates had family

incomes below 125 percent of the federally established poverty level for their family size (table

1). In comparison, the lower boundary for the middle income category for this analysis was set

so that most families with incomes low enough to qualify for the federal grants program were

placed in the lower income group. Using this definition, 45 percent of those in the current lower

income group met Choy’s definition of low-income, as did 0.03 percent of those in the middle

income group and none of those in the higher income group.9

The $69,999 upper boundary for the middle income group captures aspects of institutional choice. It marks the income point beyond which most FTFY dependent undergraduates

could afford to attend public, doctoral-granting institutions without a subsidized loan. More than

one-quarter (27 percent) of those in the $65,000 to $69,999 income group who were attending

these institutions had subsidized loans, compared with 12 percent of those in the $70,000 to

$74,999 income group {t = 3.360}. Forty-three percent of those in the $70,000 to $74,999 income group used subsidized loans to attend private, not-for-profit, 4-year, nondoctoral-granting

institutions. Most families in the higher income group had sufficient resources to choose among

types of public and some private institutions without assistance from the federal subsidized loan

program that targets middle income families.

 

8

The apparent difference between 32 percent and 9 percent with Pell grants over $1,000 is not significant at the 0.05

level. The number of records in the two groups is relatively small, and the standard errors are large, therefore resulting in a t-value that is not statistically significant.

9

Not shown in table; U.S. Department of Education, National Center for Education Statistics, 1995–96 National

Postsecondary Student Aid Study (NPSAS:96), Undergraduate Data Analysis System.
INTRODUCTION

5

Table 1.—Percentage of full-time, full-year dependent undergraduates with family incomes in 1994 of less

than 125 percent of poverty level, Pell grant status and Stafford subsidized loan status, by family

income: 1995-96

Percent Percent receiving Percent receiving Percent receiving

Percent with receiving Pell grant of Stafford Stafford 

family income Pell grant in $1,000 or more in subsidized subsidized loan

in 1994 of public 4-year public 4-year, loan in public in private, notless than 125 nondoctoral- nondoctoral- doctoral- for-profit, 4-year

 percent of granting granting granting nondoctoral-

 poverty level institutions institutions institutions granting institutions

 Total 15.6 26.9 21.4 30.9 51.6

Family income

 Less than $15,000 96.7 71.4 67.3 47.4 54.0

 $15,000-$19,999 46.5 86.2 79.6 57.1 71.3

 $20,000-$24,999 19.3 66.9 51.0 52.9 67.0

 $25,000-$29,999 2.9 54.4 35.7 59.0 71.8

 $30,000-$34,999 0.9 46.1 31.6 50.9 58.2

 $35,000-$39,999 0.2 20.3 8.7 54.7 70.4

 $40,000-$59,999 0.0 5.1 1.1 34.6 62.2

 $60,000-$64,999 0.0 0.0 0.0 18.6 57.1

 $65,000-$69,999 0.0 0.0 0.0 27.0 53.8

 $70,000-$74,999 0.0 0.0 0.0 11.8 43.3

 $75,000 or more 0.0 0.0 0.0 6.6 20.3

NOTE: Dependent undergraduates are limited to those who attended only one institution and were U.S. citizens or permanent

residents.

SOURCE: U.S. Department of Education, National Center for Education Statistics, 1995-96 National Postsecondary Student Aid

Study (NPSAS:96), Undergraduate Data Analysis System.

Definition of Price of Attendance

The following analyses present information describing the amounts, sources, and types of

financial aid received by FTFY dependent undergraduates with different prices of attendance.

Price of attendance is the student budget for FTFY dependent undergraduates for 1995–96, and

includes tuition and fees and total nontuition costs.10

Four categories of price of attendance were established using 90 percent of the average

student budget for those attending selected types of institutions. Institutional types were chosen

based on the level of access to postsecondary education that they provided. The lowest price of

attendance was based on the costs of obtaining less than a four-year degree at a public institution

(the least expensive access to the postsecondary system). Moderate price of attendance was associated with the costs of obtaining a four-year degree at a nondoctoral public institution (the least

 

10Nontuition costs include books and supplies, room and board, transportation and personal expenses.
INTRODUCTION

6

expensive baccalaureate education). Upper price of attendance was associated with obtaining a

four-year degree at a nondoctoral private institution (a baccalaureate education with choice of

attending some private institutions). By choosing the 90 percent mark, those with Expected

Family Contributions11 (EFCs) at that level or below could afford to attend some, but not the average institution, in that group without financial aid. The levels provide indicators of modest access to different levels of postsecondary education. The fourth, or highest price-of-attendance

level included all the remaining student budgets above the upper boundary for the third price-ofattendance level.

• Lowest price-of-attendance level: dependent undergraduate budget less than $6,000

Forty-eight percent of middle income FTFY dependent undergraduates had EFCs of less

than $6,000 (figure 2) so that, without aid, their EFCs would not enable them to attend the average public, less-than-4-year institution on a full-time basis.

• Moderate price-of-attendance level: dependent undergraduate budget $6,000 to

$8,499

Twenty-two percent of middle income FTFY dependent undergraduates had EFCs between $6,000 and $8,499 so that, without aid, their EFCs would enable them to attend public,

less-than-4-year institutions and less-expensive baccalaureate institutions on a full-time basis.

• Upper price-of-attendance level: dependent undergraduate budget $8,500 to $15,999

Twenty-eight percent of middle income FTFY dependent undergraduates had EFCs between $8,500 and $15,999, so that, without aid, their EFCs would enable them to attend 4-year

institutions, and have some choice of attending public or private institutions.

• Highest price-of-attendance level: dependent undergraduate budget $16,000 or more

Two percent of middle income FTFY dependent undergraduates had EFCs of $16,000 or

more, indicating that they had family resources that could allow them to attend at the highest

price-of-attendance level without aid.

 

11Expected Family Contribution (EFC) is a measure of how much the student and his or her family can be expected

to contribute to the price of the student’s education. The EFC is calculated according to a formula specified in the

law. See Chapter 7 of the 1999-2000 Student Financial Aid Handbook, U.S. Department of Education, for more

information.
INTRODUCTION

7

While almost one-half of middle income FTFY dependent undergraduates had EFCs that

did not meet the price of attending at the lowest price-of-attendance level, 8 percent actually

were enrolled in the lowest price-of-attendance category in 1995–96 (figure 3). Another 20 percent were in the moderate price-of-attendance category, while almost one-half (49 percent) were

in the upper price-of-attendance category. On the other hand, while only two percent of middle

income FTFY dependent undergraduates had family resources sufficient to pay for enrollment at

the highest price-of-attendance level, 23 percent actually were enrolled at that price level. The

following chapters explore, in detail, financial aid and other financial strategies used to cover the

additional expenditures incurred when FTFY dependent undergraduates attend institutions with

prices above what they can “afford” based upon their EFC.

Figure 2.—Percentage distribution of full-time, full-year dependent undergraduates from middle 

income families, by expected family contribution: 1995-96 



 



 



 











 











 



 



 

Less than $6,000

48%

$6,000-$8,499

22%

$8,500-$15,999

28%

$16,000 or more

2%

NOTE: Dependent undergraduates are limited to those who attended only one institution and were U.S. citizens or 

permanent residents. 

SOURCE: U.S. Department of Education, National Center for Education Statistics, 1995-96 National Postsecondary 

Student Aid Study (NPSAS:96), Undergraduate Data Analysis System. 
INTRODUCTION

8

Ninety-one percent of FTFY dependent undergraduates enrolled at the lowest price-ofattendance level were in public, less-than-4-year institutions (table 2). Those enrolled at the

moderate price-of-attendance level were in a mixed group of institutions, including 40 percent in

public, less-than-4-year institutions, 31 percent in public 4-year, nondoctoral-granting institutions, and 24 percent in public doctoral-granting institutions. More than one-half (52 percent) of

FTFY dependent undergraduates enrolled at the upper price-of-attendance level were enrolled in

public doctoral-granting institutions, 23 percent were in public 4-year, nondoctoral institutions,

and 10 percent were in private not-for-profit, 4-year, nondoctoral-granting institutions. Forty-six

percent of those with the highest price of attendance were in private not-for-profit, 4-year, nonFigure 3.—Percentage distribution of full-time, full-year dependent undergraduates from middle 

income families, by price-of-attendance level: 1995-96 



 



 







 



 



 

















Upper level

49%

Moderate level

21%

Lowest level

8% Highest level

23%

NOTE: Percentages may not sum to 100 due to rounding. Dependent undergraduates are limited to those who attended 

only one institution and were U.S. citizens or permanent residents. 

SOURCE: U.S. Department of Education, National Center for Education Statistics, 1995-96 National Postsecondary 

Student Aid Study (NPSAS:96), Undergraduate Data Analysis System. 
INTRODUCTION

9

doctoral-granting institutions, 36 percent were in private not-for-profit, doctoral-granting institutions and 16 percent were in public doctoral-granting institutions.12

Table 2.—Percentage distribution of full-time, full-year dependent undergraduates according to institution

type and highest degree, by price-of-attendance level: 1995-96

Private not-

 Public Private not- for-profit, Private not-

 Public, 4-year, Public for-profit, 4-year, for-profit,

 less-than- nondoctoral- doctoral- less-than- nondoctoral- doctoral- Private,

4-year granting granting 4-year granting granting for-profit

 Total 18.6 17.5 33.7 0.8 17.2 9.8 2.5

Price-of-attendance level

 Lowest level 90.8 4.1 4.5 0.0 0.1 0.0 0.5

 Moderate level 39.8 30.6 23.8 0.4 4.1 0.4 0.9

 Upper level 7.9 23.1 52.1 1.4 10.4 1.7 3.5

 Highest level 0.0 0.8 15.6 0.3 45.5 35.6 2.3

NOTE: Percentages may not sum to 100 due to rounding. Dependent undergraduates are limited to those who attended only one

institution and were U.S. citizens or permanent residents.

SOURCE: U.S. Department of Education, National Center for Education Statistics, 1995-96 National Postsecondary Student Aid

Study (NPSAS:96), Undergraduate Data Analysis System.

Definition of Financial Need, Unmet Need, and Net Price

Financial need is the difference between EFC and student budget (price of attendance).

Federal financial aid awarded on the basis of financial need is designed to help fill the gap between EFC and price of attendance. However, the combination of financial aid from all sources

and EFC may not be adequate to cover the student budget. FTFY dependent undergraduates

with additional financial need, after considering EFC and financial aid, are defined as having

unmet need. FTFY dependent undergraduates are classified by income level, and whether they

have financial need. Analysis is also undertaken based on net price, which is defined as price of

attendance minus financial aid (including loans, which do not need to be repaid from currentyear funds). Net price represents the amount of money that students and their families have to

come up with during a given year in order for the student to enroll.

 

12Some FTFY dependent undergraduates paid out-of-state tuition and fees at public institutions where tuition and

fees plus other costs of attendance were sometimes $16,000 or more in 1995–96.
INTRODUCTION

10

Significance of Reported Differences

Comparisons were made in this report only when they achieved significance to the 95

percent confidence level. See Appendix C, Statistical Procedures for a detailed discussion of

significance testing.
11

PROFILE OF MIDDLE INCOME FULL-TIME, FULL-YEAR

DEPENDENT UNDERGRADUATES

Middle income full-time, full-year (FTFY) dependent undergraduates were 53 percent

female, 81 percent white, non-Hispanic, and nearly all came from families with at least three

family members13 (table 3). About one-third (35 percent) of their parents had high school degrees as their highest education level completed, while one-quarter had bachelor’s degrees. Sixteen percent had master’s degrees and 5 percent had doctoral or first-professional degrees.

Thirty-seven percent of middle income FTFY dependent undergraduates lived on campus, while

35 percent lived with their parents or relatives. Four characteristics differentiated middle income

FTFY dependent undergraduates from lower income FTFY dependent undergraduates. In comparison to lower income FTFY dependent undergraduates, a larger percentage of the middle income group were white, non-Hispanic (81 percent compared with 57 percent) and a smaller percentage came from two-person families (4 percent compared with 14 percent). More than onehalf of lower income FTFY dependent undergraduates’ parents were either high school graduates

(49 percent) or had less than a high-school degree (7 percent), compared with 35 percent and 2

percent respectively for middle income FTFY dependent undergraduates. Finally, middle income FTFY dependent undergraduates had an average combined Scholastic Assessment Test

(SAT) score 50 points higher than those from the lower income group (934 compared with 884)

(table 4). The distribution of SAT scores showed a smaller percentage of middle income FTFY

dependent undergraduates with scores below 825 (30 percent) compared with those in the lower

income group (40 percent), and a larger percentage with SAT scores in the 1,000-1,199 range

compared with lower income FTFY dependent undergraduates (30 percent compared with 22

percent).

Middle income FTFY dependent undergraduates also differed from their higher income

counterparts. A smaller percentage of middle income FTFY dependent undergraduates than

those in the higher income group were white, non-Hispanic (81 percent compared with 87 percent) (table 3), a larger percentage were living with their parents or relatives (35 percent compared with 26 percent), and a smaller percentage were living off campus (29 percent compared

with 33 percent). Furthermore, a smaller percentage of middle income FTFY dependent under-

 

13Refer to Appendix B for the definition of family and family member.
PROFILE OF MIDDLE INCOME FULL-TIME, FULL-YEAR DEPENDENT UNDERGRADUATES

12

graduates were fourth-year/seniors14 than were higher income FTFY dependent undergraduates

(14 percent compared with 17 percent). Parents’ educations distinguished middle income FTFY

dependent undergraduates from those from higher income families. Thirty-five percent of middle income FTFY dependent undergraduates had parents with high school educations as their

highest level completed, compared with 15 percent of higher FTFY dependent undergraduates.

Three times as many parents of higher income FTFY dependent undergraduates had doctoral or

first-professional degrees, compared with middle income parents (15 percent compared with 5

percent). Finally, a larger percentage of middle income FTFY dependent undergraduates worked

while enrolled than did those in the higher income group (78 percent compared with 68 percent).

The average combined SAT score of middle income FTFY dependent undergraduates

was 56 points lower than that of the higher income group (table 4). The percentage of middle

income FTFY dependent undergraduates with SAT scores below 825 was larger than for the

higher income group (30 percent compared with 21 percent), while the percentage with scores of

1,200 or more was smaller than for higher income FTFY dependent undergraduates (10 percent

compared with 17 percent). Finally, middle income FTFY dependent undergraduates had taken

fewer Advanced Placement (AP) courses, on average, than those in the higher income group (0.5

compared with 0.9).

 

14The fourth-year/senior category includes those who were fifth-year or higher and those who were seniors or graduated in 1995-96.
PROFILE OF MIDDLE INCOME FULL-TIME, FULL-YEAR DEPENDENT UNDERGRADUATES

13

Table 3.—Percentage distribution of full-time, full-year dependent undergraduates according to family

income, by selected characteristics: 1995-96

 All full-time,

full-year dependent Family income

undergraduates Lower income Middle income Higher income

 Total 100.0 100.0 100.0 100.0

Gender

 Male 46.7 43.8 47.1 49.9

 Female 53.3 56.2 52.9 50.1

Race/ethnicity

 White, non-Hispanic 74.3 56.9 80.8 86.8

 Black, non-Hispanic 8.9 16.1 6.6 3.1

 Hispanic 8.3 15.4 5.2 3.7

 Asian/Pacific Islander 7.0 9.6 5.9 5.2

 American Indian/Alaskan Native 0.7 1.1 0.8 0.2

 Other 0.9 1.0 0.7 1.0

Parent family size*

 Two 7.1 14.2 4.1 2.2

 Three 28.2 29.7 28.1 26.3

 Four 35.4 28.7 38.4 39.8

 Five or more 29.4 27.4 29.3 31.7

Highest education completed by either parent

 Less than high school 3.4 7.4 1.6 0.5

 High school graduate 34.9 49.4 34.9 14.7

 Some postsecondary education 16.2 15.9 18.4 13.3

 Bachelor's degree 23.5 17.7 24.5 30.0

 Master's degree 15.1 6.1 15.6 26.8

 Doctoral or first-professional degree 7.0 3.5 5.0 14.7

Student housing status 

 On campus 36.5 33.3 36.5 40.5

 Off campus 29.7 27.8 29.0 33.1

 With parents or relatives 33.7 38.8 34.5 26.4

Worked while enrolled

 Did work while enrolled 73.9 74.5 77.8 68.1

 Worked 1-19 hours per week while enrolled 30.8 30.2 31.7 30.2

 Worked 20-29 hours per week while enrolled 25.4 26.2 26.9 22.3

 Worked 30 or more hours per week while enrolled 17.7 18.1 18.9 15.6

 Did not work while enrolled 26.1 25.5 22.5 31.9
PROFILE OF MIDDLE INCOME FULL-TIME, FULL-YEAR DEPENDENT UNDERGRADUATES

14

Table 3.—Percentage distribution of full-time, full-year dependent undergraduates according to family

income, by selected characteristics: 1995-96—Continued

 All full-time,

full-year dependent Family income

undergraduates Lower income Middle income Higher income

Undergraduate level 

 First-year/freshman 43.2 43.7 44.6 40.8

 Second-year/sophomore 22.3 24.0 21.9 20.9

 Third-year/junior 18.6 17.5 18.4 20.4

 Fourth-year/senior 14.9 13.7 14.3 17.3

 Other 1.0 1.2 0.9 0.7

*Includes the number of people the respondent’s parent(s) supported between July 1, 1995 and June 30, 1996. Includes respondent and respondent’s parent(s).

NOTE: Percentages may not sum to 100 due to rounding. Dependent undergraduates are limited to those who attended only one

institution and were U.S. citizens or permanent residents.

SOURCE: U.S. Department of Education, National Center for Education Statistics, 1995-96 National Postsecondary Student Aid

Study (NPSAS:96), Undergraduate Data Analysis System.

Table 4.—Average number of Advanced Placement (AP) tests taken and Scholastic Assessment Test (SAT)

combined score for full-time, full-year dependent undergraduates, by family income: 1995-96

Number SAT

of AP combined Percentage with SAT combined score of:

 tests taken score Less than 825 825-999 1,000-1,199 1,200 or higher

 Total 0.6 935 30.8 30.2 27.7 11.3

Family income

 Lower income 0.4 884 39.8 30.2 21.9 8.2

 Middle income 0.5 934 30.4 30.6 29.5 9.5

 Higher income 0.9 990 21.4 29.7 31.8 17.1

NOTE: Dependent undergraduates are limited to those who attended only one institution and were U.S. citizens or permanent

residents.

SOURCE: U.S. Department of Education, National Center for Education Statistics, 1995-96 National Postsecondary Student Aid

Study (NPSAS:96), Undergraduate Data Analysis System.
15

PRICE OF ATTENDANCE

The Institute for Higher Education Policy (1999) stated that while one of the defined purposes of financial aid, especially federal financial aid, is to increase enrollment in postsecondary

education for those who could not otherwise afford to attend, financial aid also is designed to

provide students with access to institutions of different prices, and to help students and their

families keep pace with rising tuition levels. This section describes the price-of-attendance levels in which full-time, full-year (FTFY) dependent undergraduates were enrolled in 1995–96,

and examines whether differences existed by family income. The section concludes with an

analysis of the relationship of FTFY dependent undergraduates’ SAT scores to the price of attendance and family income.

