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I
I

73-12,670
BEKKERING, James Robert, 1942A STUDY OF EDUCATION RELATED EXPENSES INCURRED
BY FULL-TIME UNDERGRADUATE STUDENTS ATTENDING
REPRESENTATIVE COLLEGES AND UNIVERSITIES IN
MICHIGAN.
Michigan State University, Ph.D., 1972
Education, higher

U n iv e rs ity M icro film s. A XEROX C om pany , A n n A rb o r. M ic h ig a n

A STUDY OF EDUCATION RELATED EXPENSES
INCURRED BY FULL-TIME UNDERGRADUATE
STUDENTS ATTENDING REPRESENTATIVE
COLLEGES AND UNIVERSITIES
IN MICHIGAN
By
James Robert Bekkering

A THESIS
Submitted to
Michigan State University
in partial fulfillment of the requirements
for the degree of
DOCTOR OF PHILOSOPHY
Department of Administration and
Higher Education
1972

PLEASE NOTE:

Some p a g e s may h a v e
i nd i s t i n e t
Filmed

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ABSTRACT

A STUDY OF EDUCATION RELATED EXPENSES
INCURRED BY FULL-TIME UNDERGRADUATE
STUDENTS ATTENDING REPRESENTATIVE
COLLEGES AND UNIVERSITIES
IN MICHIGAN
By
James Robert Bekkering

One of the most important facets of financial aid
administration is the determination of student financial
need.

Basically,

this process normally involves a compari­

son of financial resources available to the student from
his parents and through his own efforts with the total
cost of attending the college of his choice for one year.
This total cost figure is often referred to as the student
budget.
The purpose of this study was to examine the educa­
tion related expenses incurred by various classifications of
full-time undergraduate students attending three types of
colleges and universities in Michigan.

Actually, two

independent, but related, analyses were performed on data
collected from students who were
upon, or

(1) financially dependent

(2) financially independent from, their parents.

James Robert Bekkering
Analyses of the data supplied by financially
dependent students revealed several major findings.

Type

of higher education institution attended did not substan­
tially affect the mean reported variable expense level,
while residency arrangement of the students did affect the
expense level.

A n interaction effect was also found to

exist between the institution and residency variables.
Three of the four mean expense levels reported by students
in various residency arrangements significantly varied from
the counterpart levels used by the Michigan Department of
Education.

Only dormitory residents reported expenses in

line with Department figures.
Analyses of data supplied by independent students
also provided major findings.

Institution attended did

not affect the m ean reported variable expense level, but
family size did have an effect.
when taken together,
of expenditures.

However, the two variables,

did not appear to influence the level

Only two of the five mean expense levels

reported by independent students with various sized family
units

(married-no children and married-one child)

varied

significantly from the expense levels recommended as
reasonable for them by the U.S. Office of Education.
It is hoped that the results of this study provide a
base from which more sophisticated research can be accom­
plished in the future, with the goal of developing fair,
objective, and consistent student budget figures.

James Robert Bekkering
Financially dependent students w ere classified by institution
attended

(public junior/community college,

two and four year

private colleges and universities, or four year public
institutions)

and residency arrangement

parents, or other off-campus housing).

(dormitory, with
Financially

independent students were classified by institution attended
(same as above)

and size of family unit

(single-no children,

married-no children, married-one child, married-two children,
married-three or more c h i l d r e n ) .
For financially dependent students, analysis of
variance was used to determine the effect of institution
attended,

residency arrangement,

and their interaction,

upon

the mean level of education related expenses incurred during
the 1971-72 academic year.

Several applications of the t-

test were employed to provide comparisons between actual
student expenses and expense levels for the same cost items
used by the Michigan Department of Education in determining
financial need for financially dependent students.
For financially independent students,

analysis of

variance was utilized to determine the effect of institution
attended,

family size of respondent,

and their interaction,

upon the mean level of education related expenses incurred
during the twelve month period, September,

19 71-August,

Several applications of the t-test were also applied to
this data to provide comparisons between actual student
expenses and expense levels for the same cost items
considered reasonable by the U.S. Office of Education.

197 2.

TABLE OF CONTENTS
Page
LIST OF T A B L E S ........................................

v

LIST OF F I G U R E S ............................................ vi
Chapter
I.

II.

THE P R O B L E M .....................................

1

Need
. . .
Purpose of the S t u d y ...........................
Hypotheses
.....................................
Overview
...........................
Definition of Terms
...........................

1
2
4
5
6

REVIEW OF THE L I T E R A T U R E ........................

8

Introduction .....................................
8
The R e v i e w .....................................
9
Early B e g i n n i n g s ..............................
9
Civil War P e r i o d ....................
11
Impact of Federal Government .................
16
1960 and Beyond
........................ 22
Student Budgets
..............................
27
S u m m a r y ............................................ 34
III.

