A recent study shows that families whose home values are on the rise are more likely to send their children off to college. The reason? They may enjoy a higher income, they could be using a home equity loan to pay for their kids´ tuition, or may simply feel more secure financially and be willing to take on that expense. This means that college enrollment peaked during the real estate boom.
According to an article by Allison Linn in Lifeinc, the question is now whether current lower home values will translate to a decline in college enrollment. It is apparent that the middle class today is earning much less than before the recession. This may be the main reason why many middle class parents can no longer afford tuition, rather than the fact that their home is worth much less than a few years ago.
Poorer families below a certain income bracket, on the other hand, may be eligible to receive financial aid that was made available during the global financial crisis; whereas the middle class may be making too much to qualify for grants, but not enough to pay all of their bills and even less so, a higher education.
Also, the increase in unemployment has driven both the younger and the older generations to pursue degrees in the hopes that a college education or an advanced degree may help them land a better paying job. The good news is that Latino college enrollment is on the rise, according to a study by the Pew Hispanic Center.
While the jury is still out as to whether the decline in college enrollment is due to lower housing values, higher unemployment rates, smaller salaries, or a combination thereof, there’s no question that it is harder to pay for college today that it was during the housing boom. Students, whether first-time or returning, may find that it is up to them to secure scholarships and loans in order to pay for their own education.