PRICE OF ATTENDANCE AND TYPE OF INSTITUTION

The percentage of middle income FTFY dependent undergraduates in each of the priceof-attendance categories (8, 21, 49, and 23 percent) did not differ significantly from lower income families (table 5). In contrast, more higher income FTFY dependent undergraduates were

enrolled in the highest price-of-attendance level (34 percent), and fewer in the moderate price-ofattendance level (14 percent), than were middle income FTFY dependent undergraduates. About

one-half of FTFY dependent undergraduates in each income category were enrolled in the upper

price-of-attendance level in 1995–96.

The probability of attendance by institution type was about the same for middle income

and lower income FTFY dependent undergraduates, with the exception that more of those in the

lower income group attended private, for-profit institutions (4 percent compared with 2 percent).

One-third of middle income FTFY dependent undergraduates attended public, doctoral-granting

institutions in 1995–96, while a larger percentage of FTFY dependent undergraduates from

higher income families attended these institutions (39 percent). Twenty-one percent of middle

income FTFY dependent undergraduates enrolled in public, less-than-4-year institutions, while

less than the 13 percent enrolled from the higher income group. A smaller percentage of middle

income FTFY dependent undergraduates were enrolled in private, not-for-profit, doctoralgranting institutions than were those in the higher income group (9 percent compared with 15

percent).
PRICE OF ATTENDANCE

16

Table 5.—Percentage distribution of full-time, full-year dependent undergraduates according to family

income, by selected institutional characteristics: 1995-96

 All full-time,

full-year dependent Family income

undergraduates Lower income Middle income Higher income

 Total 100.0 100.0 100.0 100.0

Price-of-attendance level

 Lowest level 7.8 11.2 7.5 4.0

 Moderate level 19.6 23.5 20.5 13.9

 Upper level 47.4 45.2 49.2 47.9

 Highest level 25.1 20.1 22.8 34.3

Institution type and highest degree

 Public, less-than-4-year 18.6 21.1 20.8 12.7

 Public, 4-year, nondoctoral-granting 17.5 19.0 18.1 14.7

 Public, doctoral-granting 33.7 30.2 32.6 39.3

 Private, not-for-profit, less-than-4-year 0.8 0.9 0.8 0.6

 Private, not-for-profit, 4-year, nondoctoral-granting 17.2 17.8 17.1 16.5

 Private, not-for-profit, doctoral-granting 9.8 7.3 8.5 14.6

 Private, for-profit 2.5 3.6 2.0 1.6

NOTE: Percentages may not sum to 100 due to rounding. Dependent undergraduates are limited to those who attended only one

institution and were U.S. citizens or permanent residents.

SOURCE: U.S. Department of Education, National Center for Education Statistics, 1995-96 National Postsecondary Student Aid

Study (NPSAS:96), Undergraduate Data Analysis System.

In summary, FTFY dependent undergraduates from middle income families were about

as likely as those from lower income families to enroll at different price-of-attendance levels.

FTFY dependent undergraduates from middle income families were less likely to enroll at the

highest price-of-attendance level of $16,000 and above than those from higher income families.

FAMILY INCOME, ACADEMIC PREPARATION, AND PRICE OF ATTENDANCE

Researchers (Hossler, Braxton & Coopersmith, 1989; Hearn, 1984, 1988) have found that

undergraduates choose colleges based not only on the total and net price of attendance, but also

on other attributes of the institution and their families. These include location, programs available, perceived fit between students’ academic background and institutional selectivity, and parents’ level of education. Some institutions, in turn, are able to select from among a large supply

of qualified applicants to fill their available spaces, and average SAT scores are one measure of

this selectivity. Furthermore, price of attendance and selectivity are related. Twenty-two percent

of FTFY dependent undergraduates in the highest price-of-attendance level in 1995–96 had

combined SAT scores of 1,200 or more (table 6). Another 36 percent had scores in the 1,000-
PRICE OF ATTENDANCE

17

1,199 range, compared with 9 percent and 28 percent respectively in the upper price-ofattendance level, and 3 percent and 19 percent respectively in the moderate price-of-attendance

level.

Table 6.—Percentage distribution of full-time, full-year dependent undergraduates according to Scholastic

Assessment Test (SAT) combined score, by price-of-attendance level: 1995-96

Less than 825 825-999 1,000-1,199 1,200 or higher

 Total 30.8 30.2 27.7 11.3

Price-of-attendance level

 Lowest level 59.3 26.9 11.3 2.6

 Moderate level 45.6 32.2 18.9 3.3

 Upper level 30.0 32.3 28.4 9.3

 Highest level 15.5 26.0 36.3 22.2

NOTE: Percentages may not sum to 100 due to rounding. Dependent undergraduates are limited to those who attended only one

institution and were U.S. citizens or permanent residents.

SOURCE: U.S. Department of Education, National Center for Education Statistics, 1995-96 National Postsecondary Student Aid

Study (NPSAS:96), Undergraduate Data Analysis System.

The question to be examined in this section is whether the differences in enrollment patterns between middle income and higher income FTFY dependent undergraduates persist even

when taking into account the differences in SAT scores by family incomes shown earlier (table

4). The relationship between the number of AP tests taken, average and percentage distribution

of SAT scores, family incomes and price-of-attendance levels is examined, followed by a multivariate analysis that includes consideration of the interaction among FTFY dependent undergraduates’ individual and family characteristics and the probability of being enrolled in the highest price-of-attendance level.

At the two least expensive price-of-attendance levels, middle income FTFY dependent

undergraduates had a higher average combined SAT score than did those in the lower income

group (table 7). There were no differences in average SAT scores of middle income and higher

income FTFY dependent undergraduates at these two price-of-attendance levels. Middle income

FTFY dependent undergraduates at the upper price-of-attendance level had a lower average

combined SAT score than those in the higher income group but higher than those in the lower

income group. At the highest price-of-attendance level, middle income FTFY dependent undergraduates’ average SAT score was lower than those in the higher income group, but was about

the same as the lower income group. Middle income FTFY dependent undergraduates in the up-
PRICE OF ATTENDANCE

18

per and highest price-of-attendance levels had taken fewer AP courses than those in the higher

income group.

Table 7.—Average Scholastic Assessment Test (SAT) combined score and number of Advanced Placement

(AP) tests taken by full-time, full-year dependent undergraduates according to price-of-attendance

level, by family income: 1995-96

SAT Number

combined of AP

score tests taken

All

 Total 935 0.6

Family income

 Lower income 884 0.4

 Middle income 933 0.5

 Higher income 990 0.9

Lowest level

 Total 776 0.1

Family income

 Lower income 730 0.1

 Middle-income 830 0.2

 Higher income 749 --

 Moderate level

 Total 851 0.3

Family income

 Lower income 816 0.2

 Middle income 861 0.3

 Higher income 893 0.3

 Upper level

 Total 930 0.5

Family income

 Lower income 884 0.4

 Middle-income 936 0.5

 Higher income 972 0.8
PRICE OF ATTENDANCE

19

Table 7.—Average Scholastic Assessment Test (SAT) combined score and number of Advanced Placement

(AP) tests taken by full-time, full-year dependent undergraduates according to price-of-attendance

level, by family income: 1995-96—Continued

SAT Number

combined of AP

score tests taken

 Highest level

 Total 1,035 1.1

Family income

 Lower income 1,002 0.9

 Middle income 1,021 0.8

 Higher income 1,070 1.4

--Sample size too small for reliable estimate.

NOTE: Dependent undergraduates are limited to those who attended only one institution and were U.S. citizens or permanent

residents.

SOURCE: U.S. Department of Education, National Center for Education Statistics, 1995-96 National Postsecondary Student Aid

Study (NPSAS:96), Undergraduate Data Analysis System.

Another way to look at the relationship between family income, price of attendance, and

SAT scores is whether undergraduates with similar scores enroll at similar price-of-attendance

levels, independent of family income. Table 8 shows the percentage distribution of FTFY dependent undergraduates by income level and average combined SAT score across the four priceof-attendance levels.

The percentage distribution of middle income FTFY dependent undergraduates within

each SAT-score grouping by price of attendance differed from the distribution of those in the

higher income group in several instances. For those with combined SAT scores between 825 and

999, and for those with SAT scores between 1,000 and 1,199, a smaller percentage of middle income FTFY dependent undergraduates than those in the higher income group were in the highest

price-of-attendance level (21 percent compared with 31 percent, and 31 percent compared with

41 percent respectively). In the highest price-of-attendance level, there was no statistically significant difference in the percentages of middle income and higher income FTFY dependent undergraduates enrolled from the combined lowest SAT-score category, or the highest SAT-score

category. The percentages of those with SAT scores of 1,200 or more in each income group that
PRICE OF ATTENDANCE

20

were enrolled at the highest price-of-attendance level were not statistically different, standing at

54 percent overall.15

To summarize, middle income FTFY dependent undergraduates with mid-range combined SAT scores of 825-1,199 were less likely to be enrolled at the highest price-of-attendance

level than were those in the higher income group. However, the percentage distribution of middle income FTFY dependent undergraduates at each SAT-score level and price-of-attendance

level was about the same as the distribution of those in the lower income group.

Table 8.—Percentage distribution of full-time, full-year dependent undergraduates according to price-ofattendance level, by combined Scholastic Assessment Test (SAT) score and family income: 1995-96

Price-of-attendance level

 Lowest Moderate Upper Highest

All

 Total 7.8 19.6 47.4 25.1

Family income

 Lower income 11.2 23.5 45.2 20.1

 Middle income 7.5 20.5 49.2 22.8

 Higher income 4.0 13.9 47.9 34.3

 Less than 825 SAT

 Total 12.6 26.6 46.9 13.9

Family income

 Lower income 14.0 27.6 46.5 12.0

 Middle-income 12.0 28.2 45.9 13.9

 Higher income 11.0 21.8 49.6 17.6

825-999 SAT

 Total 5.8 19.1 51.3 23.7

Family income

 Lower income 6.8 20.2 52.8 20.2

 Middle income 6.5 22.2 50.1 21.2

 Higher income 3.8 13.9 51.4 30.9

 

15While there appears to be a large difference between the percentage for middle income and higher income FTFY

dependent undergraduates enrolled at the highest price-of-attendance level, the percentages are associated with large

standard errors and are, therefore, not statistically different.
PRICE OF ATTENDANCE

21

Table 8.—Percentage distribution of full-time, full-year dependent undergraduates according to price-ofattendance level, by combined Scholastic Assessment Test (SAT) score and family income: 1995-

96—Continued

Price-of-attendance level

 Lowest Moderate Upper Highest

 1,000-1,199 SAT

 Total 2.7 12.2 49.2 36.0

Family income

 Lower income 3.0 14.3 46.4 36.3

 Middle-income 4.4 13.4 50.9 31.3

 Higher income 0.3 9.3 49.1 41.3

 1,200 or higher SAT

 Total 1.5 5.2 39.4 54.0

Family income

 Lower income 0.9 6.5 41.2 51.4

 Middle income 3.9 6.6 41.1 48.4

 Higher income 0.0* 3.6 37.1 59.3

NOTE: Percentages may not sum to 100 due to rounding. Dependent undergraduates are limited to those who attended only one

institution and were U.S. citizens or permanent residents.

*This is a true zero; there are no cases for this group.

SOURCE: U.S. Department of Education, National Center for Education Statistics, 1995-96 National Postsecondary Student Aid

Study (NPSAS:96), Undergraduate Data Analysis System.

In order to determine whether the lower probability of middle income FTFY dependent

undergraduates enrolling at the highest price-of-attendance level was associated with family income independent of other individual and family characteristics, a multivariate analysis was

conducted using a regression model.16 In addition to family income, the model included a number of independent variables that describe students’ background and family characteristics. The

first column in table 9 shows the percentage of FTFY dependent undergraduates who were enrolled at the highest price-of-attendance level in 1995–96, before the percentages were adjusted.

The second column shows the corresponding percentages after being adjusted for the covariation

of the independent variables included in the regression equation. Asterisks indicate when a particular group differs significantly from the comparison group (shown in italics).

 

16See appendix C for details on the methods used.
PRICE OF ATTENDANCE

22

Table 9.—Percentage of full-time, full-year dependent undergraduates who enrolled at the highest price-ofattendance level in 1995-96, and the adjusted percentage after controlling for the covariation of the

variables listed in the table

 Unadjusted Adjusted Least squares Standard

 percentages1 percentages2 coefficient3 error4

 Total 25.1 25.1 37.2 6.8

Family income

 Lower income 20.1 23.2 -0.0 2.2

 Middle income5 22.8 23.3 † †

 Higher income 34.3 * 29.9 * 6.6 2.2

Gender

 Female 26.3 27.3 * 4.7 1.8

 Male 23.8 22.6 † †

Highest education completed by either parent

 Less than high school 12.8 19.5 † †

 High school graduate 18.3 24.1 4.6 5.1

 Some postsecondary education 16.7 20.6 1.1 5.4

 Bachelor's degree 24.9 * 24.7 5.2 5.3

 Master's degree 31.9 * 28.5 9.0 5.6

 Doctoral or first-professional degree 45.4 * 37.5 * 18.0 6.1

Parent family size

 Two 21.8 25.3 † †

 Three 24.2 25.1 -0.2 3.7

 Four 26.5 25.4 0.1 3.7

 Five or more 25.2 24.8 -0.4 3.7

Race/ethnicity

 White, non-Hispanic 26.4 25.0 † †

 Black, non-Hispanic 17.0 * 25.4 0.5 3.2

 Hispanic 14.3 * 20.4 -4.6 3.4

 Asian/Pacific Islander 35.0 31.6 6.6 3.5

 American Indian/Alaskan Native 15.2 20.2 -4.8 10.4

 Other 32.7 31.6 6.7 9.4

Scholastic Assessment Test (SAT) combined score

 Less than 825 13.9 * 14.0 * -33.2 3.2

 825-999 23.7 * 21.5 * -25.7 3.1

 1,000-1,199 36.0 * 32.5 * -14.7 3.1

 1,200 or more 54.0 47.1 † †

*p < .05.

†Not applicable for the reference group.

1

The estimates are from the NPSAS:96 Undergraduate Data Analysis System.

2

The percentages are adjusted for differences associated with other variables in the table (see appendix C).

3

Weighted least squares (WLS) coefficient, multiplied by 100 to reflect percentage (see appendix C). 4

Standard error of WLS coefficient, adjusted for design effect, multiplied by 100 to reflect percentage (see appendix C).

5

The italicized group in each category is the reference group being compared.

SOURCE: U.S. Department of Education, National Center for Education Statistics, 1995–96 National Postsecondary Student Aid

Study (NPSAS:96), Undergraduate Data Analysis System.
PRICE OF ATTENDANCE

23

The results show that even after controlling for student background and family factors

likely to affect enrollment at the highest price-of-attendance level, the percentage of middle income FTFY dependent undergraduates so enrolled still was lower than their higher income

counterparts. The unadjusted enrollment percentages for middle income and higher income

FTFY dependent undergraduates were 23 percent and 34 percent, respectively. After adjustment, 23 percent of middle income and 30 percent of higher income FTFY dependent undergraduates enrolled at the highest price-of-attendance level. Middle income FTFY dependent undergraduates continued to enroll at the highest price-of-attendance level at the same rates as their

lower income counterparts, both before and after adjustment for covariation (23 percent compared with 20 percent, respectively, and 23 percent compared with 23 percent after adjustment.)

The model does not include many factors that affect enrollment at the highest price-ofattendance level. However, of the factors included in the model, those associated with enrollment at the highest price of attendance, in addition to family income, included being female,

having parents whose highest level of education was a doctoral or first-professional degree, and

combined SAT scores of 1,200 or more.

Summary

The percentages of FTFY dependent undergraduates from lower income and middle income families enrolling at different price-of-attendance levels were not significantly different.

Middle income FTFY dependent undergraduates were less likely to enroll at the highest priceof-attendance level of $16,000 and above than were those from higher income families.

At the lowest, moderate, and upper price-of-attendance levels, middle income FTFY dependent undergraduates had higher average combined SAT scores than did those in the lower

income group, while the average combined SAT scores of the lower income and middle income

groups in the highest price-of-attendance level were not significantly different. Middle income

FTFY dependent undergraduates enrolled in the upper and highest price-of-attendance levels had

lower average combined SAT scores than those in the higher income group. Furthermore, middle income FTFY dependent undergraduates in the highest price-of-attendance category had

taken fewer AP courses than had those in the higher income group.

Middle income FTFY dependent undergraduates with mid-range combined SAT scores

of 825-1,199 were less likely to be enrolled at the highest price-of-attendance level than were

those in the higher income group. However, the percentage distribution of middle income FTFY
PRICE OF ATTENDANCE

24

dependent undergraduates at each SAT-score level and price-of-attendance level was about the

same as the distribution of those in the lower income group.

Multivariate analysis showed that even after controlling for student background and family factors likely to affect enrollment at the highest price-of-attendance level, the percentage of

middle income FTFY dependent undergraduates so enrolled was lower than their higher income

counterparts. Factors associated with enrollment at the highest price-of-attendance level, in addition to family income, included being female, having parents whose highest level of education

was a doctoral or first-professional degree, and combined SAT scores of 1,200 or more.

In conclusion, it appears that middle income FTFY dependent undergraduates with average scholastic characteristics, as measured by SAT scores, as well as those from lower income

families, were less likely to be enrolled at the highest price-of-attendance level than were those

with similar scholastic attributes who were from higher income families. There were no significant differences by family income in the percentages of those with combined SAT scores of

1,200 or more who were enrolled at the highest price-of-attendance level.
25

PAYING FOR COLLEGE

Full-time, full-year (FTFY) dependent undergraduates and their families typically pay for

college through a combination of family support, grants (some of which are need-based), subsidized and unsubsidized student loans, parental loans, and student earnings. Undergraduates may

reduce prices of attendance by attending institutions with lower prices, but this increases the

share of expenses that is expected to be met from expected family contribution (EFC), since EFC

is based on family resources independent of college prices. Using the federal financial aid methodology, when EFC meets or exceeds the price of attendance, a student is deemed to have no financial need.

The average price of attendance for middle income FTFY dependent undergraduates was

$12,284 in 1995–96, which was not statistically significantly different from the $11,715 average

price of attendance of those in the lower income group, but was less than the $14,316 for those in

the higher income group (table 10). Average EFC was $6,865 for middle income FTFY dependent undergraduates and the average net price after all financial aid was $7,867.

MEETING FINANCIAL NEED

Financial need is calculated by subtracting a student’s EFC from the institutionally determined budget (price of attendance). This represents the amount of financial aid for which the

student is eligible. Some students may receive total financial aid packages that are less than the

aid for which they are eligible. On the other hand, institutions are not bound by the federally

determined calculation of need in the award of institutional aid to those who do not receive federal need-based aid, nor are they constrained to award aid solely on the basis of financial need,

so undergraduates may receive a total financial aid package that exceeds the federally determined calculation of need.

Figure 4 shows the percentages of middle income FTFY dependent undergraduates with

financial need, applying for aid, receiving aid, and having unmet need. The percentages in parentheses represent all middle income FTFY dependent undergraduates in that row who are included in the particular box. By adding across the row that provides information, on applying for
PAYING FOR COLLEGE

26

aid, for example, we can calculate that 60 percent + 12 percent = 72 percent of all middle income

FTFY dependent undergraduates applied for financial aid in 1995–96.

Four out of five (79 percent) middle income FTFY dependent undergraduates had some

financial need, compared with almost all of those in the lower income category (99 percent), and

one-third of those in the higher income category (table 10). Middle income FTFY dependent

undergraduates with need had an average of $7,785 of financial need in 1995–96.

