Abstract

Michael B. Paulsen j-E Edward P. St. John Examining the Financial Nexus Between College Choice and Persistence During the past two decades there have been fun­ damental changes in the ways states and the federal government finance higher education (McPherson & Schapiro, 1998; Mumper, 1996; Paulsen, 1998; Paulsen & Smart, 2001; St. John, 1994). The federal gov­ ernment has shifted from using grants as the primary means of promot­ ing postsecondary opportunity to using loans for this purpose. Decreases in state support for public colleges and universities have led to increases in tuition charges, which have shifted a larger portion of the burden of paying for college from the general public to students and their families (Breneman & Finney, 1997; Mumper, 1996; Paulsen, 1991,2000). Thus, the last two decades of the twentieth century can appropriately be char­ acterized as a period of high tuition, high aid, but with an emphasis on loans rather than grants. How have these changes in the costs of college influenced the opportunities of students in different income groups to at­ tain a higher education? To address this question we examined the ways that college costs affect the college-choice and persistence decisions of students in