Housing Wealth and College Affordabilitycoach bags, coach bagsvibram shoes, vibram shoeschanel bags, chanel bagsMBT Shoes, MBT shoes

Created: August 31, 2010 18:26 | Last updated: July 31, 2020 00:00

Cornell economist Michael Lovenheim has an amazing study of the impact of housing wealth on college affordability and attendance (PDF). From the study:

Consistent with the prediction that liquid housing wealth should most influence college enrollment, the estimates show housing equity changes had no effect on enrollment in the 1980s and little effect in the 1990s, but between 2000 and 2005, I find a $10,000 increase in housing equity in the 4-year period prior to a household’s child becoming of college-age increases the probability of college enrollment by 0.4 percentage points. This marginal effect translates into a 0.8 percent increase in college enrollment for each $10,000 increase in housing wealth. Since real average home equity rose by $57,965 between 2001 and 2005, my estimates imply a 4.6 percent increase in college attendance due to increased home equity over this time period. These estimates point to the importance of housing wealth in driving college enrollment post-2000.

Essentially, during the housing boom, families recognized enormous gains in housing wealth. That increase in wealth led to more children going to college — with a particularly outsize effect among lower-income families that might have struggled more with tuition.