Sixty-five percent of middle income FTFY dependent undergraduates received financial

aid in 1995–96, 55 percent having financial need, and 10 percent not having financial need (figure 4). Ninety-one percent of middle income FTFY dependent undergraduates with need who

applied for aid received some aid, as did 78 percent of those with no financial need. Overall,

middle income FTFY dependent undergraduates had 31 percent of their price of attendance covered by financial aid (table 10).

Table 10.—Financial status for all full-time, full-year dependent undergraduates, by price-of-attendance level and family

income: 1995-96

Expected Amount of Unmet 

 family financial need5 Ratio of

 Price of contribution Percent need for Percent for those total aid

attendance (EFC) at any with those with with with to price of

at institution postsecondary financial financial Net price4

 unmet unmet attendance

where enrolled institution1,2 need3

 need for all2 need5 need for all2

All

 Total $12,663 $8,697 72.6 $8,921 $8,113 57.6 $4,797 33.5

Family income

 Lower income 11,715 1,617 98.5 10,372 5,628 86.9 4,914 49.0

 Middle income 12,284 6,865 78.6 7,785 7,867 58.3 4,375 31.2

 Higher income 14,316 19,729 33.1 7,198 11,462 20.9 5,745 17.8

Lowest level

 Total 5,243 5,107 64.0 3,669 3,874 57.5 2,085 26.5

Family income

 Lower income 5,152 1,200 95.8 4,237 2,972 86.2 2,262 42.4

 Middle-income 5,292 6,569 42.2 2,048 4,581 37.4 1,605 13.5

 Higher income 5,435 14,986 8.5 -- 5,227 8.5 -- 3.8

 Moderate level

 Total 7,255 6,612 65.5 4,842 5,200 54.8 2,910 28.1

Family income

 Lower income 7,186 1,281 99.6 5,970 4,080 89.2 3,271 42.9

 Middle income 7,255 6,682 59.8 3,010 5,668 44.3 2,200 21.4

 Higher income 7,398 17,458 6.3 -- 6,603 4.1 -- 10.4
PAYING FOR COLLEGE

27

Table 10.—Financial status for all full-time, full-year dependent undergraduates, by price-of-attendance level and family

income: 1995-96—Continued

Expected Amount of Unmet 

 family financial need5 Ratio of

 Price of contribution Percent need for Percent for those total aid

attendance (EFC) at any with those with with with to price of

at institution postsecondary financial financial Net price4

 unmet unmet attendance

where enrolled institution1,2 need3

 need for all2 need5 need for all2

Upper level

 Total 11,204 8,736 70.2 7,360 7,460 54.6 4,150 32.8

Family income

 Lower income 11,185 1,600 98.7 9,784 5,558 86.1 4,848 49.6

 Middle-income 11,114 6,913 82.6 5,710 7,632 60.1 3,558 30.4

 Higher income 11,346 19,395 20.8 2,975 9,416 10.9 2,220 16.6

Highest level

 Total 21,947 11,370 85.2 15,025 12,935 65.4 7,790 41.4

Family income

 Lower income 21,865 2,279 98.2 20,259 9,081 86.4 8,518 58.6

 Middle income 21,620 7,024 98.7 14,934 11,427 73.7 7,449 47.4

 Higher income 22,293 21,663 64.1 9,415 17,007 43.2 7,257 24.0

1

Expected Family Contribution (EFC) may exceed actual student budget; therefore, the average EFC reported in this table cannot be used to calculate financial need and unmet need reported in this table. 2

Includes zero values.

3

Student budget minus EFC.

4

Student budget minus all aid.

5

Student budget minus EFC minus aid.

NOTE: Dependent undergraduates are limited to those who attended only one institution and were U.S. citizens or permanent residents. All

averages reported in this table include zero values.

SOURCE: U.S. Department of Education, National Center for Education Statistics, 1995-96 National Postsecondary Student Aid Study

(NPSAS:96), Undergraduate Data Analysis System.

FINANCIAL NEED AND PRICE OF ATTENDANCE

Because EFC takes into account family size and the number of other college students in

the family, as well as family income and assets, 42 percent of FTFY dependent undergraduates

from middle income families had financial need even though they were attending in the lowest

price-of-attendance level (table 10). At the moderate price-of-attendance level, 60 percent of

middle income FTFY dependent undergraduates had financial need, as did 83 percent of those in
PAYING FOR COLLEGE

28

the upper price-of-attendance level, and almost all (99 percent) of those in the highest price-ofattendance category. The average net price17 after financial aid for middle income FTFY

 

17Net Price is price of attendance minus financial aid (including loans, which do not need to be repaid from currentyear funds).

Figure 4.—Percentage distribution of full-time, full-year dependent undergraduates from middle income

families by financial need status, aid application status, receipt of aid, and unmet need status:

1995-96

1

The first number in the box represents the percentage in the reported group of the specified variable, so that the subgroup sums

to 100 percent of the full-time, full-year dependent undergraduates in the preceding subgroup (e.g., 78.6 percent of those with

financial need applied for aid, and 21.4 percent did not apply for aid, thus accounting for all those with financial need). 2

The second number in the box, in the parentheses, represents the percentage in the reported group across all variables in the row,

or the percentage of full-time, full-year dependent undergraduates who fall in this cell, so that the row sums to 100 percent (e.g.,

of all full-time full-year dependent undergraduates from middle income families, 60.2 percent had financial need and applied for

aid, 18.4 percent of those did not apply for aid, of those with no financial need, 12.1 percent applied for aid, while 9.3 percent did

not, thus accounting for all full-time, full-year dependent undergraduates from middle income families). 3

These undergraduates are those with no financial need. Financial need is the difference between expected family contribution

and price of attendance. Unmet need occurs when there is financial need and financial aid does not cover all of the financial

need. Thus, if a student does not have financial need, he or she cannot have unmet need.

NOTE: Percentages may not sum to 100 due to rounding. Dependent undergraduates are limited to those who attended only one

institution and were U.S. citizens or permanent residents.

SOURCE: U.S. Department of Education, National Center for Education Statistics, 1995-96 National Postsecondary Student Aid

Study (NPSAS:96), Undergraduate Data Analysis System.

Middle income full-time, full-year dependent undergraduates 

No financial need 

21.4 

Applied for aid 

76.61

(60.2)

2

Did not apply 

for aid 

23.4 

(18.4)

Applied for aid 

56.6 

(12.1)

Did not apply 

for aid 

43.4 

(9.3)

Received aid 

90.9 

(54.7)

Did not receive 

aid 

9.1 

(5.5)

Did not receive 

aid 

100.0 

(18.4)

Did not receive 

aid 

100.0 

(9.3)

Did not receive 

aid 

22.0 

(2.7)

Received aid 

78.0 

(9.5)

Financial need 

78.61

Had unmet need 

63.0 

(34.4)

Had unmet need 

100.0 

(5.5)

Had unmet need 

100.0 

(18.4)

Need met 

37.0 

(20.3) 

No financial need3 

100.0 

(21.4) 
PAYING FOR COLLEGE

29

dependent undergraduates ranged from $4,581 for those enrolled at the lowest price-ofattendance level to $11,427 for those enrolled at the highest price-of-attendance level. The average EFC for middle income FTFY dependent undergraduates ranged narrowly between $6,569

and $7,024, with an overall average of $6,865, because EFC is not dependent on the price of attendance.18

Unmet Need

Financial aid, coupled with EFC, does not always cover the price of attendance. Fiftyeight percent of all middle income FTFY dependent undergraduates had unmet financial need

after EFC and the award of all aid, compared with 21 percent of those in the higher income

group (table 10). Lower income FTFY dependent undergraduates, however, had the largest percent with unmet need (87 percent).

The percentage of middle income FTFY dependent undergraduates with unmet need at

each price-of-attendance level (37, 44, 60 and 74 percent) was smaller than for those in the lower

income group (86, 89, 86, and 86 percent), but higher than for those in the higher income group

(9, 4, 11, and 43 percent). The average unmet need of middle income FTFY dependent undergraduates with financial need was $4,375, ranging from $1,605 in the lowest price-of-attendance

level to $7,449 in the highest price-of-attendance level.

Students managed to attend college full-time even though there was an apparent gap between their price of attendance and the amount of support they received from financial aid and

EFC. Perhaps the federal financial aid formula did not accurately measure their families’ real

ability to pay for college or the student may have spent less than the average allowance for living

expenses. These possibilities are considered in the next section.

Applying For Financial Aid

Almost one-quarter (23 percent) of middle income FTFY dependent undergraduates with

financial need did not apply for financial aid (figure 4), constituting 32 percent of the middle income group with unmet need (table 11). The other 69 percent of FTFY dependent undergraduates with unmet financial need did apply for aid, but received less than the amount needed using

the federal financial aid formulas.

 

18The reader is reminded that EFC is based on dependency, family size, income, assets and number in college.
PAYING FOR COLLEGE

30

Why did these aid-eligible students not apply for financial aid? Forty-eight percent of

middle income FTFY dependent undergraduates with unmet need who did not apply for aid said

either they or their families could pay, 32 percent said they did not apply because they thought

their family incomes were too high, and 9 percent did not apply for aid because they did not want

to incur debt (table 11).19 A larger share of middle income FTFY dependent undergraduates indicated that they did not want debt than those from the higher income group (9 percent compared

with 1 percent).

Choy (2000), in her study of low-income students, found that 11 percent of that group did

not apply for financial aid. She suggested that in addition to these reasons for not applying, others might include erroneous beliefs of ineligibility, a change in financial circumstances between

the end of 1994 (the year used for determining the family income) and when they enrolled in

1995–96, or family assets not included in EFC assessment that made financial aid unnecessary.

The foregoing analysis has shown that 58 percent of middle income families or the students themselves contribute more than their EFC to attend the colleges in which they have chosen to enroll. One-third of middle income FTFY dependent undergraduates with unmet need had

not applied for financial aid. Reasons given included a belief that family income was too high

(32 percent), or that the family could afford to pay (48 percent). But for those who did apply for

aid, and did not have their financial need met, it could mean that they and their families were

making greater financial effort to attend their institution of choice.

Student Housing Status

The needs analysis system credits students who live at home with a minimum expense

even though no money changes hands. Living at home is a way that a student with limited resources can save money. Prior to 1998 the law specified a minimum allowance for students living with parents. (Effective October 1, 1998, these minimum limits were removed.)

 

19The U.S. Department of Education estimated EFC for non-applicants using regression methods as part of the

NPSAS study. For details regarding the methodology, refer to Appendix I of: Riccobono, J. A., Whitmore, R. W.,

Gable, T. J., Traccarella, M. A., Pratt, D. J., Berkner, L. K. National Postsecondary Student Aid Study, 1995-96

(NPSAS:96), Methodology Report, NCES 98-073. (Washington, DC: U.S. Department of Education, National Center for Education Statistics, 1997).
PAYING FOR COLLEGE

31

Table 11.—Percentage of full-time, full-year dependent undergraduates with unmet need who did not apply

for financial aid and reasons for not applying for financial aid, by family income: 1995-96

Reasons for not applying

Family or

 Percent did Did not Family income student

 not apply for aid want debt too high could pay

 Total 24.2 5.2 34.8 44.6

Family income

 Lower income 14.7 1.9 35.0 37.5

 Middle income 31.5 9.2 31.6 47.6

 Higher income 45.4 0.9 42.2 49.3

NOTE: Dependent undergraduates are limited to those who attended only one institution and were U.S. citizens or permanent

residents.

SOURCE: U.S. Department of Education, National Center for Education Statistics, 1995-96 National Postsecondary Student Aid

Study (NPSAS:96), Undergraduate Data Analysis System.

 Middle income FTFY dependent undergraduates were more likely than those in the

higher income group to live with parents or relatives (35 percent compared with 26 percent), but

about the same as those in the lower income group (table 12). At each price-of-attendance level,

the percentages living off campus or with parents or relatives were about the same for each of the

three income groups. Eighty-one percent of middle income FTFY dependent undergraduates

attending at the lowest-price-of-attendance level lived with parents or relatives, compared with

60 percent at the moderate price-of-attendance level, 27 percent at the upper price-of-attendance

level, and 14 percent at the highest price-of-attendance level. It appears housing status was not

used by FTFY dependent undergraduates in different income groups to reduce their college expenses within price-of-attendance level, although each income group was less likely to live with

parents as price-of-attendance level increased.

Table 12.—Percentage distribution of full-time, full-year dependent undergraduates according to student

housing status, by price-of-attendance level and family income: 1995-96

 With parents

 On campus Off campus or relatives

 

All

 Total 36.5 29.7 33.7

Family income

 Lower income 33.3 27.8 38.8

 Middle income 36.5 29.0 34.5

 Higher income 40.5 33.1 26.4
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32

Table 12.—Percentage distribution of full-time, full-year dependent undergraduates according to student

housing status, by price-of-attendance level and family income: 1995-96—Continued

 With parents

 On campus Off campus or relatives

 Lowest level 

 Total 9.2 9.6 81.3

Family income

 Lower income 9.4 8.4 82.2

 Middle income 9.7 10.4 80.0

 Higher income 7.2 11.8 81.1

 Moderate level 

 Total 18.7 21.6 59.6

Family income

 Lower income 17.6 21.0 61.5

 Middle income 19.5 20.5 60.0

 Higher income 19.6 25.1 55.3

 Upper level 

 Total 35.4 39.2 25.5

Family income

 Lower income 35.2 38.2 26.6

 Middle income 35.5 38.1 26.5

 Higher income 35.4 41.7 22.9

 Highest level 

 Total 61.2 24.6 14.2

Family income

 Lower income 60.9 23.4 15.7

 Middle income 62.8 23.1 14.1

 Higher income 60.1 26.7 13.3

--Sample size too small for reliable estimate.

NOTE: Percentages may not sum to 100 due to rounding. Dependent undergraduates are limited to those who attended only one

institution and were U.S. citizens or permanent residents.

SOURCE: U.S. Department of Education, National Center for Education Statistics, 1995-96 National Postsecondary Student Aid

Study (NPSAS:96), Undergraduate Data Analysis System.
PAYING FOR COLLEGE

33

NET PRICE

Another approach to assessing how students meet their college expenses is to look at net

price, which is defined as price of attendance minus financial aid. Net price represents the

amount of money that students and their families have to come up with during a given year in

order for the student to enroll, or out-of-pocket contributions.

Analysis of out-of-pocket contributions does not depend on the assumption that families

can afford to pay the EFC, that EFC is set at the appropriate level, or that parents actually contribute their EFC even if they can afford to do so. Two components of out-of-pocket expenses

are examined – students’ earnings while they were enrolled and parents’ contributions.

Earnings and parents’ contributions data were reported through telephone interviews that

asked students to recollect earnings and family financial contributions. Therefore, they only approximate amounts earned or contributed because respondents may either have recollected inaccurately, or may not have accurately known their families’ contributions. Thus, while the results

may provide an incomplete picture of how students and their families actually met out-of-pocket

expenses, they do help to identify the extent to which financial aid programs help middle income

students meet the expenses of college, and whether self-help (student earnings) and family help

vary by family-income level and price of attendance.

Net Price And Price Of Attendance

Table 13a shows how price of attendance for middle income FTFY dependent undergraduates is broken down into that amount covered by aid, and the amount remaining as net

price. Table 13b shows the components of aid received by middle income FTFY dependent undergraduates, and the amount of net price covered by student earnings, assuming that all student

earnings were committed to the price of attending college. The remaining amount of net price

comes from “unknown” contributions that may include parents, but may also come from other

sources. NPSAS:96 contains data on the percent of parents contributing to students’ price of attendance, but it does not contain the total amount contributed by parents or others. The “unknown” amount of contribution to net price will be higher when students do not contribute all of

their earnings to costs of attending college (which they are not required to do).
PAYING FOR COLLEGE

34

Table 13a.—Average amounts for selected components of price and total aid for full-time, full-year

dependent undergraduates from middle income families, by price-of-attendance level: 1995-96

Expected family

contribution (EFC)

Price of at any postsecondary

 attendance Total aid Net price* institution

 Total $12,284 $4,418 $7,867 $6,865

Price-of-attendance level

 Lowest 5,292 711 4,581 6,569

 Moderate 7,255 1,587 5,668 6,682

 Upper 11,114 3,482 7,632 6,913

 Highest 21,620 10,193 11,427 7,024

*Student budget minus all aid.

NOTE: Dependent undergraduates are limited to those who attended only one institution and were U.S. citizens or permanent

residents. All averages reported in this table include zero values.

SOURCE: U.S. Department of Education, National Center for Education Statistics, 1995-96 National Postsecondary Student Aid

Study (NPSAS:96), Undergraduate Data Analysis System.

Table 13b.—Average amounts for selected components of sources of funds for full-time, full-year dependent

undergraduates from middle income families, by price-of-attendance level: 1995-96

Aid Net price

 Loan Grant Work-study Other Earnings Unknown

 Total $2,229 $1,873 $175 $141 $3,380 $4,487

Price-of-attendance level

 Lowest 306 388 4 14 4,478 103

 Moderate 975 523 36 53 3,737 1,931

 Upper 2,219 1,060 111 92 3,419 4,213

 Highest 4,009 5,323 495 365 2,508 8,919

NOTE: Dependent undergraduates are limited to those who attended only one institution and were U.S. citizens or permanent

residents. All averages reported in this table include zero values.

SOURCE: U.S. Department of Education, National Center for Education Statistics, 1995-96 National Postsecondary Student Aid

Study (NPSAS:96), Undergraduate Data Analysis System.

Because most financial aid is awarded on the basis of financial need, families with higher

incomes have a higher net price after financial aid (see table 10). But, net price also increases at

each price-of-attendance level (table 13a). Middle income families, for example, were left with

an average out of-pocket expense (i.e., net price) of $4,581 for FTFY dependent undergraduates

attending at the lowest price-of-attendance level, $5,668 for those attending at the moderate
PAYING FOR COLLEGE

35

price-of-attendance level, $7,632 for those attending at the upper price-of-attendance level, and

$11,427 for those attending at the highest price-of-attendance level.

At the lowest price-of-attendance level, 46 percent of middle income FTFY dependent

undergraduates faced a net price of between $2,500 and $4,999, while 48 percent faced a net

price of between $5,000 and $7,499 (table 14). At the moderate price-of-attendance level, 54

percent of the middle income FTFY dependent undergraduates had a net cost between $5,000

and $7,499. For middle income FTFY dependent undergraduates attending at the upper price-ofattendance level, 56 percent faced a net price of $7,500 or more, while at the highest price-ofattendance level, one-half faced a net price of $10,000 or more. Even if EFC is only an imprecise measure of a family’s ability to contribute toward the price of college, most middle income

FTFY dependent undergraduates attending at the highest price-of-attendance level faced a net

price considerably in excess of the $7,024 average EFC.

