Willingness to pay and preference for private institutions

This study focuses on the correlates of student preference for private institutions over public institutions in their senior year in high school, with a particular focus on the effects of students' subjective responses to tuition costs and to financial aid availability. The data for this study were drawn from a longitudinal study of postsecondary educational choice of high school students in the state of Indiana. The results indicate that in addition to student and family background and student academic characteristics. students' subjective responses to tuition costs and to financial aid availability have a substantial linkage with student preference for private or public institutions. This study suggests that family and ascribed characteristics alone do not explain student preference for the type of postsecondary institution. Students' subjective responses to tuition costs and to financial aid availability are also directly related to student preference for a certain type of postsecondary institution, independent of student family background and academic characteristics. This suggests that the willingness to pay, not only the ability to pay, plays a direct role in student college choice decisions. The implications for policy making are discussed.