DESIGN OF THE S T U D Y ............................... 39
Introduction .....................................
39
The Population and S a m p l e ........................ 40
Instrumentation
........................ 43
Collection of the D a t a ........................... 49
Analysis of the D a t a ............................... 55
Financially Dependent Students
.............
55
Financially Independent Students
. . . .
58
S u m m a r y ................
61

ii

Chapter
IV.

V.

Page

ANALYSIS OF THE D A T A .......................... 62
Introduction .....................................
Analysis of the D a t a ..........................6 3
General Review of Expenses on Per Item Basis
.
S u m m a r y ....................................... 84

79

SUMMARY, CONCLUSIONS, DISCUSSION AND
RECOMMENDATIONS .................................

88

Introduction .....................................
Summary and Conclusions . . . . . . . .
Discussion and Recommendations . . . . . .

88
88
98

BIBLIOGRAPHY

62

........................................... 101

APPENDIX

10 4

iii

LIST OF TABLES
Table
3.1
3.2
3.3
4.1
4.2
4.3

Page
Summary of Participating and Selected but
Non-Participating Institutions
.............

42

Record of Participation in the Study by
Colleges and Students
.......................

52

Summary of the Characteristics of the
R e s p o n d e n t s ....................................

53

Analysis of Variance for Financially
Dependent Students
...........................

65

Cell Means for Financially Dependent Students

.

Comparison of Reported Costs of Financially
Dependent Students and Costs Used by Michigan
Department of E d u c a t i o n .......................

67

70

4.4

Analysis of Variance for Financially Independent
S t u d e n t s ............................................ 74

4.5

Weighted Means for Family Units of Financially
Independent Students ...........................

74

4.6

Comparison of Reported Costs of Financially
Independent Students and Costs Recommended
by the U.S. Office of E d u c a t i o n ............ 77

4.7

Mean Expenses of Dependent Students by Type of
Institution and Residency Arrangement:
FourYear Public Institutions
....................

4.8

4.9

80

Mean Expenses of Dependent Students by Type of
Institution and Residency Arrangement:
Two
and Four-Year Private Institutions . . . .

80

Mean Expenses of Dependent Students by Type of
Institution and Residency Arrangement:
Two
Year Community/Junior Colleges
.............

4.10 Mean Expenses of All Independent Students by
Marital Status and Number of Dependents
.
iv

81
.

82

LIST OF FIGURES
Figure
4.1

Page
Graph of the Interaction in Analysis of
Variance for Financially Dependent Students ,

V

67

CHAPTER I
THE PROBLEM
Need
An important aspect of college student financial aid
administration is the determination of financial need,

for

it is usually financial need, rather than any other single
criterion, that determines the amount of money a student
is eligible to receive in financial assistance for a given
academic year.
Determination of financial need, in turn, consists
of three procedures:

(1) determining an amount of money

which the student and his family can reasonably be expected
to contribute toward educational expenses for a particular
school year;

(2) ascertaining the amount of money which is

normally required to meet education related expenses during
the same school year; and

(3) subtracting the expected

family contribution from the cost of attending the college.
If the difference is a positive figure, it represents the
amount of money which the student in question is eligible
to receive in the form of financial aid.

If the difference

is zero or a negative figure, the resources available to
the student from his family meet or exceed the annual total
cost of attending his college or university.

2

The determination and analysis of the family
contribution, or ability to pay, has undergone a great
deal of study and is now a very scientific, sophisticated
procedure.

Unfortunately,

the same cannot be said for the

determination of costs associated with college attendance,
commonly referred to as the student b u d g e t .

There is no

commonly accepted procedure by which institutions of higher
education can ascertain how much money is required
on the average)

(even

over the course of an academic year to

afford their students not only physical necessities but
some degree of psychological comfort as well.

As this

side of financial need analysis is as critical as the
determination of family contribution, the need for syste­
matic, scientific research in the area becomes clearly
evident.

That considerable attention is now being

directed to the topic is pointed out by the fact that
this study was carried out with the cooperation of and
substantial financial support from the Michigan Student
Financial Aid Association and the State of Michigan
Department of Education.
Purpose of the Study
The purpose of this study is to analyze the spending
patterns of various classifications of full-time under­
graduate students attending three types of institutions of
higher education in Michigan.

Actually, two independent,

but related, analyses are performed on data collected

3
from various classifications of financially dependent and
independent students, respectively.

Financially independent

students are defined as those whose parents or legal
guardians did not claim them as federal income tax exemp­
tions in either 1970 or 1971, and whose parents or legal
guardians did not provide more than $200 in support,
including value of room and board, during either 1970 or
1971.