Table 14.—Percentage distribution of full-time, full-year dependent undergraduates according to net price,

by price-of-attendance level and family income: 1995-96

 Less $10,000

 than $1,000- $2,500- $5,000- $7,500- or

 $1,000 2,499 4,999 7,499 9,999 more

 All

 Total 6.9 7.6 17.4 22.1 18.2 27.8

Family income

 Lower income 12.3 14.6 27.0 20.7 12.3 13.1

 Middle income 5.0 5.3 16.9 27.3 21.1 24.3

 Higher income 2.8 2.2 6.3 17.0 21.5 50.2

 Lowest level

 Total 5.3 16.7 42.7 35.3 0.0 0.0

Family income

 Lower income 10.3 29.6 46.4 13.7 0.0 0.0

 Middle income 0.5 4.7 46.4 48.4 0.0 0.0

 Higher income 0.0 2.3 20.4 77.4 0.0 0.0

 Moderate level

 Total 6.5 10.3 23.7 44.1 15.4 0.0

Family income

 Lower income 11.9 16.8 35.1 28.9 7.4 0.0

 Middle income 3.6 7.2 18.9 54.4 16.0 0.0

 Higher income 1.1 3.0 9.6 55.5 30.8 0.0
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36

Table 14.—Percentage distribution of full-time, full-year dependent undergraduates according to net price,

by price-of-attendance level and family income: 1995-96—Continued

 Less $10,000

 than $1,000- $2,500- $5,000- $7,500- or

 $1,000 2,499 4,999 7,499 9,999 more

Upper level

 Total 7.5 6.2 15.0 16.7 26.6 28.0

Family income

 Lower income 13.8 11.6 22.6 20.1 18.5 13.4

 Middle income 5.2 5.0 14.6 19.0 29.9 26.4

 Higher income 3.4 1.7 6.6 9.8 31.4 47.1

Highest level

 Total 6.6 5.4 9.2 11.0 10.2 57.7

Family income

 Lower income 10.5 10.4 16.7 16.2 11.1 35.2

 Middle income 7.4 4.5 10.3 14.1 13.9 49.8

 Higher income 3.0 2.6 2.9 4.6 6.3 80.6

NOTE: Percentages may not sum to 100 due to rounding. Dependent undergraduates are limited to those who attended only one

institution and were U.S. citizens or permanent residents.

SOURCE: U.S. Department of Education, National Center for Education Statistics, 1995-96 National Postsecondary Student Aid

Study (NPSAS:96), Undergraduate Data Analysis System.

Paying the Net Price of Attendance

Student Earnings

Students who work are expected to make some contribution to paying for college. In

1999-2000, EFC included 50 percent of students’ adjusted income after deduction of tax allowances and income protection allowances of $2,200 per year. The actual amount from earnings

that students commit to paying for college is not known.

How do middle income FTFY dependent undergraduates’ earnings relate to net price at

each price-of-attendance level? Average earnings20 for all middle income FTFY dependent undergraduates were about the same at the lowest, moderate and upper price-of-attendance levels

(table 13b). For the small percentage of middle income FTFY dependent undergraduates attending at the lowest price-of-attendance level (8 percent, see figure 3), average earnings were

 

20The averages in tables 13a and 13b include zero values.
PAYING FOR COLLEGE

37

$4,478, and net price was $4,581 (table 13a).21 For those attending at the moderate price-ofattendance level, average earnings were $3,737 and net price was $5,668. For those attending at

the upper price-of-attendance level, average earnings were $3,419 and net price was $7,632.

Middle income FTFY dependent undergraduates attending at the highest price-of-attendance

level had lower average earnings than for those enrolled at the other three price-of-attendance

levels ($2,508), and this amount was only about 20 percent of their net price of $11,427.

Percent Working, Average Hours Worked, and Earnings of Those Who Worked

The percentages of middle income FTFY dependent undergraduates who worked at the

moderate, upper and highest price-of-attendance levels were about the same (about threequarters) (table 15).22 Middle income FTFY dependent undergraduates who worked while enrolled at the highest price-of-attendance level worked fewer average hours (16.5) than did those

who were enrolled at the lowest, moderate and upper price-of-attendance levels (25.0, 23.0 and

21.1 hours respectively).23 The average dollars earned by those who worked24 was lower for

middle income FTFY dependent undergraduates enrolled at the highest price-of-attendance level

($3,520) compared with those enrolled at the lowest, moderate and upper levels ($5,478, $4,788

and $4,923 respectively). In short, middle income FTFY dependent undergraduates enrolled at

the highest price-of-attendance level worked fewer hours, and earned less than those in the middle income group who were enrolled at other price-of-attendance levels.

Overall, the percent of middle income FTFY dependent undergraduates who worked

while enrolled (78 percent) was about the same as those working while enrolled in the lower income group. Fewer higher income FTFY dependent undergraduates than those in the middle

income group worked while enrolled.

The percentages working while attending at the lowest price-of-attendance level were

about the same for each income group (81 percent). At the moderate price-of-attendance level,

 

21The reader is reminded that students are not expected to contribute all of their earnings toward their EFC or price

of attendance. The actual amount contributed from earnings is not known and some may contribute more or less

than calculated for their EFC.

22A larger percentage of middle income FTFY dependent undergraduates worked while enrolled at the lowest priceof-attendance level (86 percent) than did those who were enrolled at the upper and highest price-of-attendance levels

(74 and 76 percent respectively).

23The difference between hours worked for those enrolled at the lowest and upper price-of-attendance level was statistically significant (25 percent compared with 21 percent).

24The averages on table 15 do not include zero values.
PAYING FOR COLLEGE

38

82 percent of middle income FTFY dependent undergraduates worked, compared with 70 percent of those in the lower income group, but about the same as those in the higher income group.

Seventy-six percent of middle income and lower income FTFY dependent undergraduates attending at the highest price-of-attendance level worked, compared with 60 percent of those in the

higher income group.

Average hours worked for those who worked, and average earnings for those who

worked, are about the same for each income group within price-of-attendance level.

In summary, middle income FTFY dependent undergraduates’ earnings were similar to

net price at the lowest price-of-attendance level but only about 20 percent of the net price for

those attending at the highest price-of-attendance level. Those enrolled at the highest price-ofattendance level worked fewer hours and earned less than middle income students enrolled at

other price-of-attendance levels, even though they faced the highest net price of attendance.

Fewer higher income FTFY dependent undergraduates than those in the middle income group

worked while enrolled at the highest price-of-attendance level. Fewer lower income FTFY dependent undergraduates than those in the middle income group worked while enrolled at the

moderate price-of-attendance level. Within price-of-attendance level, average hours worked and

average earnings for those who worked were about the same for each income group.

Table 15.—Percentage of full-time, full-year dependent undergraduates who worked, average amount of

hours worked and average earnings while enrolled, by price-of-attendance level and family income: 1995-96

Average hours

 Percent worked per Average

 working week while earnings

 while enrolled enrolled while enrolled

 

All

 Total 73.9 20.9 4,424

Family income

 Lower income 74.5 21.0 4,248

 Middle income 77.5 20.9 4,644

 Higher income 68.1 20.4 4,305
PAYING FOR COLLEGE

39

Table 15.—Percentage of full-time, full-year dependent undergraduates who worked, average amount of

hours worked and average earnings while enrolled, by price-of-attendance level and family income: 1995-96—Continued

Average hours

 Percent worked per Average

 working week while earnings

 while enrolled enrolled while enrolled

 

 Lowest level 

 Total 81.4 24.1 4,708

Family income

 Lower income 75.3 22.3 4,220

 Middle income 86.3 25.0 5,478

 Higher income 89.9 -- --

 Moderate level 

 Total 76.1 23.5 5,167

Family income

 Lower income 69.6 23.3 5,005

 Middle income 81.6 23.0 4,788

 Higher income 78.6 25.1 6,296

 Upper level 

 Total 73.0 20.7 4,481

Family income

 Lower income 75.6 20.9 4,261

 Middle income 74.4 21.1 4,923

 Higher income 68.2 19.9 4,077

 Highest level 

 Total 70.7 17.0 3,469

Family income

 Lower income 78.2 17.6 3,325

 Middle income 76.2 16.5 3,520

 Higher income 60.4 17.2 3,535

--Sample size too small for reliable estimate.

NOTE: Percentages may not sum to 100 due to rounding. Dependent undergraduates are limited to those who attended only one

institution and were U.S. citizens or permanent residents.

SOURCE: U.S. Department of Education, National Center for Education Statistics, 1995-96 National Postsecondary Student Aid

Study (NPSAS:96), Undergraduate Data Analysis System.
PAYING FOR COLLEGE

40

Parents’ Contributions

The total amount of parental financial contribution to students’ price of attendance is not

available in NPSAS:96. Information on the types of contributions made by parents were collected through telephone interviews to students. It is not possible, therefore, to directly compare

parents’ contributions to the gap between students’ earnings and their net price of attendance.

Nor is it possible to know what contributions may have come from other private sources. In this

section, therefore, information on the percentage of parents contributing is analyzed, and the

“unknown” source of support shown in table 13b is compared to EFC to gain insight into parents’ contributions to students’ price of attendance.

Ninety-one percent of middle income FTFY dependent undergraduates’ parents made

some contribution to their price of attendance in 1995–96, a percentage that was larger than for

those in the lower income group (79 percent), but smaller than the 98 percent contributing for

those in the higher income group (table 16).25 Since the federal methodology calls for parental

financial contribution from almost all middle income families,26 this finding may suggest either

that some parents are unable to meet the expectations of EFC, or that they choose not to meet

financial expectations, or that students do not ask parents for help.

Seventy-four percent of middle income FTFY dependent undergraduates reported that

their parents contributed directly (e.g., payment made to the institution for housing, meals, or

books) to their price of attendance, more than the percentage reported by the lower income group

(53 percent), and less than the percentage reported by the higher income group (89 percent).

Other sources of support for middle income FTFY dependent undergraduates include parental

allowances and other parental financial support. Thirty percent of middle income FTFY dependent undergraduates reported receiving allowances averaging $1,815; 26 percent reported receiving other parental financial support of less than $1,000 and 44 percent received $1,000 or more

in 1995–96.

The percentage of parents reported to provide any contribution to middle income FTFY

dependent undergraduates’ price of attendance was higher at the highest-price-of-attendance lev-

 

25A student was considered to have any parental contribution if he or she received any one or more of the following:

direct payments to the institution for tuition, housing, meals, or books; allowance; support from parents other than

direct payments for tuition, housing, meals, or books.

26Ninety-nine percent of middle income FTFY dependent undergraduates had an EFC greater than $0, compared

with 70 percent of those in the lower income group. NPSAS:96. Not shown in table.
PAYING FOR COLLEGE

41

els (96 percent) than at the moderate and upper levels (89 and 91 percent respectively).27 More

higher income FTFY dependent undergraduates received parental assistance at the upper and

highest price-of-attendance levels than did those in the middle income group (98 percent and 99

percent compared with 91 percent and 96 percent). More middle income FTFY dependent undergraduates, in turn, received parental support at the moderate, upper and highest price-ofattendance levels than did those in the lower income group (89 percent, 91 percent and 96 percent compared with 79 percent, 77 percent and 88 percent).

Even though students’ earnings28 were similar to net price for middle income FTFY dependent undergraduates attending at the lowest price-of-attendance level (table 13b), 84 percent

reported some parental support. Eighty-nine percent of middle income FTFY dependent undergraduates enrolled at the moderate price-of-attendance level reported receiving contributions to

expenses from their parents, and these students could probably meet the “unknown” contributions of $1,931 through modest amounts of parental contributions (table 13b). Perhaps these students attended at the lowest and moderate price-of-attendance levels in order to reduce but not

eliminate the amount of EFC that their parents needed to contribute, or to increase their available

discretionary income, or both.

For the 49 percent of middle income FTFY dependent undergraduates enrolled at the upper price-of-attendance level (figure 3), their net price was $7,632 (table 13a), and students’ average earnings were $3,419 (table 13b). Ninety-one percent reported some parental contribution

(table 16). With an “unknown” gap of $4,213 (table 13b), and an average total EFC of $6,913

(table 13a) that includes a portion of students’ earnings, it appears that FTFY dependent undergraduates attending at the upper price-of-attendance level can, on average, meet the net price of

attendance through student earnings and a parental component of EFC.

For the 23 percent of middle income FTFY dependent undergraduates enrolled at the

highest price-of-attendance level (figure 3), the gap between the net price of $11,427 (table 13a)

and student earnings of $2,508 (table 13b) was substantial ($8,919). Average earnings for these

middle income FTFY dependent undergraduates were lower than at other price-of-attendance

levels, while the percentage of parents contributing (96 percent, table 16) was higher. Again, the

 

27The difference between the percentages of parents contributing to the price of attendance for FTFY dependent undergraduates from middle income families at the lowest price-of-attendance level and the other price-of-attendance

levels was not statistically significant because of large standard errors.

28The reader is reminded that the student is not expected to contribute all of their earnings to price of attendance.

The actual amount contributed from earnings is not known; some may contribute more, and some may contribute

less.
PAYING FOR COLLEGE

42

actual amounts contributed by parents are not known, but these data suggest that they may be

contributing in amounts that exceed by several thousand dollars the parents’ share of $7,024 EFC

(table 13a).

Table 16.—Among full-time, full-year dependent undergraduates, average net price, percentage who received

contributions or allowance from parents, and percentage distribution according to amount of other type of

support received from parents, by price-of-attendance level and family income: 1995-96

Percent of Percent of Average allowance Percent with other type

parents who parents who per month of support from parents

Net provided helped with Percent Less $1,000

 price for any direct received Amount (if than or

 attendance1 contribution contribution2 allowance received) None $1,000 more

 All

 Total $8,113 89.1 71.2 30.7 $1,934 32.1 25.3 42.6

Family income

 Lower income 5,628 79.4 52.6 24.2 1,520 41.7 25.5 32.8

 Middle income 7,867 91.1 74.4 29.5 1,815 30.4 25.8 43.9

 Higher income 11,462 97.5 89.1 40.5 2,361 22.4 24.5 53.1

 Lowest level

 Total 3,874 82.5 54.0 23.2 1,237 34.2 22.5 43.3

Family income

 Lower income 2,972 75.3 41.5 19.2 1,434 36.8 26.0 37.3

 Middle income 4,581 83.9 55.9 25.7 -- 35.6 17.2 47.2

 Higher income 5,227 98.5 86.1 29.0 -- -- -- --

Moderate level

 Total 5,200 85.8 62.8 26.0 1,744 33.9 26.2 39.8

Family income

 Lower income 4,080 79.0 48.9 22.1 1,329 42.9 29.4 27.7

 Middle income 5,668 88.5 68.0 26.4 1,625 30.4 21.8 47.8

 Higher income 6,603 93.2 79.0 33.0 2,496 23.4 29.1 47.5

 Upper level

 Total 7,460 88.7 70.1 33.7 2,105 32.0 25.1 42.8

Family income

 Lower income 5,558 77.4 49.6 26.1 1,636 43.8 22.8 33.4

 Middle income 7,632 91.1 74.1 31.8 2,004 29.2 28.8 42.0

 Higher income 9,416 97.7 88.2 45.2 2,520 21.6 22.8 55.6
PAYING FOR COLLEGE

43

Table 16.—Among full-time, full-year dependent undergraduates, average net price, percentage who received

contributions or allowance from parents, and percentage distribution according to amount of other type of

support received from parents, by price-of-attendance level and family income: 1995-96—Continued

Percent of Percent of Average allowance Percent with other type

parents who parents who per month of support from parents

Net provided helped with Percent Less $1,000

 price for any direct received Amount (if than or

 attendance1 contribution contribution2 allowance received) None $1,000 more

Highest level

 Total 12,935 95.0 87.0 32.2 1,923 29.8 25.9 44.3

Family income

 Lower income 9,081 87.5 71.6 26.0 1,500 38.1 26.9 35.0

 Middle income 11,427 96.3 89.5 29.3 1,800 30.9 26.1 43.0

 Higher income 17,007 98.8 95.3 39.1 2,202 22.7 25.0 52.3

1

Student budget minus all aid. Net price is the amount of money that students and their families have to come up with during a given year in

order for the student to enroll; this includes zero values. 2

Parents could report making direct contributions to the institutions to pay for tuition, housing, meals, or books.

NOTE: Dependent undergraduates are limited to those who attended only one institution and were U.S. citizens or permanent residents.

--Sample size too small for reliable estimate.

SOURCE: U.S. Department of Education, National Center for Education Statistics, 1995-96 National Postsecondary Student Aid Study

(NPSAS:96), Undergraduate Data Analysis System.

Family Income and Net Price at the Highest Price-of-Attendance Level

It was shown earlier that middle income FTFY dependent undergraduates were less likely

to be enrolled at the highest price-of-attendance level than those in the higher income group.

Table 17a shows total aid and net price of attendance, while table 17b shows the sources of financial aid, student earnings and the “unknown” contribution for FTFY dependent undergraduates from each family income group who were attending at the highest price-of-attendance level.

The $8,919 gap for middle income FTFY dependent undergraduates attending at the highest

price-of-attendance level (table 17b) exceeds their EFC of $7,024 (which includes a portion of

student earnings) by several thousand dollars. Table 17b also shows the gap between student

earnings and net price for lower income and higher income FTFY dependent undergraduates attending at the highest price-of-attendance level in 1995–96. With an “unknown” contribution of

$6,650 for FTFY dependent undergraduates attending from lower income families, students and

their families in this income group must come up with much more than their $2,279 EFC (table

17a) to cover attendance at the highest price-of-attendance level. The “unknown” contribution

of $15,102, after student earnings, for higher income FTFY dependent undergraduates (table

17b) is within their average EFC of $21,663 (table 17a).
PAYING FOR COLLEGE

44

These results suggest that, even with financial aid, students and their families from the

middle income group, as well as those from the lower income group, must access financial resources beyond EFC to cover out-of-pocket expenses for dependent undergraduates enrolled at

the highest price-of-attendance level.

Table 17a.—Average amounts for selected components of price and total aid for full-time, full-year

dependent undergraduates enrolled at the highest price-of-attendance level, by family income:

1995-96

Expected family

contribution (EFC)

Price of at any postsecondary

attendance Total aid Net price* institution

 Total $21,947 $9,013 $12,935 $11,370

 Family income

 Lower income 21,865 12,785 9,081 2,279

 Middle income 21,620 10,193 11,427 7,024

 Higher income 22,293 5,286 17,007 21,663

*Student budget minus all aid.

NOTE: Dependent undergraduates are limited to those who attended only one institution and were U.S. citizens or permanent

residents. All averages reported in this table include zero values.

SOURCE: U.S. Department of Education, National Center for Education Statistics, 1995-96 National Postsecondary Student Aid

Study (NPSAS:96), Undergraduate Data Analysis System.

Table 17b.—Average amounts for selected components of sources of funds for full-time, full-year dependent

undergraduates enrolled at the highest price-of-attendance level, by family income: 1995-96

Aid Net price

 Loan Grant Work-study Other Earnings Unknown

 Total $3,412 $4,883 $407 $310 $2,251 $10,684

 Family income

 Lower income 3,917 7,962 597 309 2,431 6,650

 Middle income 4,009 5,323 495 365 2,508 8,919

 Higher income 2,530 2,299 193 263 1,905 15,102

NOTE: Dependent undergraduates are limited to those who attended only one institution and were U.S. citizens or permanent

residents. All averages reported in this table include zero values.

SOURCE: U.S. Department of Education, National Center for Education Statistics, 1995-96 National Postsecondary Student Aid

Study (NPSAS:96), Undergraduate Data Analysis System.
45

TYPES AND SOURCES OF FINANCIAL AID

It was shown earlier that almost four out of every five (79 percent) middle income fulltime, full-year (FTFY) dependent undergraduates were determined to have had financial need in

1995–96 (figure 4), and that most (91 percent) of those with need who applied for financial aid

received some help. Figure 4 also showed that more than one-half (57 percent) of middle income FTFY dependent undergraduates with no financial need applied for aid, and that 78 percent

of that group received aid. Overall, 64 percent of middle income FTFY dependent undergraduates received some financial aid in 1995–96 (table 18). What were the types and sources of this

financial aid? Did the sources and types of aid differ for those with financial need compared

with those with no financial need? Did aid differ depending on the price-of-attendance level?

