NCPA - National Center for Policy Analysis


June 17, 2004

There is a perception that low-income students experience difficulty obtaining funds for college, says the Heritage Foundation. However, a recent Congressional Budget Office report concludes that funding does not pose a significant problem when it comes to attending college.

Low income students are those coming from families earning less than $30,000 per year. For these students:

  • Considering the average cost of $19,701 for a four-year college, low-income students can quality for over $14,000 in grants and low-interest loans, significantly more than middle and high-income students.
  • Most low-income students can finance their college education without exhausting all the available federal loan programs for which they are eligible.
  • In fact, low-income students generally pay less than 40 percent of the total cost of their education, a lower proportion than the 50 and 60 percent paid by middle- and higher-income students, respectively.

Furthermore, the study found that low-income students:

  • Pay for the smallest proportion of their college education due to help from federal Pell grants and other subsidies
  • Borrow less and work less to fund their college education, and are able to finance their education with less help from their parents.
  • And are more likely to attend public colleges instead of private institutions, further reducing their education costs.

The government's Higher Education Act will provide $73 billion in funds for college students for 2005 if renewed.

Source: Kirk A. Johnson, "Is Money an Impediment to a College Education? Recent Findings from the Congressional Budget Office," Executive Memorandum no. 922, The Heritage Foundation, April 15, 2004. "Private and Public Contributions to Financing College Education," Congressional Budget Office, January 2004.


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