Financially dependent students are those who either

were claimed as dependents or received more than $200 in
support during either 1970 or 1971.
For financially dependent students, living arrange­
ments and type of school attended
year private,

(4 year public,

2 year junior or community)

2 or 4

are analyzed for

the purpose of determining if either of those variables
affects the amount of money spent for variable expense
items.

(Variable expense items are those over which the

student has some discretion in determining the amount of
money to be spent for them.)

The average variable

expenses reported by students in each residency arrangement
are compared with dollar estimates for the same expense
items used by the Michigan Department of Education in order
to see if a discrepancy exists between them.
For financially independent students, number of
students1 dependents and type of school attended are
analyzed for the purpose of determining if either of
those variables affects the amount of money spent for

4
variable expense i t e m s .

The variable expenses reported

by students with the various numbers of dependents are
compared with dollar estimates for the same expehse items used
by the U.S. Office of Education in order to see if a
discrepancy exists between them.
Hopefully, this study also provides the groundwork
from which more sophisticated research will be generated
in the future, something which at this time is totally
lacking in the area of student expenses and student budget
determination.
Several questions arise in regard to the investi­
gation at hand to which the following hypotheses address
themselves.

The hypotheses are stated in broad, research

form here, and are transposed to the null form in Chapter
IV, for testing purposes.
Hypotheses
Hypothesis 1:

For full-time undergraduate students
financially dependent upon parents or
guardi 2ins, there will be a significant
difference in reported mean variable
expenses among institutional types.

Hypothesis 2:

For full-time undergraduate students
financially dependent upon parents or
guardians, there will be a significant
difference in reported mean variable
expenses among the three types of
residency arrangements.

Hypothesis 3:

For full-time undergraduate students
financially dependent upon parents or
guardians, there will be an interaction
effect between the various types of
institutions and residency arrangements.

5
Hypothesis 4

The reported mean variable expenses
incurred by dependent students in
each of the three types of residency
arrangements will significantly differ
from the variable expense figures
utilized by the Michigan Department
of Education.

Hypothesis 5

For financially independent, full-time
undergraduate students there will be a
significant difference in reported mean
variable expenses among institutional
types.

Hypothesis 6

For financially independent, full-time
undergraduate students there will be a
significant difference among reported
mean variable expenses, as the number
of individuals dependent upon the
respondents, increases.

Hypothesis 7

For financially independent, full-time
undergraduate students there will be an
interaction effect between the various
institution types and number of students'
dependents.

Hypothesis 8

The reported mean variable expenses
incurred by independent students in each
of the number of dependents categories,
will significantly differ from the
variable expense figures used by the
U.S. Office of Education.
Overview

As very little research has been done on the
subject of college student expanses, and little has been
published as well, much of the literature reviewed in
Chapter II is tangentially related to the research topic.
The general historical development of financial aid
administration at the campus level is presented to provide
a basic understanding of this rapidly developing area and
how the research topic relates to it.

Also, concluding

6
Chapter II is a discussion of the literature which pertains
more specifically to the topic of college student expenses.
In Chapter III the sample for this study is
described,

as are the methods used for testing for r elia­

bility of the instrument,

and the design and analysis

utilized.
Included in Chapter IV is the analysis of results
for this study, with a summary of the findings, conclusions,
discussion, and implications for future research presented
in the concluding Chapter V.
Definition of Terms
Financial Need
The amount of money by which total cost of college
attendance for a particular academic year exceeds the
contribution which the student and his parents can be
expected to make from family income and assets.
Student Budget
Total out-of-pocket cost for college attendance per
academic year.
Financially Dependent Student
One whose parents or legal guardians claimed him
as a federal income tax exemption in either 1970 or 1971
or whose parents or legal guardians provided more than
$200 in support, including value of room and board, during
either 1970 or 1971.

7
Finandially Independent Student
One whose parentB or legal guardians did not
claim him as a federal income tax exemption in either 19 70
or 1971, and whose parents or legal guardians did not
provide more than $200 in support, including value of room
and board, during either 1970 or 1971.
Variable Expense Items
Items over which the student has some discretion
in determining the amount of money to be spent for them
(examples— d o t i n g ,

entertainment, books and supplies,

transportation).
Residency Arrangement
For the purpose of this study, pertaining only to
financially dependent students:
(2) residing with parents, or
campus housing.

(1) living in dormitory,

(3) maintaining other off-

CHAPTER II
REVIEW OF THE LITERATURE
Introduction
The administration of student financial aid programs
on college and university campuses during the past several
years has become a complex task, requiring a high degree of
coordination, and involving issues other than those of a
strictly financial nature.

The current emphasis upon equal

educational opportunity and involvement in the student aid
field by federal and state governments have provided
institutional aid officers with an opportunity to demon­
strate more than proficiency for a particular type of
accounting function.