Were the types and sources of aid different for the three income groups of FTFY dependent undergraduates? And, was borrowing behavior related to net price?

Fifty-two percent of middle income FTFY dependent undergraduates with need received

grants in 1995–96 and 50 percent received loans (figure 5, table 18). Financial aid covered 35

percent of the price of attendance for middle income FTFY dependent undergraduates with financial need. Loans constituted 42 percent of total aid for middle income FTFY dependent undergraduates with need, while grants constituted 44 percent. Work-study and other types of aid

provided the remaining aid.

 The percentage of middle income FTFY dependent undergraduates with need who received grants (52 percent) was smaller than among the lower income group (77 percent), but

more than among higher income FTFY dependent undergraduates with need (44 percent). The

percentages of FTFY dependent undergraduates with need who received loans were not significantly different among the three income groups.

Forty-four percent of middle income FTFY dependent undergraduates with no financial

need actually received some financial aid, with 24 percent receiving grants and 24 percent receiving loans. A smaller percentage of higher income FTFY dependent undergraduates with no

financial need received aid (34 percent) although the percentage with grants or loans was about

the same as the middle income group. Because of the small size of the lower income group with
TYPES AND SOURCES OF FINANCIAL AID

46

no financial need, there was no significant difference between the percentage of middle income

FTFY dependent undergraduates and the lower income group receiving any aid, loans, or grants.

Table 18.—Percentage distribution of full-time, full-year dependent undergraduates according to aid receipt

status, type of aid received, and ratio of aid to total aid by type of aid, and price of attendance, by

financial need status and family income: 1995-96

Type of aid

Ratio Ratio Ratio

Aid receipt status of loans of grant of work- Ratio

Did not to aid to study to of total aid

 Received receive total total Work- total Other to price of

 aid aid Loans aid* Grants aid* study aid* aid type attendance*

All

 Total 64.5 35.5 41.0 36.1 51.2 52.2 12.7 3.5 3.8 33.5

Family income

 Lower income 82.0 18.0 49.7 30.3 76.1 62.2 17.6 3.1 5.0 49.0

 Middle income 64.2 35.8 44.3 42.8 46.1 44.2 13.0 3.6 3.6 31.2

 Higher income 43.6 56.4 26.0 36.8 27.5 45.0 6.3 4.2 2.7 17.8

Financial need

 Total 75.0 25.0 49.4 35.5 62.7 53.4 16.7 3.6 4.4 41.1

Family income

 Lower income 82.6 17.4 50.0 30.0 77.0 62.5 17.8 3.1 5.0 49.5

 Middle income 69.6 30.4 50.0 42.2 52.0 44.0 16.2 4.0 3.8 35.4

 Higher income 64.0 36.0 45.3 38.3 44.2 43.0 14.1 4.3 3.8 28.9

No financial need

 Total 36.9 63.1 18.8 39.5 20.7 45.7 2.2 3.1 2.4 13.4

Family income

 Lower income 45.3 54.7 33.0 59.2 17.1 23.4 2.4 0.7 4.0 19.1

 Middle income 44.2 55.8 23.6 45.9 24.4 45.2 1.5 1.4 2.7 15.8

 Higher income 33.6 66.4 16.4 35.3 19.3 46.8 2.4 4.1 2.2 12.3

*Ratios include zero values.

NOTE: Dependent undergraduates are limited to those who attended only one institution and were U.S. citizens or permanent

residents.

SOURCE: U.S. Department of Education, National Center for Education Statistics, 1995-96 National Postsecondary Student Aid

Study (NPSAS:96), Undergraduate Data Analysis System.
TYPES AND SOURCES OF FINANCIAL AID

47

Figure 5.—Percentage of full-time, full-year dependent undergraduates from middle income families

receiving aid according to financial aid status, by type of aid: 1995-96

NOTE: Dependent undergraduates are limited to those who attended only one institution and were U.S. citizens or permanent

residents. Financial need is the difference between expected family contribution and price of attendance.

SOURCE: U.S. Department of Education, National Center for Education Statistics, 1995-96 National Postsecondary Student Aid

Study (NPSAS:96), Undergraduate Data Analysis System.

The next sections provide information about the types of grants received and examine

different patterns of grant aid at different price-of-attendance levels.























4 

16 

50 

52 

70 

3 

2 

24 

24 

44 

0.0 10.0 20.0 30.0 40.0 50.0 60.0 70.0 80.0 

Other aid 

Work-study 

Loans 

Grant aid 

Any aid 

Percent 



 No financial need Financial need 

Type of aid
TYPES AND SOURCES OF FINANCIAL AID

48

GRANTS

Forty-six percent of middle income FTFY dependent undergraduates in 1995–96 received

grants (table 18), with an average award of $4,065 (table 20). Table 19 shows the percentage of

FTFY dependent undergraduates receiving federal, state, institutional, or other grant aid, by financial need status and income group. For those with financial need, approximately one-third

(35 percent) received institutional grants, with no differences among the three income groups.

For middle income FTFY dependent undergraduates with financial need, as well as those in the

higher income group, institutional aid was the most common source of grant aid (36 percent and

37 percent respectively). Twenty percent of middle income FTFY dependent undergraduates

with financial need received state grants. While approximately one-third (35 percent) of lower

income FTFY dependent undergraduates with need also received institutional grants, the percentage receiving federal grant aid was 61 percent. Institutional grants averaged $4,483 for those

with financial need who received them, with no differences among income groups (table 20).

Among FTFY dependent undergraduates with no financial need, thirteen percent received

institutional grants, and there were no statistically significant differences among the three income

groups in the percent receiving these grants (table 19).29 Institutional grants to higher income

FTFY dependent undergraduates with no financial need were larger than grants to those in the

middle income group ($2,877 compared with $1,479) (table 20).

Table 19.—Percentage of full-time, full-year dependent undergraduates receiving grant aid according to

source of grant, by financial need status and family income: 1995-96

Total Federal State Institutional Other

grant aid grant aid grant aid grant aid grant aid

All

 Total 51.2 23.2 18.6 29.1 10.8

Family income

 Lower income 76.1 59.7 31.5 34.1 11.7

 Middle income 46.1 6.6 16.9 31.1 12.0

 Higher income 27.5 0.4 6.2 20.4 8.3

 

29The reader is reminded that only two percent of lower income FTFY dependent undergraduates had no financial

need. For those in the middle and higher income groups, the percentages are 21 and 67, respectively. The small

percentage of lower income FTFY dependent undergraduates with no financial need is associated with a relatively

large standard error; therefore, achieving statistically significant differences for this group is unlikely.
TYPES AND SOURCES OF FINANCIAL AID

49

Table 19.—Percentage of full-time, full-year dependent undergraduates receiving grant aid according to

source of grant, by financial need status and family income: 1995-96—Continued

Total Federal State Institutional Other

grant aid grant aid grant aid grant aid grant aid

Financial need

 Total 62.7 31.8 24.0 35.3 12.3

Family income

 Lower income 77.0 60.6 32.0 34.5 11.7

 Middle income 52.0 8.3 19.9 35.8 12.8

 Higher income 44.2 0.7 7.5 37.1 12.9

 No financial need 

 Total 20.7 0.3 4.4 12.5 7.0

Family income

 Lower income 17.1 0.0 2.7 7.2 9.8

 Middle income 24.4 0.3 5.7 14.0 9.0

 Higher income 19.3 0.3 4.0 12.0 6.1

NOTE: Dependent undergraduates are limited to those who attended only one institution and were U.S. citizens or permanent

residents. Percentages do not sum to 100 because undergraduates may receive more than one type of grant.

SOURCE: U.S. Department of Education, National Center for Education Statistics, 1995-96 National Postsecondary Student Aid

Study (NPSAS:96), Undergraduate Data Analysis System.

Table 20.—Average grant amount awarded to full-time, full-year dependent undergraduates receiving grant

aid according to source of grant, by financial need status and family income: 1995-96

Total Federal State Institutional Other

grant aid grant aid grant aid grant aid grant aid

All

 Total $4,357 $1,999 $1,887 $4,240 $1,688

Family income

 Lower income 4,678 2,094 2,092 4,246 1,751

 Middle income 4,065 1,216 1,602 4,283 1,594

 Higher income 3,917 -- 1,579 4,144 1,757

 Financial need

 Total 4,608 2,000 1,904 4,483 1,729

Family income

 Lower income 4,684 2,094 2,092 4,248 1,751

 Middle income 4,368 1,213 1,613 4,583 1,643

 Higher income 5,007 -- 1,412 4,974 1,922
TYPES AND SOURCES OF FINANCIAL AID

50

Table 20.—Average grant amount awarded to full-time, full-year dependent undergraduates receiving grant

aid according to source of grant, by financial need status and family income: 1995-96—Continued

Total Federal State Institutional Other

grant aid grant aid grant aid grant aid grant aid

 No financial need 

 Total 2,345 1,501 1,638 2,430 1,495

Family income

 Lower income -- -- -- -- --

 Middle income 1,700 -- 1,460 1,479 1,338

 Higher income 2,677 -- 1,736 2,877 1,582

--Sample size too small for reliable estimate.

NOTE: Dependent undergraduates are limited to those who attended only one institution and were U.S. citizens or permanent

residents.

SOURCE: U.S. Department of Education, National Center for Education Statistics, 1995-96 National Postsecondary Student Aid

Study (NPSAS:96), Undergraduate Data Analysis System.

INSTITUTIONAL GRANTS AND PRICE OF ATTENDANCE

Table 19 showed that, in aggregate, the likelihood of FTFY dependent undergraduates

with need receiving institutional grants did not differ significantly by family income group. Figures 6 and 7 show the percentages of FTFY dependent undergraduates, by income level and financial need status, who received institutional grants in each of the price-of-attendance levels.

FTFY Dependent Undergraduates with Financial Need

In each income category, larger percentages of FTFY dependent undergraduates with financial need received institutional grants if they were enrolled at the highest price-of-attendance

level (figure 6). Two-thirds (66 percent) of middle income students with need who were enrolled

at the highest price-of-attendance level received institutional grants, a percentage that was about

the same as those with need in the lower income group, but larger than the 46 percent of those

with need in the higher income group who received institutional grants. About one-quarter (27

percent) of all FTFY dependent undergraduates who enrolled at the upper price-of-attendance

level received institutional grants, with about the same percentage of those in the middle income

group as those in the lower income and higher income groups receiving awards. About one in

five lower income and middle income FTFY dependent undergraduates attending at the lowest
TYPES AND SOURCES OF FINANCIAL AID

51

and moderate price-of-attendance levels received institutional grants (21 and 20 percent, and 17

and 20 percent respectively).

Middle income FTFY dependent undergraduates with need who were enrolled at the

highest price-of-attendance level, received institutional grants averaging $6,516. This was about

the same as the average award to those in the lower income group, but was more than the average $5,504 awarded to those in the higher income group.

FTFY Dependent Undergraduates with No Financial Need

Institutional grants also were awarded to FTFY dependent undergraduates who had not

demonstrated need for federal financial aid. Since institutions may use an alternative methodology to assess students’ financial need for privately-funded financial aid, these institutional grants

may have been based on an alternate calculation of need.30

Nineteen percent of middle income FTFY dependent undergraduates with no demonstrated need for federal financial aid who were enrolled at the lowest price-of-attendance level

received institutional grants, as did 14 percent of those at the moderate price-of-attendance level

and 10 percent of those at the upper price-of-attendance level (figure 7). Since nearly all middle

income, as well as lower income FTFY dependent undergraduates enrolled at the highest priceof-attendance level had financial need (99 percent and 98 percent respectively, see table 10), 93

percent of institutional grants to those without financial need who were attending at the highest

price-of-attendance level went to higher income students.31

 

30Little (2000) relates that colleges and universities may use a College Board-designed formula known as the Institutional Methodology (IM) to assess financial need for privately-funded financial aid programs. The IM differs from

the Federal Methodology (FM) used to determine eligibility for federal and most state-funded financial assistance,

so undergraduates who are categorized as having no financial need using FM, may have financial need using the IM.

Heller & Laird (1999) found, in a study using NPSAS:90 and NPSAS:96, the number of high-income students who

received need-based institutional grants grew more than twice as fast (98 percent compared with 46 percent) as that

of middle income students between 1989 and 1995, and almost four times that of low income students (26 percent)

(pg. 12). This suggests that institutions were beginning to extend their need-based awards up the income ladder.

Furthermore, the number of non-need grants to high-income recipients increased 16 percent but decreased for low

and middle income students (19 percent and 12 percent respectively.)

31Not shown in table; U.S. Department of Education, National Center for Education Statistics, 1995–96 National

Postsecondary Student Aid Study (NPSAS:96), Undergraduate Data Analysis System.
TYPES AND SOURCES OF FINANCIAL AID

52

Summary

There were no significant differences by family-income level in the percentages of FTFY

dependent undergraduates with need who received institutional grants, or in the average institutional awards that were given. In each income category, larger percentages of FTFY dependent

undergraduates with need received institutional grants if they were enrolled at the highest price

of attendance. At the highest price-of-attendance level, 66 percent of middle income FTFY dependent undergraduates with need received institutional grants, a higher percentage than the 46

percent in the higher income group, who also received a lower average award (figure 6).

Figure 6.—Percentage of full-time, full-year dependent undergraduates with financial need receiving

institutional grant aid, and average amount of institutional grant aid for those receiving

institutional grant aid, by price-of-attendance level and family income: 1995-96

NOTE: Dependent undergraduates are those who attended only one institution and were citizens or permanent residents. Financial need is the difference between expected family contribution and price of attendance.

--Sample size too small for reliable estimate.

SOURCE: U.S. Department of Education, National Center for Education Statistics, 1995-96 National Postsecondary Student Aid

Study (NPSAS:96), Undergraduate Data Analysis System.

Price of attendance 





































46

66

68

61

22

25

31

27

20

20

20

17

21

19

- 10.0 20.0 30.0 40.0 50.0 60.0 70.0 80.0

Higher income

Middle income

Lower income 

All

Percent

Average institutional grant amount

$657

1,461

2,669

6,623

659

1,530

2,603

7,434

--

1,311

2,747

6,516

--

--

2,692

5,504

Lowest level Moderate level Upper level Highest level 











Family income 
TYPES AND SOURCES OF FINANCIAL AID

53

Figure 7.—Percentage of full-time, full-year dependent undergraduates with no financial need receiving

institutional grant aid, and average amount of institutional grant aid for those receiving

institutional grant aid, by price-of-attendance level and family income: 1995-96

--Sample size too small for reliable estimate.

 NOTE: Dependent undergraduates are limited to those who attended only one institution and were U.S. citizens or permanent

residents. Financial need is the difference between expected family contribution and price of attendance.

SOURCE: U.S. Department of Education, National Center for Education Statistics, 1995-96 National Postsecondary Student Aid

Study (NPSAS:96), Undergraduate Data Analysis System.

LOANS

Forty-four percent of all middle income FTFY dependent undergraduates received loans

in 1995–96, with an average loan amount of $3,930 (tables 21, 22). The 44 percent borrowing

rate was lower than the 50 percent of all lower income FTFY dependent undergraduates who

borrowed, while the average amount of loans was not significantly different for middle income

and lower income families.

One-half of middle income FTFY dependent undergraduates with financial need received

student loans in 1995–96, which was about the same as those in the lower income group, but

more than the percentage borrowing in the higher income group (44 percent, table 21). Forty-six

percent of middle income FTFY dependent undergraduates with need used subsidized student

loans and 12 percent used unsubsidized student loans. Since eligibility for federal subsidized

Price of attendance 































10 

15 

14 

23 

10 

8 

8 

19 

23 

10 

11 

14 

- 10.0 20.0 30.0 40.0 50.0 60.0 70.0 80.0 

Higher income 

Middle income 

Lower income 

All 

Percent 





Highest level 



Upper level  Lowest level



Moderate level

Average institutional grant amount Family income 

$683 

1,687 

2,216 

4,206 

-- 

-- 

-- 

-- 

-- 

1,589 

1,935 

--

-- 

1,834 

2,265 

4,293 
TYPES AND SOURCES OF FINANCIAL AID

54

loans is income-related, a smaller percentage of students from higher income families used subsidized loans (34 percent) than those in the middle income group, and a larger percentage used

unsubsidized loans (17 percent). The parents of 10 percent of middle income FTFY dependent

undergraduates with financial need used PLUS loans. Middle income FTFY dependent undergraduates with financial need borrowed $4,033, on the average, which was about the same as the

average total student loans of those in the lower income and higher income groups (table 22).

Almost one-quarter (23 percent) of middle income FTFY dependent undergraduates with

no financial need received student loans, a percentage that was not statistically different from the

30 percent of lower income FTFY dependent undergraduates without financial need who had

student loans (table 21). A smaller percentage (16 percent) of those with no need in the higher

income group used student loans.

Within price-of-attendance levels, 7 percent of middle income FTFY dependent undergraduates with financial need attending at the lowest price-of-attendance level used student

loans, as did one-third (34 percent) of those enrolled at the moderate price-of-attendance level of

attendance, about one-half (49 percent) of those enrolled at the upper price-of-attendance level

and almost two-thirds (64 percent) of those attending at the highest price-of-attendance level

(figure 8). Average loans for middle income FTFY dependent undergraduates with need ranged

from $3,109 for those attending at the moderate price-of-attendance level, to $4,507 for those

enrolled at the highest price-of-attendance level. A larger percentage of middle income FTFY

dependent undergraduates with financial need borrowed at the highest price-of-attendance level

than did higher income students. At the upper price-of-attendance level, a larger percentage of

lower income FTFY dependent undergraduates with need borrowed than those in the middle income group.
TYPES AND SOURCES OF FINANCIAL AID

55

Table 21.—Percentage of full-time, full-year dependent undergraduates receiving loans according to type of

loan, by financial need status and family income: 1995-96

Subsidized Stafford PLUS

 Total student unsubsidized unsubsidized

 student loans loans student loans loans*

All

 Total 40.6 32.6 12.0 6.6

Family income

 Lower income 49.6 45.7 6.3 4.4

 Middle income 43.9 36.4 14.5 8.4

 Higher income 25.2 11.9 15.8 6.9

 Financial need

 Total 49.0 44.6 10.0 7.7

Family income

 Lower income 49.9 46.4 6.0 4.3

 Middle income 49.6 45.9 12.4 10.1

 Higher income 44.1 34.1 17.2 12.3

 No financial need

 Total 18.2 0.9 17.4 3.6

Family income

 Lower income 30.2 0.1 30.2 4.7

 Middle income 23.3 1.2 22.1 2.4

 Higher income 15.8 0.8 15.1 4.2

*PLUS loans are unsubsidized variable-interest rate loans awarded to parents of dependent students who are able to meet

criteria for credit worthiness. PLUS loans are awarded up to the maximum amount of the cost of attendance at the institution

minus any other financial aid.

NOTE: Dependent undergraduates are limited to those who attended only one institution and were U.S. citizens or permanent

residents.

