Housing Wealth, Credit Availability, and College Enrollment

Household wealth and liquidity are key factors in individuals' college enrollment choices. Therefore we investigate the impact of housing wealth, credit availability and financial distress on college enrollment decisions. We find that housing wealth is negatively related to enrollment in public schools and positively related to enrollment in private schools. Thus, this evidence suggests that students choose to substitute away from private schools towards public institutions as housing wealth declines. This is in line with the fact that the cost of attendance is, on average, much lower for public schools than private schools