The huge sums of money they control

and the increasingly egalitarian posture being assumed by
higher education, combine to force the college financial
aid community to become active in the phenomenon called
Social Responsibility.
Perhaps the most important facet of financial aid
administration is the determination of financial need, for
it is the process that reveals how much, if any, money
student applicants are eligible to receive in various
forms of assistance.

This study deals specifically with

one phase of financial need determination:

the various

9
costs associated with college attendance over the course
of a year.
In order to facilitate a better understanding of
the research topic and how it relates to the larger
financial aid arena, the general historical development of
student aid in America is presented in this chapter.

The

scope of the literature gradually narrows to include
issues closely related to this study so that the following
chapters lead quite naturally from it.
The Review
Early Beginnings
The earliest programs of financial aid were begun
with funds provided to colleges by private individuals
during the colonial period of our country's history.

This

money was specifically intended to help needy and worthy
students, and in many instances was supplemented by alloca­
tions from the general funds of the institutions themselves.
The first recorded scholarship fund was established in
164 3, when Lady Ann Mowlson gave Harvard College "the full
and entire somme of hundred pownds current English mony."^
Rudolph concurs that this was a precedent setting act in
American higher education and labels it "an act of Christian

W i l l i a m D. VanDusen, "Toward a Philosophy of
Student Financial Aid Programs," NASPA Journal, IV, No. 1
(July, 1966), 3-7.

10

benevolence."

2

From this beginning,

financial assistance

for college students had as its base the notion of assist­
ance to those who would have been unable to attend college
without it.

VanDusen puts it this way:

"As the term

scholarship was used initially in connection with student
financial aid, it meant a gift of money granted to a student
who could not otherwise afford to attend college."

3

This original emphasis upon need continued through
the years until the 1940's, although during much of that
time alterations and variations of aid programs were
instituted by the growing numbers of collegiate institu­
tions.

These alterations were intended to serve both

institutional and national purpose, while at the same time
enabling needy students to attend college.

In addition to

private individuals, state governments also entered the
field.

Rudolph reports that on over one hundred occasions

before 1789 the General Court of Massachusetts appropriated
funds for Harvard College and that Harvard, Yale and
Columbia could not have survived the colonial period
4
without the help of the state.
Whether directly or
indirectly,

state financial support for colleges during

2
Frederick Rudolph, The American College and
University (New York:
Alfred A. knopf, 1962) , p. 178.
3

William D. VanDusen, A Design for a Model College
Financial Aid Office (New York!
College Entrance
Examination Board, T968), p. 2.
4
Rudolph, The American College and University,
p. 185.

11

this precarious time in their history constituted state
support to students as well.

However, continues Rudolph:

In the years after 1820 the sectarian spawning of
colleges and the tendency of many institutions to
draw students from beyond state boundaries had the
effect of diminishing the partnership of state and
college, thus emphasizing the private rather than
the public nature of the colleges.^
Civil War Period
Upon completion of the Civil War an apparently
unending number of small colleges was formed, most under­
nourished and all soliciting limited funds.

In an effort

to collect funds to erect buildings or to augment endow­
ments, many colleges authorized their agents to sell
perpetual scholarships for the college, entitling the owner
to free tuition for one person in perpituity.

Rudolph

describes this project as "harebrained" and records the
following:
The perpetual scholarship scheme was a particularly
attractive idea to the colleges because it promised
to solve their basic problems:
it would give the
colleges the funds that they badly needed in order
to stay open, and it would provide them with an
immediate supply of students who would justify
their being open at all.
Of course, like so many other get-rich-quick
schemes to which Americans turned in the nineteenth
century, the perpetual scholarship did not work.
. . . Not only were the collected funds
frittered away, but great numbers of tuition-free
students now knocked at college doors and became
one more drain on limited resources.
The situation
at DePauw became so unwieldly that in 1873, in
order to invalidate the perpetual scholarships
5Ibid., p. 187.

12

sold in earlier days, the college simply adopted
a universal policy of free tuition and substituted
a schedule of miscellaneous fees.6
It requires a high degree of imagination to con­
ceptualize the perpetual scholarship plan as being based
upon student need, but it illustrates one extreme example
of deviation from the generally accepted concept of need
oriented financial aid.

The plan, very obviously, was

established to serve the self-interests of the institution,
and any benefits accruing to the students were of a
secondary nature.
However, more examples of adherence to the need
concept are found in the literature pertaining to this
period than deviations from it.
successful,

Although not always

their intentions were good.

Such was the case

with the manual-labor movement of the 1830's, which
theoretically made going to college self-financing, gave
students experience in practical skills, and even paid
some attention to their physical condition.