SOURCE: U.S. Department of Education, National Center for Education Statistics, 1995-96 National Postsecondary Student Aid

Study (NPSAS:96), Undergraduate Data Analysis System.
TYPES AND SOURCES OF FINANCIAL AID

56

Table 22.—Average loan amount received by full-time, full-year dependent undergraduates who received

loans according to type of loan, by financial need status and family income: 1995-96

Subsidized Stafford PLUS

 Total student unsubsidized unsubsidized

 student loans loans student loans loans*

 All

 Total $3,936 $3,548 $2,911 $6,355

Family income

 Lower income 3,921 3,678 2,560 4,936

 Middle income 3,930 3,478 2,658 5,968

 Higher income 3,986 3,221 3,387 8,076

Financial need

 Total 3,986 3,561 2,542 6,184

Family income

 Lower income 3,913 3,678 2,393 4,839

 Middle income 4,033 3,496 2,444 6,040

 Higher income 4,122 3,261 2,952 8,270

 No financial need

 Total 3,579 1,887 3,471 7,308

Family income

 Lower income -- -- -- --

 Middle income 3,122 -- 3,099 4,833

 Higher income 3,798 -- 3,632 7,791

*PLUS loans are unsubsidized variable-interest rate loans awarded to parents of dependent students who are able to meet

criteria for credit worthiness. PLUS loans are awarded up to the maximum amount of the cost of attendance at the institution

minus any other financial aid.

--Sample size too small for reliable estimate.

NOTE: Dependent undergraduates are limited to those who attended only one institution and were U.S. citizens or permanent

residents.

SOURCE: U.S. Department of Education, National Center for Education Statistics, 1995-96 National Postsecondary Student Aid

Study (NPSAS:96), Undergraduate Data Analysis System.
TYPES AND SOURCES OF FINANCIAL AID

57

Figure 8.—Percentage of full-time, full-year dependent undergraduates with financial need receiving loans,

and average loan amount for those receiving loans, by price-of-attendance level and family

income: 1995-96

--Sample size too small for reliable estimate.

NOTE: Dependent undergraduates are limited to those who attended only one institution and were U.S. citizens or permanent

residents. Financial need is the difference between expected family contribution and price of attendance.

SOURCE: U.S. Department of Education, National Center for Education Statistics, 1995-96 National Postsecondary Student Aid

Study (NPSAS:96), Undergraduate Data Analysis System.









































0.0 10.0 20.0 30.0 40.0 50.0 60.0 70.0 80.0

Higher income

Middle income

Lower income

All

Family income

Percent

Upper level Highest level



 Moderate level



 Lowest level

Average loan amount

$2,086

2,914

3,902

4,546

--

2,806

3,897

4,749

--

3,109

3,900

4,507

--

--

3,944

4,276

11

34

53

61

11

35

58

70

7

34

49

64

44

45




58

SUMMARY AND CONCLUSION

The need for financial aid or other financial help, such as tuition tax credits to assist students from middle income families to attend the college of their choice, has received increased

attention recently. This report examined the enrollment of middle income students by price of

attendance and how they and their families pay for college, including the role of financial aid.

Comparisons were made to those in the lower income group and those in the higher income

group.

Almost one-half (49 percent) of middle income FTFY dependent undergraduates were

enrolled at the upper price-of-attendance level in 1995–96, with the rest divided mostly among

the moderate price-of-attendance level (21 percent) and the highest price-of-attendance level (23

percent). Eight percent were enrolled at the lowest price-of-attendance level. This was about the

same as the enrollment distribution of FTFY dependent undergraduates in the lower income

group. Smaller percentages of each of these two income groups were enrolled at the highest

price-of-attendance level of $16,000 and above compared with those from higher income families, where 34 percent were enrolled at the highest price-of-attendance level.

It was those middle income FTFY dependent undergraduates with mid-range combined

SAT scores of 825-1,199 who were less likely to be enrolled at the highest price-of-attendance

level than were those with similar SAT scores in the higher income group. The distribution of

lower income and middle income FTFY dependent undergraduates at each SAT-score level and

price-of-attendance level was about the same. About one-half of those with SAT scores of 1,200

or more in each income group was enrolled at the highest price-of-attendance level.

Four out of five (79 percent) middle income FTFY dependent undergraduates had some

demonstrated need for federal financial aid, compared with almost all of those in the lower income category (99 percent), and one-third of those in the higher income category. Overall, middle income FTFY dependent undergraduates had 31 percent of their price of attendance covered

by financial aid, and more than one-half (58 percent) had unmet need after financial aid and

EFC. Thirty-two percent of middle income FTFY dependent undergraduates with unmet need

did not apply for financial aid. Reasons given included a belief that family income was too high

(32 percent), or that the family or student could afford to pay (48 percent). For families who did
SUMMARY AND CONCLUSION

59

apply but did not have their financial need met, it could mean that they are making great financial effort to attend their institution of choice.

Net price, or the difference between price of attendance and total financial aid, is the

amount of out-of-pocket expenses that students must come up with to attend the colleges in

which they enroll. Net price increased at each higher price-of-attendance level. The percentage

of middle income FTFY dependent undergraduates who reported that their parents contributed to

their college expenses was higher for those attending at the highest price-of-attendance level than

for those enrolled at the moderate and upper price-of-attendance levels. Average student earnings were lower for those in the middle income group enrolled at the highest-price-of-attendance

level than at other price-of-attendance levels.

It appears that middle income FTFY dependent undergraduates enrolled at the lowest and

moderate price-of-attendance levels could cover much of the out-of-pocket expenses of their attendance from their own earnings, and that parents were able to contribute considerably less than

would be expected using EFC. For the 49 percent of middle income FTFY dependent undergraduates enrolled at the upper price-of-attendance level, the results suggest a combination of

student earnings and a parent contribution could meet the net price.

Net price minus student earnings was $8,919 for middle income FTFY dependent undergraduates enrolled at the highest price-of-attendance level, while average EFC was $7,024. This

out-of-pocket expense gap may explain some of the difference in enrollment patterns of middle

income and higher income FTFY dependent undergraduates with mid-range SAT scores. Another reason may be that institutions in the highest price-of-attendance level may not practice

need-blind admissions, but balance applicants’ academic strengths with their financial aid needs,

resulting in the admission of fewer applicants with mid-range scores who have more financial

need.

One-half (50 percent) of middle income full-time, full-year dependent undergraduates

with financial need received loans, accounting for 42 percent of their aid, while 52 percent received grants, accounting for 44 percent of their aid, with work-study aid and other types of aid

providing the remaining aid.

Institutional grants made up the most common source of grant aid for middle income

FTFY dependent undergraduates, as well as for those in the higher income group. Overall, the

percentages of FTFY dependent undergraduates with need who received institutional grants, and

the average institutional awards that were given were about the same for each family-income
SUMMARY AND CONCLUSION

60

level. About two-thirds of those with need in the lower and middle income groups received institutional grants at the highest price-of-attendance level compared with 46 percent of those in

the higher income group. The average institutional grant was smaller for those in the higher income group than in the middle income group. This source of support was an important component of financial aid packages that assisted in providing access at the highest price-of-attendance

level.

Overall, middle income FTFY dependent undergraduates with need in 1995–96 borrowed

at rates and amounts that were about the same as those with need in the lower income group.

More middle income FTFY dependent undergraduates with financial need borrowed than did

those in the higher income group. Borrowing rates for middle income FTFY dependent undergraduates increased with higher prices of attendance. At the upper price-of-attendance level,

more lower income FTFY dependent undergraduates with financial need borrowed than did

those in the middle income group, while at the highest price-of-attendance level, more from the

middle income group borrowed than did those from the higher income group. The percentages

borrowing for those with no financial need also were not significantly different between middle

income and lower income FTFY dependent undergraduates, but were higher than the percentage

borrowing in the higher income group.

Lower income and middle income FTFY dependent undergraduates have similar price of

attendance enrollment patterns. Those from the lower income group use more financial aid than

do those in the middle income group. Lower income and middle income FTFY dependent students do not enroll at similar price-of-attendance levels as their counterparts in the higher income

group, with the exception of those undergraduates with SAT scores of 1,200 or more.
61

REFERENCES

Choy, S. P. Low-Income Students: Who They Are and How They Pay for Their Education,

NCES 2000-169. (Washington, DC: U.S. Department of Education, National Center for

Education Statistics, 2000).

Choy, S. P. How Low-Income Undergraduates Financed Postsecondary Education: 1992-93,

NCES 96-161. (Washington, DC: U.S. Department of Education, National Center for

Education Statistics, 1996).

Hearn, J. C. “The Relative Roles of Academic, Ascribed, and Socioeconomic Characteristics in

College Destinations,” Sociology of Education, v. 57, no. 1. (January 1984), pp. 22-30.

Hearn, J. C. “Attendance at Higher-Cost Colleges: Ascribed, Socioeconomic, and Academic Influences on Student Enrollment Patterns,” Economics of Education Review, v. 7, no.1.

(1988), pp. 65-75.

Heller, Donald E. and Laird, Thomas F. Nelson. “Institutional Need-Based and Non-Need

Grants: Trends and Differences Among College and University Sectors,” Journal of Student Financial Aid, v. 29, no. 3. (1999), pp. 7-24.

Hossler, D., Braxton, J., & Coopersmith, G. “Understanding Student College Choice,” Higher

Education Handbook of Theory and Research, V. J. C. Smart (ed.). (New York:

Agathon Press, 1989), pp. 231-288.

Institute for Higher Education Policy (The). State of Diffusion: Defining Student Aid in an Era

of Multiple Purposes. (Washington, D.C.: author, August 1999).

King, J. E. (ed.). Financing a College Education. How It Works, How It’s Changing. (Phoenix,

AZ: American Council on Education/Oryx Press, 1999).

Little, K. “Changes in Financial Aid Formula May Benefit Middle Income Families,” News

from the College Board. (January 19, 2000). Available:

www.collegeboard.org/press/html9900/html00119.html.

McPherson, M. S. Testimonial in the American Association of Universities’ Council on Federal

Regulations (CFR) Reports on Hearings & Markups for the week of February 7-11, 2000:

Hearing on The Rising Cost of College Tuition and the Effectiveness of Government Fi-
REFERENCES

62

nancial Aid, Senate Governmental Affairs (February 9, 2000). Available:

http://www.tulane.edu/~aau/CFR2.11.00.html.

McPherson, M. S. and Schapiro, M. O. The Student Aid Game. Meeting Need and Rewarding

Talent in American Higher Education. (Princeton, NJ: Princeton University Press, 1998).

Riccobono, J. A., Whitmore, R. W., Gable, T. J., Traccarella, M. A., Pratt, D. J., Berkner, L. K.

National Postsecondary Student Aid Study, 1995-96 (NPSAS:96), Methodology Report,

NCES 98-073. (Washington, DC: U.S. Department of Education, National Center for

Education Statistics, 1997).

U. S. Department of Education, 1999-2000 Student Financial Aid Handbook. Available:

http://ifap.ed.gov/dev_csb/new/fsfabk.nsf/90CE956770FEDA9E852567AC006BD69B?

OpenView&Start=1&Count=30.
63

APPENDIX A: SUPPLEMENTAL TABLES

Table A1.—Percentage of full-time, full-year dependent undergraduates with financial need receiving grant

aid according to source of grant, by price-of-attendance level and family income: 1995-96

Total Federal State Institutional Other

grant aid grant aid grant aid grant aid grant aid

All

 Total 62.9 31.9 24.2 35.5 12.3

Family income

 Lower income 77.1 60.6 32.1 34.6 11.8

 Middle income 52.1 8.3 20.1 35.8 12.8

 Higher income 44.2 0.7 7.9 37.6 12.4

Lowest level

 Total 70.8 57.1 22.3 19.2 8.5

Family income

 Lower income 80.9 72.4 23.1 20.5 9.3

 Middle income 44.1 12.7 21.9 16.5 6.8

 Higher income -- -- -- -- -- 

 Moderate level

 Total 59.7 42.1 23.6 20.1 7.0

Family income

 Lower income 72.4 61.5 29.7 20.3 6.7

 Middle income 38.5 9.4 13.4 19.9 7.3

 Higher income -- -- -- -- --

 Upper level

 Total 58.4 30.8 24.5 27.3 12.0

Family income

 Lower income 76.3 59.0 33.7 30.6 12.5

 Middle income 45.0 7.5 18.2 25.0 11.8

 Higher income 32.5 0.7 7.3 21.5 11.0
APPENDIX A: SUPPLEMENTAL TABLES

64

Table A1.—Percentage of full-time, full-year dependent undergraduates with financial need receiving grant

aid according to source of grant, by price-of-attendance level and family income: 1995-96—Continued

Total Federal State Institutional Other

grant aid grant aid grant aid grant aid grant aid

 Highest level

 Total 69.8 21.8 24.4 61.1 16.6

Family income

 Lower income 82.7 57.0 36.1 68.3 17.4

 Middle income 73.4 8.7 26.8 66.4 18.4

 Higher income 50.7 0.7 8.4 45.9 13.3

--Sample size too small for reliable estimate.

NOTE: Dependent undergraduates are limited to those who attended only one institution and were U.S. citizens or permanent

residents.

SOURCE: U.S. Department of Education, National Center for Education Statistics, 1995-96 National Postsecondary Student Aid

Study (NPSAS:96), Undergraduate Data Analysis System.
APPENDIX A: SUPPLEMENTAL TABLES

65

Table A2.—Average grant amount awarded to full-time, full-year dependent undergraduates with financial

need receiving grant aid according to source of grant, by price-of-attendance level and family

income: 1995-96

Total Federal State Institutional Other

grant aid grant aid grant aid grant aid grant aid

All

 Total $4,608 $2,000 $1,904 $4,483 $1,729

Family income

 Lower income 4,684 2,094 2,092 4,248 1,751

 Middle income 4,368 1,213 1,613 4,583 1,643

 Higher income 5,007 -- 1,412 4,974 1,923

Lowest level

 Total 2,095 1,838 1,105 657 730

Family income

 Lower income 2,256 1,890 1,092 659 --

 Middle income 1,140 -- -- -- --

 Higher income -- -- -- -- --

 Moderate level

 Total 2,452 1,935 1,200 1,461 1,073

Family income

 Lower income 2,718 1,996 1,233 1,530 986

 Middle income 1,580 1,215 1,078 1,311 1,174

 Higher income -- -- -- -- --

 Upper level

 Total 3,356 1,889 2,001 2,669 1,371

Family income

 Lower income 3,828 1,998 2,245 2,603 1,521

 Middle income 2,646 1,023 1,547 2,747 1,226

 Higher income 2,603 -- 1,872 2,692 1,291
APPENDIX A: SUPPLEMENTAL TABLES

66

Table A2.—Average grant amount awarded to full-time, full-year dependent undergraduates with financial

need receiving grant aid according to source of grant, by price-of-attendance level and family

income: 1995-96—Continued

Total Federal State Institutional Other

grant aid grant aid grant aid grant aid grant aid

 Highest level

 Total 7,941 2,419 2,329 6,623 2,424

Family income

 Lower income 9,793 2,586 2,946 7,434 2,750

 Middle income 7,343 1,570 1,891 6,516 2,289

 Higher income 5,787 -- 1,248 5,504 2,210

--Sample size too small for reliable estimate.

NOTE: Dependent undergraduates are those who attended only one institution and were citizens or permanent residents.

SOURCE: U.S. Department of Education, National Center for Education Statistics, 1995-96 National Postsecondary Student Aid

Study (NPSAS:96), Undergraduate Data Analysis System.
APPENDIX A: SUPPLEMENTAL TABLES

67

Table A3.—Percentage of full-time, full-year dependent undergraduates with no financial need receiving

grant aid according to source of grant, by price-of-attendance level and family income: 1995-96

Total Federal State Institutional Other

grant aid grant aid grant aid grant aid grant aid

 All

 Total 20.7 0.3 4.4 12.5 7.0

 

 Family income 

 Lower income 17.1 0.0 2.7 7.2 9.8

 Middle income 24.4 0.3 5.7 14.0 9.0

 Higher income 19.3 0.3 4.0 12.0 6.1

 Lowest level

 Total 24.3 0.0 6.6 13.9 6.4

 

 Family income 

 Lower income -- -- -- -- --

 Middle income 33.9 0.0 8.2 19.1 11.0

 Higher income 13.0 0.0 5.1 7.9 0.0

Moderate level

 Total 19.8 0.4 5.3 10.5 6.6

 

 Family income 

 Lower income -- -- -- -- --

 Middle income 23.2 0.9 4.6 14.0 7.8

 Higher income 16.8 0.0 5.7 7.8 5.6

 

 Upper level

 Total 17.9 0.2 3.7 10.4 6.7

 

 Family income 

 Lower income 28.2 0.0 0.8 14.6 17.5

 Middle income 19.3 0.0 5.0 10.3 8.9

 Higher income 17.3 0.3 3.3 10.4 5.9

 
APPENDIX A: SUPPLEMENTAL TABLES

68

Table A3.—Percentage of full-time, full-year dependent undergraduates with no financial need receiving

grant aid according to source of grant, by price-of-attendance level and family income:

1995-96—Continued

Total Federal State Institutional Other

grant aid grant aid grant aid grant aid grant aid

 Highest level

 Total 30.4 0.7 4.2 23.1 9.0

 

 Family income 

 Lower income -- -- -- -- --

 Middle income -- -- -- -- --

 Higher income 29.8 0.7 3.9 22.9 8.8

--Sample size too small for reliable estimate.

NOTE: Dependent undergraduates are limited to those who attended only one institution and were U.S. citizens or permanent

residents.

SOURCE: U.S. Department of Education, National Center for Education Statistics, 1995-96 National Postsecondary Student Aid

Study (NPSAS:96), Undergraduate Data Analysis System.
APPENDIX A: SUPPLEMENTAL TABLES

69

Table A4.—Average grant amount awarded to full-time, full-year dependent undergraduates with no

financial need receiving grant aid according to source of grant, by price-of-attendance level and

family income: 1995-96

Total Federal State Institutional Other

grant aid grant aid grant aid grant aid grant aid

All

 Total $2,345 $1,501 $1,638 $2,430 $1,495

Family income

 Lower income -- -- -- -- --

 Middle income 1,700 -- 1,460 1,479 1,338

 Higher income 2,677 -- 1,736 2,877 1,582

Lowest level

 Total 898 -- 952 683 946

Family income

 Lower income -- -- -- -- --

 Middle income -- -- -- -- --

 Higher income -- -- -- -- --

 Moderate level

 Total 1,816 1,504 2,013 1,687 1,024

Family income

 Lower income -- -- -- -- --

 Middle income 1,708 -- -- 1,589 1,047

 Higher income 1,913 -- 2,190 1,834 956

 Upper level

 Total 2,316 1,500 1,753 2,216 1,733

Family income

 Lower income -- -- -- -- --

 Middle income 2,269 -- -- 1,935 1,850

 Higher income 2,321 -- 1,867 2,265 1,703
APPENDIX A: SUPPLEMENTAL TABLES

70

Table A4.—Average grant amount awarded to full-time, full-year dependent undergraduates with no

financial need receiving grant aid according to source of grant, by price-of-attendance level and

family income: 1995-96—Continued

Total Federal State Institutional Other

grant aid grant aid grant aid grant aid grant aid

 Highest level

 Total 3,910 1,500 1,202 4,206 1,737

Family income

 Lower income -- -- -- -- --

 Middle income -- -- -- -- --

 Higher income 4,012 -- 1,164 4,293 1,752

--Sample size too small for reliable estimate.

NOTE: Dependent undergraduates are limited to those who attended only one institution and were U.S. citizens or permanent

residents.

