Some of our grown kids take on college debt--and we may help them repay it. Some of us pay for their schooling outright. A recent study from the University of Michigan finds there is a clear connection between parents' home ownership and home equity, and adult their children's college attendance.
The findings suggest, the economists who ran the study say, that sagging college enrollments may be the next nasty fallout from the sub-prime mortgage mess.
The researchers used data from 2005--"during the happy days of the economy," says U-M researcher Frank Stafford. "Mortgages were easy to obtain and rapidly rising home equity led a lot of parents to feel that it was possible to help their children with college expenses."
The study found that, among the 745 families sampled--and even after controlling for parental education--64 percent of the children of home-owners were enrolled in college, compared with 33 percent of renters; 51 percent of children whose parents had less than $25,000 of home equity were enrolled in college, compared with 88 percent of those whose parents had $350,000 or more of home equity.
Bottom line: WIth the downward spiral to the economy and the deep falloff in real estate values, our ability to help our kids with college costs is likely to translate into lower enrollments and delay of college for many of our kids.