Annual Household Income On College Essay
There comes a time when some families must make the decision of whether or not to send a child to college. There are many benefits to a college education that become noticeable throughout a person’s life such as a higher salary than those of an individual without a college degree. College may also produces a multitude of long term setbacks to overcome with the largest being debt. Therefore the family must consider a college quality versus its price and their willingness to pay based on the household annual income. Quality of a college here includes average starting salary after 4 year and rate of employment after college. In this paper we will consider both the value of college to a given American family and the cost of tuition to attend a 4 year college without considering financial aid. The table below depicts the average tuition and fees for colleges in 2016-2017
For the purpose of this paper we will be categorizing colleges based on price ranges as follows: Cheap < $20,000, Mid-range $25,000 - $40,000, Expensive > $40,000, and schools in each category has around the same level of education.
Income Elasticity of Demand:
As income increases for a family the value of a more expensive college increases. A high-income family tends to send their kids to more expensive and more reputable colleges. Vice versa, a low-income family can only afford sending their kids to a cheaper college. According to…