Rudolph,

in

another publication, describes some attempts to help needy
students pay their way through c o l l e g e :
The farms operated by the colleges usually lost
money; the students malingered; the mechanical
shops were underequipped; at Marietta College and
Ohio University the students made so many wooden
barrels that they glutted the market.
6 Ibid., pp. 191-192.
7
Frederick Rudolph, “The Origins of Student Aid in
the United States," Student Financial Aid and National
Purpose (New York:
College Entrance Examination Board,
1962), pp. 1-11.

13
Another unsuccessful attempt at meeting the rising
tide of democracy involved the old eastern colleges burdened
by high board costs.

In 18 27 Yale put into operation a

dining hall especially for poor students,
Princeton in 1831 and Brown in 1832.

followed by

The implications of

inferiority contained in these second-class operations made
0
it difficult to attract prospective students.
Through all of these attempts to help students
financially during the decades preceding the Civil War
shone the true, enduring and fundamental source of
assistance.

This way was found in the whole pattern of

underpayment and nonpayment of professors who recognized
their own sacrifices, in the accumulating unpaid student
fees, in the custom of tuition remission,

and in countless

similar other devices, the means of keeping low the cost
g
of a college education.
As a result, the burden of
student financial aid rested squarely on the shoulders of
the professors.
The conclusion of the Civil War brought with it
the spawning of the Industrial Revolution in America, a
corresponding movement for technological and scientific
education, and the creation of a whole new network of
higher education institutions:

the land-grant colleges.

Financial need still appears to have been the underlying
8Ibid.
9Ibid.

14
principle in awarding aid to students, as evidenced in the
statement made by Harvard President Eliot in his inaugeral
address of 1869:

"No good student need ever stay away

from Cambridge or leave college simply because he is poor.11
Referring to the same time period and beyond, VanDusen
writes:
The continued emphasis on the need of the student
as a criterion for selection for assistance during
those years was evidenced by the establishment of
funds by fraternities for indigent members, the
arrangement of textbook loans for needy students,
the operation of special dining halls for the
poor, and the introduction of manual labor programs
for students.
An early example of the poor being
given first preference in locating term-time jobs
was the establishment at Yale in 1900 of the
"Bureau of Self Help" to assist needy but ambitious
stude n t s .11
The development of student financial aid from the
post— Civil War period until the end of World War II is
sketchy and unclear, but three distinct types of aid seem
to have emerged:

the scholarship or grant, the loan, and

part-time on-campus or off-campus employment.

Mueller

describes some of the activities during this sparsely
recorded period in the history of student aid as follows:
During World War I the public became educated to
the use of subsidies to solve the economic problems
of both individuals and the nation.
The depression
of the thirties accelerated many kinds of social
planning:
statewide scholarship projects; federal
Richard Hofstadter and Wilson Smith, American
Higher Education:
A Documentary History {Chicago:
University of Chicago Press, 1961), I , p . 613.
11

VanDusen, Model Office, p. 3.

15
underwriting of student employment (NYA); appeals
to benefactors of all kinds, including industry,
alumni, religious and club groups and large-scale
co-operative housing projects and work study
p r o g r a m s .12
Through all of this seems to be running the con­
sistent theme of financial need, however determined.
Additional support for that theme is found in Eliot's
statement in his book, University Administration, written
in 1908 :
In Harvard College . . . there are both honorary
and stipend scholarships, an honorary scholarship
being conferred on every student, having no need
of pecuniary aid, who stands as high as, or higher
than, the lowest scholar in his class who receives
a stipend scholarship.13
This original emphasis on financial need continued
essentially unchanged until the post World War II period.
Exceptions to this general pattern were instituted
usually to serve national or institutional purposes such
as recruiting students for specific purposes such as
medicine or education and other vocational areas critically
short on manpower at the national level, or to achieve
socio-economic, geographical, or other desired balance at
I4
the institutional level.

12 Kate H. Mueller, S tudent Personnel Work in Higher
Education (Boston:
Houghton Mifflin C o . , 1961), p. 468.
13
Charles W. Eliot, University Administration
(Boston:
Houghton Mifflin C o . , 1908), p. 215.
14
VanDusen, Model Office, p. 2.

16
Impact of Federal Government
With the closing of World War II, and the enactment
of the Servicemen's Readjustment Act of 1944, known
familiarly as the G.I. Bill, financial assistance to
college students took a new direction.

This program was

established to help students whose education had been
interrupted by the service to accelerate their adjustment
to civilian life.

Undoubtedly, many veterans who, before

their military service, had had no intention of going to
college became interested and were able to attend as a
result of the money provided.

For, as Mueller writes:

"The G.I. Bill subsidized so many veterans and involved
such a large proportion of the citizenry in educational
grants that public suspicion changed to public demand
almost overnight." 15

In 1946, 52 percent of all college

degree seeking students were veterans, receiving assistance
through the G.I. Bill; in 19 47 they were 53 percent;

44

percent in 194 8; 37 percent in 1949; and 27 percent in
1950.16
The percentages revealed above give some indication
of the impact that the G.I. Bill had on higher education
in this country.

