Understanding High School Students’ Willingness to Borrow to Pay College Prices

Abstract

Although the use of loans to finance postsecondary educational expenses seems commonplace, the emphasis of the U.S. financial aid system on loans may limit college opportunity for individuals who are unwilling or unable to incur this type of debt. This study uses data from descriptive case studies of 15 high schools to examine four guiding questions: What are high school students' perceptions of loans? How do parents and school staff shape students' perceptions of loans? What other forces contribute to students' perceptions of loans? How do students' perceptions of loans vary across schools? The findings illustrate that, although virtually all students are aware of loans, willingness to borrow varies across schools. The study also describes the ways that families and school personnel shape students' perceptions of loans. The paper concludes with implications for policy, practice, and future research.

Does Student Loan Debt Deter Higher Education Participation? New Evidence from England

“…She argues that, for many students, debt aversion frequently begins with their parents. Similarly, Perna (2008) shows that potential US higher education students' willingness to borrow varies depending on their financial resources and is influenced by their families and high schools. Low-income students' unwillingness to borrow limits their higher education opportunities and willingness to enroll in universities compared with community colleges.…”

The Role of Community College Financial Aid Counselors in Helping Students Understand and Utilize Financial Aid

“…Research suggests that many high schools fail to provide students with accurate and timely information about financial aid and college costs (McDonough, 2004;Perna, 2008). Discouragingly, the least informed financial aid counselors are often employed in lower-income high schools where the student body needs the most help understanding how to pay for college (Perna, 2008).…”

“…Research suggests that many high schools fail to provide students with accurate and timely information about financial aid and college costs (McDonough, 2004;Perna, 2008). Discouragingly, the least informed financial aid counselors are often employed in lower-income high schools where the student body needs the most help understanding how to pay for college (Perna, 2008). Many community college students are graduates of lower-income high schools, and so community college financial aid counselors are often charged with educating these students about the very basics of financial aid and helping them navigate the complex financial aid application process.…”

“…Applied to a higher education context, students leverage their social capital in order to accumulate other forms of capital (e.g., human, cultural) and gain access to institutional resources and support (Perna, 2006). Notable forms of social capital that students use when making college-related decisions include their parents, counselors, teachers, and peer groups (McDonough, 2004;Perna, 2008;Tierney & Venegas, 2006). These sources of social capital can be leveraged to provide students with the knowledge and support they need to make a variety of decisions about their college education.…”

“…Findings from existing research indicate that students, and their parents, view financial aid counselors as primary and reliable sources of information when making decisions about how to pay for college (McDonough, 2004;McDonough & Calderone, 2006;Perna, 2008). These counselors can help students complete the required paperwork (e.g., FAFSA, scholarship applications); identify available sources of financial aid; and meet the financial aid application deadlines.…”