SOURCE: U.S. Department of Education, National Center for Education Statistics, 1995-96 National Postsecondary Student Aid

Study (NPSAS:96), Undergraduate Data Analysis System.
APPENDIX A: SUPPLEMENTAL TABLES

71

Table A5.—Percentage of full-time, full-year dependent undergraduates with financial need receiving loans

according to type of loan, by price-of-attendance level and family income: 1995-96

Subsidized Stafford PLUS

 Total student unsubsidized unsubsidized

 student loans loans student loans loans*

All

 Total

 49.0 44.6 10.0 7.7

Family income

 Lower income 49.9 46.4 6.0 4.3

 Middle income 49.6 45.9 12.4 10.1

 Higher income 44.1 34.1 17.2 12.3

Lowest level

 Total 10.8 9.6 2.0 0.0

Family income

 Lower income 11.1 10.7 1.4 0.0

 Middle income 7.1 7.1 4.1 0.0

 Higher income -- -- -- --

 Moderate level

 Total 34.3 31.2 7.1 1.6

Family income

 Lower income 34.5 31.1 3.5 0.5

 Middle income 34.1 31.8 12.7 3.7

 Higher income -- -- -- --

 Upper level

 Total 53.1 49.1 12.1 8.4

Family income

 Lower income 58.4 55.1 7.8 5.5

 Middle income 49.4 46.0 14.3 10.0

 Higher income 43.6 33.7 24.0 15.9
APPENDIX A: SUPPLEMENTAL TABLES

72

Table A5.—Percentage of full-time, full-year dependent undergraduates with financial need receiving loans

according to type of loan, by price-of-attendance level and family income: 1995-96

Subsidized Stafford PLUS

 Total student unsubsidized unsubsidized

 student loans loans student loans loans*

Highest level

 Total 60.5 53.9 10.4 12.0

Family income

 Lower income 69.8 64.6 7.3 8.7

 Middle income 64.3 59.1 10.1 15.1

 Higher income 45.0 35.2 14.2 11.3

*PLUS loans are unsubsidized variable-interest rate loans awarded to parents of dependent students who are able to meet

criteria for credit worthiness. PLUS loans are awarded up to the maximum amount of the cost of attendance at the institution

minus any other financial aid.

--Sample size too small for reliable estimate.

NOTE: Dependent undergraduates are limited to those who attended only one institution and were U.S. citizens or

permanent residents.

SOURCE: U.S. Department of Education, National Center for Education Statistics, 1995-96 National Postsecondary Student Aid

Study (NPSAS:96), Undergraduate Data Analysis System.
APPENDIX A: SUPPLEMENTAL TABLES

73

Table A6.—Average loan amount received by full-time, full-year dependent undergraduates with financial

need who received loans according to type of loan, by price-of-attendance level and family

income: 1995-96

Subsidized Stafford PLUS

 Total student unsubsidized unsubsidized

 student loans loans student loans loans*

All

 Total $3,986 $3,561 $2,542 $6,184

Family income

 Lower income 3,913 3,678 2,393 4,839

 Middle income 4,033 3,496 2,444 6,040

 Higher income 4,122 3,261 2,952 8,270

Lowest level

 Total 2,086 1,876 1,599 --

Family income

 Lower income -- -- -- --

 Middle income -- -- -- --

 Higher income -- -- -- --

Moderate level

 Total 2,914 2,635 2,132 3,190

Family income

 Lower income 2,806 2,804 1,812 --

 Middle income 3,109 2,388 2,297 --

 Higher income -- -- -- --

 Upper level

 Total 3,902 3,460 2,411 4,753

Family income

 Lower income 3,897 3,647 2,204 3,606

 Middle income 3,900 3,327 2,355 5,073

 Higher income 3,944 2,766 2,954 5,825
APPENDIX A: SUPPLEMENTAL TABLES

74

Table A6.—Average loan amount received by full-time, full-year dependent undergraduates with financial

need who received loans according to type of loan, by price-of-attendance level and family

income: 1995-96—Continued

Subsidized Stafford PLUS

 Total student unsubsidized unsubsidized

 student loans loans student loans loans*

 Highest level

 Total 4,546 4,097 2,991 7,994

Family income

 Lower income 4,749 4,399 3,213 6,710

 Middle income 4,507 4,083 2,845 7,565

 Higher income 4,276 3,522 3,006 9,857

*PLUS loans are unsubsidized variable-interest rate loans awarded to parents of dependent students who are able to meet

criteria for credit worthiness. PLUS loans are awarded up to the maximum amount of the cost of attendance at the institution

minus any other financial aid.

--Sample size too small for reliable estimate.

NOTE: Dependent undergraduates are limited to those who attended only one institution and were U.S. citizens or permanent

residents.

SOURCE: U.S. Department of Education, National Center for Education Statistics, 1995-96 National Postsecondary Student Aid

Study (NPSAS:96), Undergraduate Data Analysis System.
75

APPENDIX B: GLOSSARY

This glossary describes the variables used in this report. The variables were taken directly from the NCES

NPSAS:96 Undergraduate Data Analysis System (DAS). This is an NCES software application that generates tables

from the NPSAS:96 data. A description of the DAS software can be found in appendix C. The variables used in

this analysis were either items taken directly from the surveys or derived by combining one or more items in these

surveys.

The variables listed in the index below are in the order they appear in the report; the glossary is in alphabetical order by DAS variable name (displayed along the right-hand column).

INDEX OF VARIABLES

Attendance status.................................... ATTNSTAT

Dependent.................................................... DEPEND

Citizenship................................................. CITIZEN2

Family income .............................................. DEPINC

Family income in 1994 of less than

125 percent of poverty level .................PCTPOV94

Pell grant................................................... PELLAMT

Stafford subsidized loan ............................ STAFSUB

Institution type and highest degree .............SECTOR9

Expected family income at any postsecondary institution .......................................EFC4

Price-of-attendance level ........................ BUDGETFT

Gender .........................................................GENDER

Race/ethnicity ................................................... RACE

Parent family size ....................................PFAMNUM

Highest education completed by either parent ............................................. PAREDUC

Student housing status ............................ LOCALRES

Worked while enrolled ............................HRSWORK

Undergraduate level................................ UGLEVEL1

Number of Advanced Placement

(AP) tests taken......................................... APTEST

Scholastic Assessment Test (SAT)

combined score ................................... TESATDER

Financial need status...................................FTNEED1

Net price .....................................................NETCST5

Unmet need status.......................................FTNEED2

Ratio of total aid to price-ofattendance ............................................... AIDCST2

Financial aid application status..................... AIDAPP

Did not want debt ..................................... SNODEBT

Family income too high.......................... SHINCOME

Family or student could pay ..................... SFAMPAY

Total aid........................................................ TOTAID

Earnings while enrolled ................................. WKINC

Parents provided any contribution ..........PARCNTRB

Parents helped with direct contribution .......................................................... PARPDIR

Allowance from parents.........................ALLOWNCE

Other type of support from parents.........SCSUPAMT 

Total loan................................................ TOTLOAN2

Ratio of loans to total aid.......................... LOANPCT

Grant aid ...................................................... TOTGRT

Ratio of grant aid to total aid ........................GRTPCT

Total work-study ......................................TOTWKST

Ratio of work-study to total aid............... WORKPCT

Total other aid......................................... TOTOTHR2

Federal grant aid ........................................TFEDGRT

State grant aid........................................... STGTAMT

Institutional grant aid..............................INGRTAMT

Other grant aid.......................................OTHGTAMT

Total student loans.................................... TOTLOAN

Subsidized loans ..........................................T4SUB95

Stafford unsubsidized loan ..................... STAFUNSB

PLUS unsubsidized loans ....................... PLUSAMT3
APPENDIX B: GLOSSARY

76

VARIABLE LIST

Financial aid application status AIDAPP

This variable indicates whether the student ever applied for financial aid in 1995–96. A student who was not interviewed (did not have telephone survey data) and had no record of an aid application either at the school or through

the U.S. Department of Education’s Central Processing system, was assumed to have not applied.

Received aid

Did not receive aid

Ratio of total aid to price of attendance AIDCST2

This variable indicates the ratio of total aid to the full-time, full-year student budget during 1995–96 for full-time,

full-year students. This is equal to the total of all aid, divided by the full-time, full-year student budget.

Allowance from parents ALLOWNCE

This variable indicates the amount of allowance students reported receiving on a monthly basis from their parents.

Constructed by examining student-reported allowance (SCALWAMT) and the frequency the allowance was given

(SCALWFRQ). If the frequency reported was per week, then the variable was set equal to the amount reported

multiplied by 4.33. If the frequency reported was per month, then the variable was set equal to the amount reported.

If the frequency reported was per year, the variable was set equal to the amount reported divided by 12. If the frequency reported was per term, the type of term at the student's institution was examined and the amount reported

was divided by 4.5 if the terms were semesters, divided by 2 if the terms were quarters, divided by 3 if the terms

were trimesters, and set to missing if the terms differed by program. This question was asked only of students aged

30 or younger. Values for students over 30 were set to zero.

Number of Advanced Placement (AP) tests taken APTEST

This variable provides a count of advanced placement tests the student reported having taken. The question was

worded as follows: Did you take any AP tests (advanced placement)? Which ones did you take and what was your

score?

Attendance status ATTNSTAT

This variable indicates a student’s attendance intensity and persistence during 1995–96. Intensity refers to the student’s full- or part-time attendance while enrolled. Persistence refers to the number of months a student was enrolled during the year. Students were considered to have enrolled for a full year if they were enrolled 8 or more

months during the NPSAS year. Students did not have to be enrolled for a full month in order to be considered enrolled for that month.

Full-time, full-year Enrolled 8 or more months full-time during 1995–96 at one institution. Additional months

enrolled could be part-time enrollment.
APPENDIX B: GLOSSARY

77

Price-of-attendance level BUDGETFT

This variable indicates the total student budget amount for full-time, full-year students at the NPSAS institution,

including tuition and fees and total nontuition cost allowances. Student budgets are based on typical or average expected expenses, and vary with the student’s dependency status and residence arrangements. Full-time budgets were

estimated for students based on the actual reported amounts or institutional averages of nontuition costs for categories of students, based on local residence and dependency status and average full-time tuition. This is the typical

budget for a full-time, full-year student.

Lowest price-of-attendance level (less than $6,000)

Moderate price-of-attendance level ($6,000-$8,499)

Upper price-of-attendance level ($8,500-$15,999)

Highest price-of-attendance level ($16,000 or more)

Citizenship CITIZEN2

This variable indicates the student’s citizenship status and federal financial aid eligibility. This variable is constructed from citizenship status reported on Federal Application for Financial Student Aid (FAFSA). Where not

available, student-reported data, institution-reported data, or data from the 1996-97 FAFSA were used.

Dependent DEPEND

Student’s dependency status.

Dependent Students were financially dependent if they did not meet any of the criteria for independence (see below).

Independent A student was considered independent by meeting one of the following criteria:

• Was 24 or older as of 12/31/95.

• Was a veteran.

• Was an orphan or ward of the court.

• Had legal dependents, other than spouse.

• Was married, and not claimed by parents on 1995 tax returns.

• Was a graduate student and not claimed as a dependent by parents on 1995 tax return.

Family income DEPINC

This indicates dependent student parents’ total income for 1994. This value is equal to total income for dependent

students.

Lower income (less than $35,000)

Middle income ($35,000-$69,999)

Higher income ($70,000 or more)

Expected family contribution EFC4

This variable indicates the composite expected family contribution (EFC). This provides the best estimate of the

student’s EFC, derived from examining the EFC values reported in the Pell payment file, the U.S. Department of

Education’s Central Processing System (CPS) matching records, the NPSAS institution, or estimated by regressions
APPENDIX B: GLOSSARY

78

based on dependency, family size, income, assets, and number in college. Differences in the timing of these

sources, differences in the institutions to which they refer, changes in the student’s dependency status and financial

situation during the period of a year, and the potential use of the professional judgment changes by Financial Aid

Officers at any time or at any institution make it impossible to determine a single definitive EFC value or dependency status for all students during the entire year. For Pell grant recipients, the EFC on the Pell payment file was

always used. For other financial aid recipients the primary EFC from the most recent CPS record was used if available, or an EFC reported by the NPSAS institution.

Financial need status FTNEED1

This variable indicates the student budget of full-time, full-year students minus EFC. For estimates of average dollar amounts, the average amount received is the average of all students who had financial need. Negative values

were recoded to zero.

Financial need

No financial need

Unmet need status FTNEED2

This variable indicates full-time, full-year student budget, minus composite EFC and total financial aid. Negative

values were recoded to zero.

Did have unmet need

Did not have unmet need

Gender GENDER

This variable indicates student gender. Based on student-reported gender, gender reported by sample institution, or

gender reported on FAFSA. Where not available GENDER was assigned based on students’ first name.

Male

Female

Ratio of grant aid to total aid GRTPCT

This variable indicates the percentage of total aid that was grant aid during 1995–96. The ratio is equal to the total

amount of grant aid (TOTGRT), divided by total aid amount (TOTAID), and multiplied by 100. This variable is

only computed for those who had some aid.
APPENDIX B: GLOSSARY

79

Worked while enrolled HRSWORK

This variable indicates the average hours the student worked per week while enrolled during 1995–96. The variable

is based on students’ reports of average hours worked per week while enrolled during 1995–96. Students with zero

jobs during 1995–96 were recoded to zero. Average hours greater than 60 were recoded to 60.

Did not work

Worked 1-19 hours per week while enrolled

Worked 20-29 hours per week while enrolled

Worked 30 or more hours per week while enrolled

Institutional grant aid INGRTAMT

This variable indicates the total amount of institutional grant aid received during 1995–96. This includes all grants

and scholarships, and tuition waivers received during the NPSAS year.

Ratio of loans to total aid LOANPCT

This variable indicates the ratio of loans to total aid, or the percentage of total aid that is loans received during

1995–96. The ratio is equal to the total amount of all loans, excluding PLUS (TOTLOAN) divided by total amount

of all aid (TOTAID) multiplied by 100. This variable is only computed for students who had some amount of aid.

Student housing status LOCALRES

This variable indicates the student’s housing status as reported either by the NPSAS school or by the student.

On campus

Off campus

With parents or relatives

Net price NETCST5

This variable indicates the net price, or the full-time, full-year student budget minus total aid. This variable was

calculated for students enrolled full-time for at least 8 months during 1995–96.

Other grant aid OTHGTAMT

This variable indicates the amount of grants that were not federal, state, or institutional, including National Merit

Scholarships, other private aid, and employee tuition reimbursements received during 1995–96.

Parents provided any contribution PARCNTRB

This variable indicates whether the student received any parental contribution: a direct contribution to the institution,

an allowance, or indirect costs.
APPENDIX B: GLOSSARY

80

Highest education completed by either parent PAREDUC

This variable indicates the parents’ highest level of education. This is equal to the maximum of the highest level of

education completed by father and highest level of education completed by mother.

Less than high school

High school graduate

Some postsecondary education

Bachelor’s degree

Master’s degree

Doctoral or first-professional degree

Parents helped with direct contribution PARPDIR

This variable indicates whether parents reported making a direct contribution to the institution to pay for tuition

(PLPDSCTF), housing (PLPDSCHS), meals (PLPDSCML), or books (PLPDSCBS). If not available, the student's

report of direct payment for tuition (SCPARTUI), room & board (SCPARRM), or books (SCPARBK) was used.

Family income in 1994 of less than 125 percent of poverty level PCTPOV94

This variable indicates the family income in 1994 as a percentage of the federal poverty level thresholds for 1994.

This variable is based on family size, total income and dependency. The calculation reflects the family of the parents of dependent students. The variable is derived from total income in 1994, and household size based on dependency. A maximum is set at 1,000 (ten times poverty threshold) and all values above 1,000 are recoded to 1,000.

Less than 125 percent of poverty level

125 percent of poverty level or higher

Pell grant PELLAMT

This variable indicates the federal Pell grant amount received during 1995–96 at all schools attended. Institutional

reports were supplemented with the 1995–96 Pell Grant payment file. Pell grants are awarded to undergraduates

who have not yet received a Bachelor’s or first professional degree. They are intended as a financial base, to which

other financial aid awards can be added. The amount of a Pell grant depends on EFC, cost of attendance, and attendance status. In 1995–96 the maximum Pell grant amount was $2,340.

Parent family size PFAMNUM

This variable indicates the number of people the respondent’s parents supported between July 1, 1995 and June 30,

1996, including the respondent and respondent’s parents (thus, the variable has a minimum of 2). The variable is

constructed using parent family size reported on the FAFSA. If not available, the student-reported data were used.

The FAFSA family size definition is as follows: Anyone in the immediate family who receives more than 50 percent

support from the dependent student's parents, or the independent student and spouse, may be counted in the household size even if that person does not reside in the house, as in the case of a sibling who is over 24 but still in college

and receiving the majority of support from parents. Siblings who are dependent as of the application date are also

included, regardless of whether they received at least 50 percent of their support from their parents. Any other person who resides in the household and receives more than 50 percent support from the parents may also be counted

(such as an aunt, cousin, etc.), as long as the support is expected to continue throughout the award year. An unborn
APPENDIX B: GLOSSARY

81

child who will be born during the award year may also be counted in the household size. Household size and tax

exemptions are not necessarily the same. Exemptions look at the previous year or tax year, while household size

refers to the school year for which the student is applying for aid. If the parents are divorced, the parent that the

student lived with the most during the past year is counted. It does not make a difference which parent claims the

student as a dependent for tax purposes. If the student did not live with either parent or lived equally with each parent, the parental information must be provided for the parent from whom the student received the most financial

support, or the parent from whom the student received the most support the last time support was given. If the student is a dependent student and the parent is remarried, the stepparent's information must be included, or the student

will not be considered for federal student financial aid.

Missing values and values less than or equal to two were recoded to minimum possible family size based on parent’s

marital status.

Two

Three

Four

Five or more

PLUS unsubsidized loans PLUSAMT3

This variable indicates the total federal PLUS loans received by the parents during 1995–96. PLUS loans are unsubsidized variable-interest rate loans awarded to parents of dependent students who are able to meet criteria for credit

worthiness. PLUS loans are awarded up to the maximum amount of the cost of attendance at the institution minus

any other financial aid. Two types of PLUS loans are available to eligible students, direct and FFEL loans. Direct

loans are available through the institution, and FFEL loans are offered by commercial lenders such as banks, credit

unions, or savings and loans associations. The interest rate on these loans cannot exceed 9 percent.

Race/ethnicity RACE

American Indian/Alaskan Native A person having origins in any of the original peoples of North America and

who maintains cultural identification through tribal affiliation or community

recognition.

Asian/Pacific Islander A person having origins in any of the Asian or Pacific Islander original peoples of the Far East, Southeast Asia, the Indian Subcontinent, or Pacific Islands. This includes people from China, Japan, Korea, the Philippine Islands, Samoa, India and Vietnam.

Black, non-Hispanic A person having origins in any of the black racial groups of Africa, and not

of Hispanic origin.

Hispanic A person of Mexican, Puerto Rican, Cuban, Central or South American, or

other Spanish culture or origin, regardless of race.

White, non-Hispanic A person having origins in any of the original peoples of Europe, North Africa, or the Middle East (except those of Hispanic origin).

Other A person not in one of the above categories.
APPENDIX B: GLOSSARY

82

Other type of support from parents SCSUPAMT

This variable represents the estimated student-reported value of the support from parents for indirect costs other than

tuition, room and board, books and supplies, or an allowance (PARPDIR). The exact question wording varied depending on the type of student and whether the student was living on campus. If the student was unable to provide a

dollar amount, they were asked to estimate whether they thought the amount was more than $1,000. If the student

thought it was worth more than $1,000, they were asked a series of items as to what kinds of support.

