Students pursue greater number of funding sources for higher ed

A recent study published in the Journal of Higher Education reveals that a college graduate’s mix of funding sources may reflect when they were born and how likely they were to obtain a graduate degree. A look at three cohorts of college graduates, those born in 1953-1962, 1963-1972, and 1973-1982 showed that the proportion of students who utilized one or two sources to fund their education decreased, while those who used three or more increased. Additionally, those in the most recent cohort who used more sources were found to be less likely to obtain a graduate degree compared to those who were fully funded by their families.

The study’s authors, Byeongdon Oh and ChangHwan Kim, analyzed the association between students’ mix of undergraduate funding sources and graduate degree attainment using the 2013, 2015 and 2017 National Survey of College Graduates. They provide background gathered from previous research that documents the roles of different funding source in students’ educational outcomes, finding for example, that while family support is one of the most common funding sources, it does not necessarily lead to improvement in students’ grades, but is positively associated with completing a bachelor’s degree. Additionally, borrowing more than $10,000 that is related to a lower likelihood of degree completion.

The authors note that various changes in educational and financial institutions necessitated students using multiple funding sources, which changed over time. In the 1960s and 1970s college was more affordable, allowing students to rely on “simple funding strategies” such as family contributions, work-study or student employment options. But as college costs soared more rapidly than median family income and state support for higher education declined, beginning in the 1980s additional funding sources became more necessary. Debt-dependent and multisource-seeking strategies have become more common in the younger cohort.

The association between undergraduate funding sources and graduate degree attainment has also changed over the cohorts. Students in the oldest cohort who used multiple funding sources were found to be more likely to obtain a graduate degree relative to those that were family-funded. But this was less likely in the youngest cohort, implying that the rise in multiple sources of funding is associated with growing financial stress, the paper states.

“Rising tuition may have transformed the mobilization of multiple sources into a choice made out of desperation,” it notes, saying that result is consistent with recent studies “that cast doubt on the role of college as the great equalizer.”

The authors posit that students mobilizing multiple funding sources becoming less likely to obtain a graduate degree compared to those fully funded by their families may be due to the change in funding composition, with more students seeking loans, which are negatively associated with graduate degree attainment.

More information can be found at Byeongdon Oh et al, Changing Undergraduate Funding Mix and Graduate Degree Attainment, The Journal of Higher Education (2023). DOI: 10.1080/00221546.2023.2171210.