1 / 14

How Students Pay for College

How Students Pay for College. ELPA 9451 January 29, 2014. Human Capital Theory. Human Capital: A unique set of innate abilities and acquired skills. Question: Why do some people acquire more education than others?

faris
Télécharger la présentation

How Students Pay for College

An Image/Link below is provided (as is) to download presentation Download Policy: Content on the Website is provided to you AS IS for your information and personal use and may not be sold / licensed / shared on other websites without getting consent from its author. Content is provided to you AS IS for your information and personal use only. Download presentation by click this link. While downloading, if for some reason you are not able to download a presentation, the publisher may have deleted the file from their server. During download, if you can't get a presentation, the file might be deleted by the publisher.

E N D

Presentation Transcript

  1. How Students Pay for College ELPA 9451 January 29, 2014

  2. Human Capital Theory • Human Capital: A unique set of innate abilities and acquired skills. • Question: Why do some people acquire more education than others? • Assumption: People choose the level and type of human capital that maximizes the present value of lifetime utility (happiness). • Sometimes this is abstracted to lifetime income

  3. Human Capital Theory • Important features of the human capital model: • Education leads to increased skill • Higher wages • Lower unemployment • Education is costly to the person and is generally paid up front • People value present income and utility at a higher rate than future income and utility • Discount rate

  4. Age-Earnings Profile College $ Average median income (Bachelor) ~ $55,700 Average lifetime net-income ~ $1,150,000 $30,000 HS Average median income ~ $33,800 Average lifetime net-income ~ $800,000 $20,000 Indirect Cost Time 18 22 65 Direct Cost Public 2-year undergraduate budget = $14,637 Public 4-year undergraduate budget = $20,339 Private 4-year undergraduate budget = $40,476 $20,000

  5. Model Generalizations • The longer the length of the income stream the larger the benefits that an education investment • Why people generally go to college as youth • As tuition falls, more will go to college • Why governmental policy focuses on financial aid • As earnings differential increase, more will go to college

  6. Source: Baum, S., & Ma, J. (2012).Trends in College Pricing 2012. Retrieved from The College Board website: http://trends.collegeboard.org/college-pricing

  7. Source: Baum, S., & Ma, J. (2012).Trends in College Pricing 2012. Retrieved from The College Board website: http://trends.collegeboard.org/college-pricing

  8. Source: Baum, S., & Ma, J. (2012).Trends in College Pricing 2012. Retrieved from The College Board website: http://trends.collegeboard.org/college-pricing

  9. Baum, S., & Payea, K. (2012). Trends in Student Aid, 2012. Retrieved from The College Board website: http://trends.collegeboard.org/student-aid

  10. Lifetime Earnings Source: Baum, S., Ma, J., & Payea, K. (2010). Education pays 2010: The benefits of higher education for individuals and society. Retrieved from The College Board website: http://trends.collegeboard.org/education-pays

  11. Source: Baum, S., Ma, J., & Payea, K. (2010). Education pays 2010: The benefits of higher education for individuals and society. Retrieved from The College Board website: http://trends.collegeboard.org/education-pays

  12. Activity Construct an age-earnings profile for: • A 30 year old person that is contemplating returning to schools to pursue a law degree (3 years) full time (unable to work). • A 38 year old person that is contemplating pursuing a M.Ed. Degree in student affairs part time (3 years) while continuing to work full time. • A 22 year old college graduate who is contemplating pursuing a Ph.D. in economics (5 years) full time with a graduate assistantship (no tuition, small stipend). • An 18 year old student who is contemplating attending a 2-year college (live at home, work full time) and then completing at a 4-year college (live away and not work).

  13. Heller (1997) • What are the most important points to take away from this article? • Identify a trend in Baum and Ma (2012) which you believe that Heller would be most worried about negatively affecting college access for low-income youth. • Identify a trend in Baum and Ma (2012) which you believe that Heller would argue is helping college access for low-income youth.

  14. Kane and Rouse (1999) • Jigsaw: What are the most important aspects to take away from the following sections: • The net effect of community college on . . . (p. 68) • Labor market payoffs to community college (p. 71) • Rough Approx. (p. 78) • Student financing (p. 79) • Based on the human capital model and findings in this article explain why community colleges may increase access to higher education. • What trends identified in Baum and Ma (2010) are different than are reported in Kane and Rouse (1999)?

More Related