None

Less than $1,000

$1,000 or more

Institution type and highest degree SECTOR9

This variable indicates the institution type and highest degree offered at the NPSAS institution where student was

sampled. Constructed by combining the CONTROL of the institution and the highest level of degree offered at that

institution.

Public, less-than-4-year

Public, 4-year, nondoctoral-granting

Public, doctoral-granting

Private, not-for-profit, less-than-4-year

Private, not-for-profit, 4-year, nondoctoral-granting

Private, not-for-profit, doctoral-granting

Private, for-profit

Family or student could pay SFAMPAY

This variable indicates a student-reported reason he/she did not apply for financial aid, such as the family and student could pay. The question was worded as follows: What were the reasons you and your family did not apply for

financial aid?

Family income too high SHINCOME

This variable indicates a student-reported reason he/she did not apply for financial aid, such as the family income

was too high to qualify. The question was worded as follows: What were the reasons you and your family did not

apply for financial aid?

Did not want debt SNODEBT

This variable indicates a student-reported reason he/she did not apply for financial aid, such as not being willing to

go into debt. The question was worded as follows: What were the reasons you and your family did not apply for

financial aid?

Stafford subsidized loan STAFSUB

This variable indicates the amount of subsidized Stafford (FFEL or Direct) loans received by the student during

1995–96.
APPENDIX B: GLOSSARY

83

Stafford unsubsidized loan STAFUNSB

This variable indicates the amount of unsubsidized Stafford loans the student received during 1995–96.

State grant aid STGTAMT

This variable indicates the amount of state grants and scholarships, fellowships and traineeships, including the federal portion of State Student Incentive Grants received by the student during 1995–96.

Subsidized loans T4SUB95

This variable indicates the amount of Title IV subsidized loans the student received during 1995–96. This variable

sums the FFEL, Stafford subsidized, direct subsidized and Perkins loans received in 1995–96.

Scholastic Assessment Test (SAT) combined score TESATDER

This variable reports the SAT combined score, derived as either the sum of SAT verbal and math scores or the ACT

composite score converted to an estimated SAT combined score using a concordance table from the following

source: Marco, G., Abdel-fattah, A. & Baron, P. Methods Used to Establish Score Comparability on the Enhanced

ACT Assessment and the SAT. (New York: College Entrance Examination Board, 1992). Constructed in the following order of precedence from agency-reported, institution-reported, or student-reported SAT or ACT.

Federal grant aid TFEDGRT

This variable indicates the total amount of federal grants, including Pell, Supplemental Educational Opportunity

Grants, and other federal grant/scholarships or fellowship/traineeships, but not including veteran’s benefits received

by the student during 1995–96.

Total aid TOTAID

This variable reflects the total amount of financial aid received from all sources in 1995–96, including federal, state,

institution, and other sources received by the student. The percentage of students who received any financial aid is

the percentage with positive amounts recorded for this variable. The average amount received is the average of all

students who received any financial aid.

Grant aid TOTGRT

This variable indicates the total amount of all grants and scholarships, federal, state, institutional, and other received

by the student during 1995–96. Grants are a type of student financial aid that does not require repayment or employment. Grants include scholarships and fellowships. Tuition waivers and employer aid are considered grant aid.

The percentage of students with grants is the percentage with positive amounts recorded for this variable. The average amount received is the average of all students who received grants.
APPENDIX B: GLOSSARY

84

Total student loans TOTLOAN

This variable indicates the total amount of loans the student received regardless of the source. Loans are a type of

student financial aid that advance funds and are evidenced by a promissory note requiring the recipient to repay the

specified amounts under prescribed conditions. The percentage of students with loans is the percentage with positive amounts recorded for this variable. The average amount received is the average of all students who received

loans. This does not include PLUS.

Total loan TOTLOAN2

This variable indicates the total amount of all the loans the student received regardless of the source. The percentage of students with loans is the percentage with positive amounts recorded for this variable. The average amount

received is the average of all students who received loans. This does include PLUS and was not used to calculate

TOTAID.

Total other aid TOTOTHR2

This represents the total aid not classified by type as grants, loans, or work-study. This is equal to TOTOTHR minus PLUSAMT3. PLUS loans to parents are classified as “other” type rather than as loans in the award matrix.

Total work-study TOTWKST

This variable indicates the total amount of all work study awards received during 1995–96. This is equal to the sum

of federal work-study amount, state work-study amount, institution work-study amount, and other unclassified

work-study amounts.

Undergraduate level UGLEVEL1

This variable indicates the students’ undergraduate level during the first term of 1995–96. First-time beginning students were categorized separately as were seniors finishing in 1995–96. “Other” includes unclassified undergraduates and students with degrees who may be taking an undergraduate’s course.

First-year/freshman

Second-year/sophomore

Third-year/junior

Fourth-year/senior

Other
APPENDIX B: GLOSSARY

85

Earnings while enrolled WKINC

This variable indicates the amount of student income earned from working while enrolled in 1995–96. Income was

constructed by examining student reported income from working while enrolled and the frequency of that income.

If the frequency reported was per hour then the variable was set equal to the amount reported, multiplied by the

number of hours worked per week while enrolled (SEHOURS), then multiplied by 4.33 and then by the number of

months enrolled. If the frequency reported was per week, then the variable was set equal to the amount reported

(SEENRAMT), and multiplied by 4.33 then by the number of months enrolled. If the frequency reported was per

month, then the variable was set equal to the amount reported and then multiplied by the number of months enrolled.

If the frequency reported was per year, then the variable was set equal to the amount reported. If the frequency reported was per term, the type of term at the student's institution was examined and the amount reported was divided

by 4.5 and then multiplied by the number of months enrolled, if the terms were semesters, divided by 2 if the terms

were quarters and then multiplied by the number of months enrolled, divided by 3 if the terms were trimesters and

then multiplied by the number of months enrolled, and set to missing if the terms differed by program.

Ratio of work-study to total aid WORKPCT

This variable indicates the ratio of work-study to total aid, or percentage of total aid that is work-study received

during 1995–96. The ratio is equal to total amount of work-study aid (TOTWKST), divided by total amount of all

aid, including PLUS and VA/DOD (TOTAID). This variable is only computed for students who had some amount

of aid (TOTAID >0).
86

APPENDIX C: TECHNICAL NOTES

THE 1995–96 NATIONAL POSTSECONDARY STUDENT AID STUDY (NPSAS:96)

The 1995–96 National Postsecondary Student Aid Study (NPSAS:96) is a comprehensive

nationwide study conducted by the Department of Education’s National Center for Education

Statistics (NCES) to determine how students and their families pay for postsecondary education.

It also describes demographic and other characteristics of students enrolled. The study is based

on a nationally representative sample of approximately 41,400 undergraduates (including 27,000

student interviews) enrolled in more than 830 postsecondary education institutions. Students attending all types and levels of institutions are represented in the sample, including public and

private institutions and less-than-2-year institutions, less-than-4-year institutions, and 4-year

colleges and universities. The weighted effective response rate for the telephone interviews was

76.2 percent. The study is designed to address the policy questions resulting from the rapid

growth of financial aid programs, and the succession of changes in financial aid program policies

since 1986. The first NPSAS study was conducted in 1986-87, then again in 1989-90, and 1992-

93.32

ACCURACY OF ESTIMATES

The statistics in this report are estimates derived from a sample. Two broad categories of

error occur in such estimates: sampling and nonsampling errors. Sampling errors occur because

observations are made only on samples of students, not on entire populations. Nonsampling errors occur not only in sample surveys, but also in complete censuses of entire populations. Nonsampling errors can be attributed to a number of sources: inability to obtain complete information about all students in all institutions in the sample (some students or institutions refused to

participate, or students participated but answered only certain items); ambiguous definitions; differences in interpreting questions; inability or unwillingness to give correct information; mistakes in recording or coding data; and other errors of collecting, processing, sampling, and imputing missing data.

 

32For more information on the NPSAS survey, consult U.S. Department of Education, National Center for Education

Statistics, Methodology Report for the 1995–96 National Postsecondary Student Aid Study (NCES 98-0783)

(Washington, D.C.: 1998).
APPENDIX C: TECHNICAL NOTES

87

DATA ANALYSIS SYSTEM

The estimates presented in this report were produced using the NPSAS:96 Undergraduate

Data Analysis System (DAS). The DAS software makes it possible for users to specify and generate their own tables from the NPSAS:96 data. With the DAS, users can replicate or expand

upon the tables presented in this report. In addition to the table estimates, the DAS calculates

proper standard errors33 and weighted sample sizes for these estimates. For example, table C1

contains standard errors that correspond to table 22, and was generated by the DAS. If the number of valid cases is too small to produce a reliable estimate (less than 30 cases), the DAS prints

the message “low-N” instead of the estimate.

Table C1.—Standard errors for table 22: Average loan amount received by full-time, full-year dependent

undergraduates who received loans according to type of loan, by financial need status and family

income: 1995-96

Subsidized Stafford PLUS

 Total student unsubsidized unsubsidized

 student loans loans student loans loans*

All

 Total 36.1 33.8 46.5 157.8

Family income

 Lower income 55.3 48.9 136.1 239.9

 Middle income 45.9 43.3 58.5 181.0

 Higher income 62.8 81.6 49.4 291.2

Financial need

 Total 37.9 33.6 56.2 169.7

Family income

 Lower income 55.0 48.4 117.7 234.8

 Middle income 45.8 42.7 71.0 187.1

 Higher income 91.0 83.1 87.0 396.1

 

33The NPSAS:96 sample is not a simple random sample and, therefore, simple random sample techniques for estimating sampling error cannot be applied to these data. The DAS takes into account the complexity of the sampling

procedures and calculates standard errors appropriate for such samples. The method for computing sampling errors

used by the DAS involves approximating the estimator by the linear terms of a Taylor series expansion. The procedure is typically referred to as the Taylor series method.
APPENDIX C: TECHNICAL NOTES

88

Table C1.—Standard errors for table 22: Average loan amount received by full-time, full-year dependent

undergraduates who received loans according to type of loan, by financial need status and family

income: 1995-96—Continued

Subsidized Stafford PLUS

 Total student unsubsidized unsubsidized

 student loans loans student loans loans*

No financial need

 Total 72.8 303.1 59.6 348.7

Family income

 Lower income -- -- -- --

 Middle income 120.1 -- 100.6 436.4

 Higher income 73.6 -- 53.4 407.6

*PLUS loans are unsubsidized variable-interest rate loans awarded to parents of dependent students who are able to meet

criteria for credit worthiness. PLUS loans are awarded up to the maximum amount of the cost of attendance at the institution

minus any other financial aid.

--Sample size too small for reliable estimate.

NOTE: Dependent undergraduates are limited to those who attended only one institution and were U.S. citizens or permanent

residents.

SOURCE: U.S. Department of Education, National Center for Education Statistics, 1995-96 National Postsecondary Student Aid

Study (NPSAS:96), Undergraduate Data Analysis System.

In addition to tables, the DAS will also produce a correlation matrix of selected variables

to be used for linear regression models. Included in the output with the correlation matrix are the

design effects (DEFTs) for each variable in the matrix. Since statistical procedures generally

compute regression coefficients based on simple random sample assumptions, the standard errors

must be adjusted with the design effects to take into account the NPSAS:96 stratified sampling

method. (See discussion under “Statistical Procedures” below for the adjustment procedure.)

The DAS can be accessed electronically at www.nces.ed.gov/DAS. For more information about the NPSAS:96 Data Analysis System contact:

Aurora D’Amico

NCES Postsecondary Studies Division

1990 K Street, NW

Washington, DC 20006

(202) 502-7334

Internet address: Aurora.d’amico@ed.gov
APPENDIX C: TECHNICAL NOTES

89

STATISTICAL PROCEDURES

The descriptive comparisons were tested in this report using Student’s t statistic. Differences between estimates are tested against the probability of a Type I error, or significance level.

The significance levels were determined by calculating the Student’s t values for the differences

between each pair of means or percentages and comparing these with published tables of significance levels for two-tailed hypothesis testing. Student’s t values may be computed to test the

difference between estimates with the following formula:

E1 – E2

t = (1)

se1

2

 + se2

2

where E1 and E2 are the estimates to be compared and se1 and se2 are their corresponding standard errors. Note that this formula is valid only for independent estimates. When the estimates

were not independent (for example, when comparing the percentages across a percentage distribution), a covariance term was added to the denominator of the t-test formula:

 E1 – E2

t = (2)

se1

2

 + se2

2

 – 2(r)se1se2

where r is the correlation between the two estimates.34 This formula is used when comparing

two percentages from a distribution that adds to 100. The estimates, standard errors, and correlations can all be obtained from the DAS.

There are hazards in reporting statistical tests for each comparison. First, comparisons

based on large t statistics may appear to merit special attention. This can be misleading, since

the magnitude of the t statistic is related not only to the observed differences in means or percentages but also to the number of students in the specific categories used for comparison.

Hence, a small difference compared across a large number of students would produce a large t

statistic. A second hazard in reporting statistical tests for each comparison occurs when making

multiple comparisons among categories of an independent variable. For example, when making

paired comparisons among different levels of income, the probability of a Type I error for these

comparisons taken as a group is larger than the probability for a single comparison. When more

 

34U.S. Department of Education, National Center for Education Statistics, A Note from the Chief Statistician, no. 2,

1993.
APPENDIX C: TECHNICAL NOTES

90

than one difference between groups of related characteristics or “families” is tested for statistical

significance, one must apply a standard that assures a level of significance for all of those comparisons taken together. Comparisons were made in this report only when p<=.05/k for a particular pairwise comparison, where that comparison was one of k tests within a family. This

guarantees both that the individual comparison would have p<=.05 and that for k comparisons

within a family of possible comparisons, the significance level for all the comparisons will sum

to p<=.05.35

For example, in a comparison of the percentages of males and females who enrolled in

postsecondary education only one comparison is possible (males versus females). In this family,

k=1, and the comparison can be evaluated without adjusting the significance level. When students are divided into five racial-ethnic groups and all possible comparisons are made, then k=10

and the significance level of the each test must be p<=.05/10, or p<=.005. The formula for calculating family size (k) is as follows:

 j ( j – 1 ) 

k = (3)

2

where j is the number of categories for the variable being tested. In the case of raceethnicity, there are five racial-ethnic groups (American Indian/Alaskan Native, Asian/Pacific Islander, black, non-Hispanic, Hispanic, and white, non-Hispanic), so substituting 5 for j in equation 3,

( 5 ) ( 5 – 1 )

k = = 10 (4)

2

ADJUSTMENT OF MEANS TO CONTROL FOR BACKGROUND VARIATION

Tabular results are limited by sample size when attempting to control for additional factors that may account for the variation observed between two variables. For example, when examining the percentages of those who completed a degree, it is impossible to know to what extent the observed variation is due to low-income status differences and to what extent it is due to

 

35The standard that p<=.05/k for each comparison is more stringent than the criterion that the significance level of

the comparisons should sum to p<=.05. For tables showing the t statistics required to ensure that p<=.05/k for a

particular family size and degrees of freedom, see Olive Jean Dunn, “Multiple Comparisons Among Means,” Journal of the American Statistical Association 56: 52-64.
APPENDIX C: TECHNICAL NOTES

91

differences in other factors related to income, such as type of institution attended, parents’ education, and so on. However, if a nested table were produced showing income within type of institution and within parent’s education, the cell sizes would be too small to identify the patterns.

When the sample size becomes too small to support controls for another level of variation, one

must use other methods to take such variation into account.

To overcome this difficulty, multiple linear regression was used to obtain means that

were adjusted for covariation among a list of control variables.36 Adjusted means for subgroups

were obtained by regressing the dependent variable on a set of descriptive variables such as gender, race-ethnicity, etc. Substituting ones or zeros for the subgroup characteristic(s) of interest

and the mean percentages for the other variables results in an estimate of the adjusted percentage

for the specified subgroup, holding all other variables constant. For example, consider a hypothetical case in which two variables, age and gender, are used to describe an outcome, Y (such as

completing a degree). The variables age and gender are recoded into a dummy variable representing age and a dummy variable representing gender:

Age A

24 years or older 1

23 or younger 0

Gender G

Female 1

Male 0

The following regression equation is then estimated from the correlation matrix output

from the DAS:

Y = a + ß1A + ß2G (5)

where Y is the adjusted mean (or percentage); a is the intercept from the regression model; ß1 is

the regression coefficient of the dummy variable representing age; and ß2 is the regression coefficient representing gender. To estimate the adjusted mean for any subgroup evaluated at the

mean of all other variables, one substitutes the appropriate values for that subgroup’s dummy

variables (1 or 0) and the mean for the dummy variable(s) representing all other subgroups. For

 

36For more information about least squares regression, see Michael S. Lewis-Beck, Applied Regression: An Introduction, vol. 22 (Beverly Hills, CA: Sage Publications, Inc., 1980) and William D. Berry and Stanley Feldman,

Multiple Regression in Practice, vol. 50 (Beverly Hills, CA: Sage Publications, Inc. 1987).
APPENDIX C: TECHNICAL NOTES

92

example, suppose Y represents degree attainments and is being described by age (A) and gender

(G), with means as follows:

Variable Mean

A 0.355

G 0.521

Next, suppose the regression equation results in:

Y = 0.15 + (0.17)A + (0.01)G (6)

To estimate the adjusted value for older students, one substitutes the appropriate parameter estimates and variable values into equation 6.

Variable Parameter Value

a 0.15 --

A 0.17 1.000

G 0.01 0.521

This results in:

Y = 0.15 + (0.17)(1) + (0.01)(0.521) = 0.325 (7)

In this case, the adjusted mean for older students is 0.325 and represents the expected

chance of the outcome (in this example, attaining a degree) for older students who look like the

average student across the other variables (in this example, gender). In other words, the adjusted

percentage of older students who attained a degree is 32.5 percent (0.325 x 100 for conversion to

a percentage).

One can produce a multivariate model using the DAS, since one of the output options of

the DAS is a correlation matrix, computed using pairwise missing values and weighted to ac
APPENDIX C: TECHNICAL NOTES

93

count for sampling design and nonresponse.37 This matrix can be used by most statistical software packages as the input data for least-squares regression. That is the approach used for this

report, with an additional adjustment to incorporate the complex sample design into the statistical

significance tests of the parameter estimates (described below). For tabular presentation, parameter estimates and standard errors were multiplied by 100 to match the scale used for reporting unadjusted and adjusted percentages. Most statistical software packages assume simple random sampling when computing standard errors of parameter estimates. Because of the complex

sampling design used for NPSAS, this assumption is incorrect. When more precise software is

not available, a better approximation of the standard errors is to multiply each standard error by

the average design effect associated with the dependent variable (DEFT),38 where the DEFT is

the ratio of the true standard error to the standard error computed under the assumption of simple

random sampling. It is calculated by the DAS and is part of the correlation matrix output file.

 

37Although the DAS simplifies the process of making regression models, it also limits the range of models. Analysts

who wish to use other than pairwise treatment of missing values to estimate probit/logit models (which are the most

appropriate for models with categorical dependent variables) can apply for a restricted data license from NCES. See

John H. Aldrich and Forrest D. Nelson “Linear Probability, Logit and Probit Models,” Quantitative Applications in

the Social Sciences, vol. 45. (Beverly Hills, CA: Sage University Press, 1984).

38The adjustment procedure and its limitations are described in C. J. Skinner, D. Hold, and T. M. F. Smith (eds.).

Analysis of Complex Surveys. (New York: John Wiley & Sons, 1989).