Low-Income Families Disproportionately Face Obstacles in College Decisions
The college decision-making process, while complicated for all families, is often disproportionately complex for those in the lowest income groups, who often make decisions that result in larger amounts of student debt and lower rates of academic success, according to a literature review from nonprofit behavioral design consultancy ideas42.
The review covered 250 papers and articles that examine financial decision-making throughout the college enrollment process, focusing on the challenges related to consumer information and financial capability of attending college. According to the review, 93 percent of high schools students have aspirations of attending college but less than 60 percent actually expect to attend. Furthermore, misperceptions about the affordability of college often limit the schools that students and families consider during the pre-application and application stages.
Before they even apply for college, students and families overestimate the cost of college by as much as 200 percent and half of prospective students overestimate their loan payments by 50 percent, indicating a significant lack of understating about the true cost of college, according to ideas42. Low-income and minority parents are the most likely to overestimate the cost of college, the literature review said, and to preemptively decide that a particular institution is not an option for their student.
The students who overestimate the cost of college are also the least likely to apply to selective institutions. The review shows that only 8 percent of high-achieving, low-income students are considered “achievement typical,” applying to one well-matched school, at least one safety school, and no non-selective schools.
According to the review, many students also don’t place enough emphasis on school quality indicators like the average amount of debt or graduation rates, instead placing more emphasis on things like distance from home. One study showed that 57 percent of students enrolled at public, four-year institutions are within 50 miles of home.
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