The Effect of the Business Cycle on Freshman Financial Aid

38 Pages Posted: 14 Nov 2013 Last revised: 13 Jul 2016

See all articles by Elizabeth Bradley Clelan

Elizabeth Bradley Clelan

University of Georgia - C. Herman and Mary Virginia Terry College of Business - Department of Economics; CNA Corporation

Michael Kofoed

United States Military Academy

Date Written: July 11, 2016

Abstract

When the economy slips into recession, more needy students enroll in college, increasing the need for financial aid while resources for become more scarce. We use "Freshman Survey" data from the Higher Education Research Institute to observe changes in financial aid composition from 1980 to 2000. We use state level tax revenues, unemployment rates, and personal income growth as macroeconomic indicators. During recessions, we find that the burden of financing a student's college education shifts from states and institutions to families and federal programs. We also show that these macroeconomic fluctuations are increasingly volatile for underrepresented minorities.

Suggested Citation

Clelan, Elizabeth Bradley and Kofoed, Michael, The Effect of the Business Cycle on Freshman Financial Aid (July 11, 2016). Available at SSRN: https://ssrn.com/abstract=2353847 or http://dx.doi.org/10.2139/ssrn.2353847

Elizabeth Bradley Clelan

University of Georgia - C. Herman and Mary Virginia Terry College of Business - Department of Economics ( email )

Athens, GA 30602-6254
United States

CNA Corporation ( email )

4825 Mark Center Dr #100
Alexandria, VA 22311
United States

Michael Kofoed (Contact Author)

United States Military Academy ( email )

600 Thayer Rd
West Point, NY 10996
United States
801-540-8789 (Phone)

HOME PAGE: http://https://sites.google.com/site/michaelkofoed1

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