Funds were generally available to

veterans for the customary cost of tuition, laboratory,
15Mueller, p. 468.
16Elmer D. West, Financial Aid to the Undergraduate
(Washington, D.C.:
American Council on Education, 1963),
p. 79.

17
library, health,

infirmary, and like fees, as well as for

books, supplies, equipment and other necessary expenses.
Expenses not covered by the Bill were those for b o a r d ,
lodging, other living expenses, and travel.

A thorough

discussion of the Servicemen's Readjustment Act of 1944
can be found in the following source:

Veteran's Rights

and Benefits, by M. A. Erana and Arthur Symons.
Through this Bill,

for the first time there was

an enormous supply of funds, the purpose
not to aid the talented or the needy,
reward scholarship.

for which was

or to enhance or

The primary criterion was status

as a veteran.
A direct result of this program was that institu­
tional funds for which there had been previously a heavy
demand, were directed toward new purposes.

Many institu­

tions found that the amounts of scholarship funds that
previously had been used to support needy students were
no longer required for that purpose, and those colleges
began to use their funds to attract and award students
possessing academic or other special talents with little
or no regard to the financial conditions of such
individuals.

In this regard, VanDusen has written:

The term schloarship thus gained the additional
meaning of a gift 6f money used to reward
talented students, and the public at large
became familiar with such phrases as academic
scholarship, athletic scholarship, and music
scholarship.1 ^
17

VanDusen, Model Office, p. 3.

18
West concurs with VanDusen, for he has written the
following in reference to the 19 46-19 56 decade:
There is a substantial opinion to the effect . . .
that the neediest segment of the population is not
getting the financial aid; in fact, there is con­
siderable evidence to prove that children
receiving financial aid come from families with
above-average income . . . .
It should be noted that many scholarships
were actually prizes for high scholarship.
Thus
an award may be made to a high school valedictorian
whether or not he needs the money, or a prize may
be given to a very successful student in college
simply by virtue of his high academic standing.1 ®
Rudolph is particularly caustic about this turn of
events in the development of student a i d :
Under the aegis of intercollegiate athletics
student aid became a form of employment.
And if,
as is unquestionably true, athletic scholarships
eventually enabled a whole generation of young
men in the coal fields of Pennsylvania to turn
their backs on the mines that had employed their
fathers, it is also true that athletic scholar­
ships intruded a new dimension of confusion and
dishonesty into the life of the American college
and university. ®
These developments in student aid administration
during the post World War II period illustrate clearly
that institutional funds were being utilized to serve
institutional purposes, and any benefits which accrued to
the students were only incidental in nature.

As late as

19 56 it was assumed that students would not borrow for an
education, and, although the College Scholarship Service
had come into existence by that time, it was assumed that
l ft
19

West, pp. 77-78.
Rudolph,

"The Origins of Student Aid," p. 9.

19
there was no way of measuring with any degree of accuracy
an applicant's financial need.

Morse reflects upon the

1956 scene this way:
I came to the conclusion then that often the answer
to how and why scholarships are awarded was really
just this:
to serve institutional purpose . . . .
It is a fact that colleges devote their
scholarship funds in direct proportion to those
talents they most highly prize, and that in
general they use their funds to strengthen those-g
parts of their programs they feel to be weakest.
Orwig writes:
Indeed, financial aid to students has served a wide
variety of purposes over the y e a r s , from rewarding
intelligence, academic performance, service to the
country, physical appearance and beauty, and
athletic prowess to attracting students to critical
skill areas, from different geographic areas, and
to military service.21
However, during the same period referred to above
by VanDusen and West, several eastern colleges and uni­
versities recognized that intense bidding for talented
students was developing, and wished to bring this unfor­
tunate turn of events to a halt.

Through the consolidated

efforts of these instituitons the concept of financial need
again emerged on the student aid scene and is described by
Orwig:
20

John F. Morse, "The Impact of Government
Programs on Student Aid Administration," Student Financial
Aid and Institutional Purpose (Princeton:
Entrance
Examination Board, 1963) , <5-16.
21

M. D. Orwig, Toward More Equitable Distribution
of Student Financial Aid Funds:
Problems in Assessing
Student Financial Need (Iowa City:
American College
Testing Program, 197i), p. 2.

