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Affordability and Access: The Role of Education in Social Mobility

Explore the impact of education on social mobility and the evolving societal trends influencing affordability and access to quality education. Analyze income and spending demographics, tuition demand and costs, and the importance of financial aid. Discover strategies and research resources to enhance access and enrollment in education.

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Affordability and Access: The Role of Education in Social Mobility

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  1. Affordability, Accessand Social Mobility D. Scott LooneyDirector of Admission & Financial AidCranbrook SchoolsBloomfield Hills, Michigan ________

  2. Outline • Introduction • Society & Education • Societal Trends • Importance of Education • Income Demographics • Spending Demographics • Affording Independent School: • Tuition: Demand vs. Cost • Financial Aid (Methodology Changes) • Strategies • Research Resources

  3. Access and Enrollment Demographics Economics Education Public Opinion Societal Patterns

  4. Access and Enrollment Demographics Economics Education Public Opinion Societal Patterns

  5. Cranbrook Schools Enrollment 1988 - 1998 vs.Gross Domestic Product in 1992 constant dollars andvs. Population of School Age Children in the U.S.

  6. Society & Education (It’s all about Education….)

  7. Changes in the American Family • One in three babies born in 1993 had a single mother. The rate was one in five in 1980. • The proportion of births occurring out of wedlock jumped from 5% in 1960 to 31% in 1993. • The number of children living in married-couple families dropped from 88% in 1960 to 69% in 1994. • In 1996, 39% of adults in the U.S. had been divorced. • The chance of a marriage ending in divorce has stabilized at 50%. • A stepchild or adopted child will be part of one third of all U.S. families by 2010. • In 1992, only 10% of U.S. families now fit the “traditional” model (husband sole breadwinner, full-time homemaker wife).

  8. “Young adults in low-income populations feel that they don’t have the wherewithal to enter marriage. It’s as if marriage has become a luxury consumer item, available only to those with the means to bring it off. Living together or single-parenthood has become the budget way to start a family… (Unless the economic situation changes) the institution of marriage as we knew it in this century will in the 21st century become a practice of the privileged. Marriage could become a luxury item that most Americans cannot afford.” Frank F. Furstenberg, Jr. Professor of Sociology University of Pennsylvania From “The Future of Marriage”

  9. Changes in the American Family • In 1994, 55% of mothers were working outside the home compared to 19% in 1960. • 81% of all College educated women work outside of the home (some not working at that point have done so earlier, or would later do so) • Only mothers who did not finish their high school education are reproducing faster than the replacement rate (an NAIS study of the factors determining likelihood to enroll in private schools showed that the educational attainment of the mother had the single highest correlation...private school students have a disproportionately higher percentage of well educated mothers).

  10. Birth Rates by Education Level of Mother

  11. “Would you say you are very happy, pretty happy or not too happy?” Very HappyPretty HappyNot Too Happy Not a HS Grad 27% 54% 18% HS Graduate 29% 59% 12% Bachelors 35% 55% 9% Graduate Degree 39% 51% 9% General Social Survey National Opinion Research Center University of Chicago, 1997 Chance for College by Parental Education for Dependent Family Members 18 to 24, 1987 to 1996 Bachelors Degree or More Percent Entering College Some College “In general, do you find life exciting, routine or dull?” ExcitingRoutineDull Not a HS Grad 35% 52% 11% HS Graduate 46% 49% 4% Bachelors 66% 33% 1% Graduate Degree 70% 30% 0% General Social Survey National Opinion Research Center University of Chicago, 1997 High School Graduate Not High School Graduate

  12. Average Family Income by Educational Attainment of the Householder, 1997

  13. Median Family Income by Educational Attainment of Householder, 1973 and 1997(in 1997 dollars)

  14. Change in Median Family Income by Educational Attainment of Householder between 1973 and 1997(in 1997 dollars)

  15. Discretionary Income as a Proportion of Median Family Income by Educational Attainment of the Head of Household

  16. “During the last few years, has your financial situation been getting better, worse, or has it stayed the same?” General Social Survey, National Opinion Research Center, University of Chicago, 1997

  17. Income Demographics

  18. Where the Jobs Are(Projected U.S. employment 1998-2010)

  19. Wealth and Poverty(High wealth, High poverty and High Equality by US County, 1993)

  20. The Average School Family Husband and Wife and Children • Size of Family 4.0 • Number of Earners 2.0 • Vehicles 2.7 • Percent Homeowner 77% • Income before Taxes $ 52,005 • Source: BLS Consumer Expenditure Survey, 1994

  21. The Gini coefficient • The Gini coefficient indicates the overall distribution of income. • A coefficient of 0 indicates a perfectly equal distribution of income…everyone is middle class. • A coefficient of 1 means one family has all the income and everyone else has none. • So, the higher the coefficient the less equal the income distribution. • The U.S. Gini coefficient rose from .394 in 1970 to .456 in 1994.

