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Dive Brief:
Lower-income students worked more hours to cover the rising net cost of college, while middle- and upper-income families have taken out more loans, according to a recent analysis from the Brookings Institution.
Well-off families also have drawn more on savings and earnings to keep up with rising college costs, found Brookings Nonresident Senior Fellow Phil Levine. Lower-income students without the family resources to cover rising costs increased the amount they worked. By 2008, three-fourths of those students worked and averaged 20 hours per week or more.
Levine found that student borrowing for four-year public and nonprofit universities changed little. The analysis was based on federal data from between 1996 and 2020.
Dive Insight:
Students from lower-income backgrounds have fewer financial options for meeting college costs, noted Levine, who is also an economics professor at Wellesley College, in Massachusetts.
Their families have limited earnings to contribute and may be reluctant to take out more debt or have trouble obtaining loans. “Working more may be the main viable alternative for them,” Levine wrote in his October analysis.
Higher-income families, meanwhile, “may have a greater capacity to help pay the higher bills from income or savings, and the parents have more access to loans,” he added.
From between 1996-97 and 2007-08, students from families making less than $50,000 took on an additional 2.5 hours of work per week on average, Levine found. After that year, the U.S. Department of Education no longer published data that disaggregated student earnings’ contribution to college costs.
The extra work could impact those students’ success. Levine cited 2023 research showing students who worked 20 hours a week experienced “deleterious” effects on their outcomes, such as grades and credits earned, which worsened with more hours.
Middle- and higher-income families had more earnings and resources to pay for higher college costs, which amounted to an additional $5,000 to $10,000 per year compared to the mid-1990s. But, Levine noted, “These larger payments could harm these families’ longer-term financial stability.”