20

The development [of the concept of financial need]
began in the Northeast through a loose consortium
of private colleges that desired, through c o o p e r a ­
tive agreement, to voluntarily limit the amount of
financial aid that would be used to recruit
academically talented students to the c a m p u s . To
do this they developed a procedure, later called
need analysis, that would enab l e them to determine
a reasonable contribution from the student and his
family and limiting the scholarship offered to the
student to the amount of his financial need, i.e.,
the difference between the family contribution and
the cost of attending an institution.
By voluntarily
using the same need analysis procedure, colleges
were able to minimize financial competition as a
means to attract students to their c a m p u s . ^ 2
This concern and cooperative effort led in 1954 to
the creation of the College Scholarship Service

(CSS) , a

branch of the Col le ge Entrance Examination Board.

CSS

was charged w i t h the responsibility for developing an
instrument that w o u l d fairly, objectively, and eq uitably
m easure the financial strength of families whose children
were applying for financial assistance to attend college,
and which could be used consistently by all institutions.
The product of their efforts was the Parent's C o nfidential
Statement

(PCS), w h i c h throughout the years, has b e e n

refined tremendously,

and is still the most w i de l y used

financial need analysis instrument.
The chief competitor of CSS in the financial need
analysis field is the American C o l l e g e Testing Program,
w h i c h developed an instrument in 1967 as a result of
actions described b y Orwig:
22I b i d . , p . 2.

21

. . . in 1967 ACT (The American C o l le ge Testing
Program) introduced a centralized student need
analysis service w h ic h institutions could use to
analyze the financial need of their aid appli­
cants.
Although somewhat different in approach
than CSS, the ACT system was similar in that it
processed and computed the financial need of
individual students who were applying for aid
and sent a need analysis report to the institu­
tions designated by the student.2 3
In 19 58 the federal government re-entered the
financial aid arena through the establishment of the
National Defense Student Loan Program,

authorized by the

National Defense Edu ca ti o n Act, passed in the same year.
In contrast to the G.I.

Bill, this p r o g r a m required that

student borrowers with high promise entering critical
fields

(science, engineering, education)

preference when dispersing these loans.

be given
At first,

fi nan­

cial need was not a primary factor in determining borrower
eligibility, but as time passed and new federal programs
were implemented, need became the most important e l i g i ­
bility criterion.
The National Defense Student L o a n

(NDSL) P r o g r a m

was a major student financial aid e f f o r t by the federal
government.

VanDusen reports that the results of the NDSL

Program were d r a m a t i c , particularly w h e n compared to the
success of other established, private loan p r o g r a m s .
was estimated that p r io r to the N DS L Program,

$26 m i l li on

was available in loan programs, but o n l y 50 percent of
2 3I b i d . , p . 4.

It

22

such funds was being used.

While those data might have

seemed to reveal a reluctance on the part of college
students to borrow, the NDSL Program in its first full
year of operation advanced more than $60 million to
24
students.
Cole has labeled the enactment of the National
Defense Education Act as one of the two most significant
developments in the financial aid field, the other being
the creation of the College Scholarship Service in 1954.

25

1960 and Beyond
The decade of the sixties brought with it a social
consciousness and a sense of social responsibility affecting
much of American society.

A very large part of this move­

ment affected higher education;

specifically, equal access

to higher education and education opportunities.

Not to

be denied a critical role in this massive movement, the
federal government soon created and funded two more major,
comprehensive financial aid programs to be administered by
the colleges.
The first of these programs was the College WorkStudy Program

(CWSP), authorized by the passage of the

Economic Opportunity Act of 1964.

VanDusen has provided

an excellent synopsis of the College Work-Study Program:
^ V a n D u s e n , Model O f f i c e , p. 4.
25
Charles C. Cole, Jr., "Future Directions for the
College Scholarship Service," Student Financial Aid and
Institutional Purpose (Princeton:
College Entrance
Examination B o a r d , 19*63), 17-28.

23
This program combines federal and college funds
to encourage and to extend the employment of
students, both on the campus and in non-profit
off-campus agencies.
Collegiate institutions
that participate in the College Work-Study
Program are required to maintain, from their
own funds, their previous level of student
employment . . . . Initially the CWSP was
restricted to students from extremely low-income
families; these severe limitations have since
been revised, and now it is required only that
preference in employment be given to students
from low-income f a m i l i e s . 2 6
The other major federal aid program administered by
the colleges is the Educational Opportunity Grant Program
(EOG), authorized by the Higher Education Act of 1965,
the law which also centralized the administration of
sponsored student aid activities in the U.S. Office of
Education.

Again, a synopsis by VanDusen:

This program authorizes direct grants, which are
not to be repaid, to students who demonstrate that
they and their families are unable to pay for
higher education.
The grants may not exceed $80 0
or one-half the amount the student needs to go to
college, whichever is less, and a matching amount
must be made available to the student from other
approved sources of student financial aid.27
Since VanDusen wrote the above descriptions
several changes have occurred in all three of the federal
programs administered by the colleges, including raising
the maximum EOG to $1,000.