  22. The Rich get Richer…(Income quintiles by income range and percent change in income, 1998-94) Census Bureau Data, AD Oct. 96

  23. Middle Income declines, while higher incomes have grown(Number in millions and percent of households by income range) AD, Oct. 96 • In 1996, 64% of Americans felt that the differences in incomes in America were too large. • In 1986, only 55% felt this way. • General Social Survey • National Opinion Research Center • University of Chicago, 1997 Income in 1994 CPI-U-X1 adjusted dollars

  24. Stagnant Wages • Between 1955 and 1970, real wages adjusted for inflation rose by an average of 2.5 percent per year. • Between 1971 and 1994, the average growth of real wages was .3 percent a year. • “Studies have shown that places with a weak middle class are more likely to experience government corruption, voter apathy and a host of social ills.” AD, May, 98

  25. Percent of Household with Incomes of $100,000 or more, 1980-1997(in 1997 dollars) • In 1996, 67% of Americans agreed with the statement: “Both the husband and the wife should contribute to the household income.” • In 1986, only 48% felt this way. • General Social Survey • National Opinion Research Center • University of Chicago, 1997 American Demographics, Jan. 1999

  26. Change in Debt from 1995 to 1998, by Income group

  27. Percent change in Median Net Worth from 1989 to 1998, (in 1998 constant dollars) American Demographics, April 2000

  28. Income Demographic from 1997 to 2020 (in thousand of families) Number of Families (in Thousands) ISACS homepage: (www.isacs.org)

  29. Income Bands as Percent of Total Population When asked the question: “If you were to use one of four names for your social class, which would you say you belong in: the lower class, the working class, the middle class or the upper class?” Lower Class = 6% Working Class = 45% Middle Class = 45% Upper Class = 4% General Social Survey National Opinion Research Center University of Chicago, 1997 Percentage of Families ISACS homepage: (www.isacs.org)

  30. Income Demographic in thousand of familiesfrom $75,000 to over $150,000 Number of Families (in Thousands) ISACS homepage: (www.isacs.org)

  31. Average Household Spending by Age Group Indexed to 100, 1997 Average Total American Demographics April 1999

  32. Percent Change in Average Household Spending by Age Group 1987 to 1997 (in 1997 Dollars) American Demographics April 1999

  33. Average Household Spending

  34. Affording Independent School

  35. Demand vs. Cost • From the 1999 NAIS public opinion poll: “If cost were not a factor, which would you chose for your child?” Responses: 39% public, 30% independent, 28% parochial school (total private =58%). • In a 1995 survey, “57% of parents with children in public school said they would switch to private school if they could afford to do so.” API • In 1971 62% of parents felt that the public school system was preparing their children better than they were prepared, in 1994 only 42% of parents felt that way. • Parent’s confidence in the public school system is declining quickly, and demand for private education seems to be increasing.

  36. *from "Liberal Arts Colleges: Thriving, Surviving or Endangered?": David W. Breneman The Brookings Institution Enrollment Demand, Price and Revenue* Demand High Tuition Price Tuition Revenue (High Tuition Low Enrollment) Tuition Tuition Revenue (Price X Enrollment) Low Tuition Tuition Revenue (Low Tuition, High FP Enrollment) 0 Low FP Enrollment Enrollment Full Paying Students High FP Enrollment

  37. Optimal Enrollment Full Paying Tuition Revenue

  38. Rise in Boarding Tuitions

  39. Boarding Affordability Index

  40. Rise in Day Tuitions

  41. True of independent schools as well...? “Across the country colleges are raising their sticker prices yet they’re losing money. In relative terms, it costs students less to attend college than it did a decade ago because of increased financial aid. The long-term problem is that we have invented a form of education that’s too expensive. Collectively (liberal arts colleges) must decide how to deliver quality education we now deliver, for less money.” Robert Zemsky Founding Director Institute for Research on Higher Education University of Pennsylvania

  42. Families by Total Income:SSS Filers for 1993-94 vs. the 1998-99 Filers Family Income

  43. PC as Percentage of Discretionary Income

  44. Eliminating the 55% Band • Effective for 1999-2000 Processing • Will affect a minority of SSS filers. • Only families above $69,500 total income are subject to this band. • They represent less than 25% of SSS applicants. • Many elect not to enroll and this may improve yields.

  45. Impact of the New Methodology

  46. Current vs. New PC as Percentage of Discretionary Income

  47. Summary of Changes for PY 1999-2000 • The 47% Band will be the top Assessment Band. • Home Equity Value will be capped at Three Times Total Family Income. • The School Report for the 1998-99 Processing Year will include a calculation of the Family Contribution based on these changes.

  48. Responding to Change • Connect impact to other offices with the school • Communicate with financial aid colleagues to discover alternate approaches • Look to NAIS as a resource and as a sounding board • Plan for impact, prepare for needs, proceed with mission

  49. Distribution of Responsibilities for Financing Higher Education, 1952 to 1997 State and Local Government “On the whole, do you think it should be, or should not be, the governments’s responsibility to give financial assistance to college students from low-income families?” Should be: 83% Should not be: 14% General Social Survey National Opinion Research Center University of Chicago, 1997 Students / Parents Federal Government

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