Parental Borrowing for Dependent Children's Higher Education

Using the 1992-1993 Baccalaureate and Beyond Longitudinal Study, with the 1997 follow-up, the parental decision to borrow and, for borrowers, the level of borrowing for dependent children's college education was analyzed. Parents with smaller household size and those being college graduates borrowed greater amounts. White parents borrowed greater amounts than their non-White counterparts. The age of the student, dependent students' income and parents' cash and savings each had a significant negative impact on the amount parents borrowed, while home equity was a significant positive factor. Greater college costs significantly increased parents' decision to borrow, as well as the borrowed amount. Greater amounts of grants significantly reduced the amount borrowed.