However,

the spirit of these

programs has remained basically unchanged, and it is
significant to note that regarding disbursement of funds,
26

27

VanDusen, Model O f f i c e , p. 4.
Ibid.

24
all three programs have placed the emphasis upon financial
need as opposed to superior academic achievement or
promise.
In June, 1972, a new, massive Higher Education Bill
was signed into law by President Nixon.

This Bill con­

tinues and expands existing federal student aid programs,
as well as providing direct grants to institutions of
higher education.
In 1964, and again in 1966, the Michigan Legisla­
ture created and funded two state-sponsored, comprehensive
student aid programs, the Michigan Competitive Scholarship
Program and the Michigan Tuition Grant Program, respectively.
As with the federal programs, the amount of money that
students may receive through the state funded programs is
based upon financial need.
Although the Michigan Competitive Scholarship and
Tuition Grant Programs were only established recently,
Giddens reports that state financial assistance in one
form or another has been available to college students
since 1647.

28

He writes that in addition to lotteries,

granting land, and revenues from certain taxes, grants
of money were given directly to the colleges by the
28

Thomas R. Giddens, "The Origins of State
Scholarship Programs:
1647-1913," College and Univer s it y,
American Association of Collegiate Registrars and
Admissions Officers, X L V I , No. 1 (Fall, 1970), 37-45.

25

colonial governments, in some cases requiring institutions
to use part or all of the grants to defray expenses for
indigent students.

Giddens goes on to cover the efforts

of states to financially assist their college students,
including Maryland, which established a scholarship plan
in 1785, Massachusetts in 1792, North Carolina in 1853,
Pennsylvania in 1866, Vermont in 1884, and New York in
29
1913.
During the 19 66-6 7 academic year states expended
more than $97.5 million for scholarship,

fellowship,

incentive and tuition grant p r o gr am s, and the number of
states operating scholarship programs increased from three
in 1954 to twenty in 1 9 6 9 . ^

By the 1971-72 academic

year the number of states funding scholarship programs
had increased to twenty-two, and those states appropriated
slightly more than $279 million during the same academic
p e r i•o»d .31
All of the factors affecting the development of
financial need which have been mentioned thus far

{social

consciousness, development and refinement of the College
Scholarship Service and American College Testing Program
29

,
Ibid.
30t.
.,
Ibid.
31

Joseph D. Boyd, '*19 71-7 2 Undergraduate Compre­
hensive State Scholarship/Grant Programs," Third Annual
Survey {Deerfield, 111.:
Illinois State Scholarship
Commission), September, 1971.

26
need analysis instruments,

federal student aid programs,

and state assistance programs)

influenced individual

colleges and universities to the extent that these institu­
tions have re-established financial need as a fundamental
principle in awarding financial assistance to their students.
As a result, the federal government, almost half of the
state governments, institutions of higher education,
foundations, and other organizations each year expend
hundreds of millions of dollars to assist financially
needy students.
The historical data and background material dis­
cussed thus far have a twofold purpose:

one, to provide a

better understanding of the development of student
financial aid on American campuses, and two, to demonstrate
the crucial role which financial need plays in the alloca­
tion of huge sums of money to college students.

Several

sources of student aid are not investigated here, for,
although they comprise a significant portion of financial
aid resources, they are typically not coordinated by the
institutional aid office and are often not attended by the
same rigorous financial need requirements which lay such
an important foundation for this study.
sources are as follows:

Some of these

social security benefits?

vocational rehabilitation assistance; survivors benefits
for dependents of deceased or disabled veterans? various
foundations and private scholarship programs; professional

27
organizations; labor unions; and the indirect assistance
to students attending public colleges and universities
through state legislative appropriations and to those
attending private institutions by means of endowment income
and donations.

From this point on, the discussion focuses

more specifically upon the research study of interest.
Student Budgets
Basically, the determination of financial need
involves a two-step process:

analyzing the financial

strength of a student’s family to determine how much money
the family can reasonably be expected to contribute toward
the student's educational expenses during a given academic
year, and then comparing the expected family contribution
with the total cost of attending the college or university
of the student's choice for one academic year.
cost of attending a particular institution
exceeds the expected family contribution,

If the

(student budget)
the difference

is the amount of financial assistance from outside sources
the student needs to attend that institution without
encountering financial difficulties which might adversely
affect his academic performance.
of this situation:

Following is an example

(David B. wishes to attend State U . ,

where the total cost for the 1971-72 school year is $2,500;
it is determined that David and his family can contribute
$2,000 from income and assets toward college expenses during

28

the same year; as a result, David would demonstrate $500
financial need, the amount of money necessary to complement
the $2,000 family contribution and enable him to attend
State U . ).
Through constant study and refinement of the
Parent's Confidential Statement, College Scholarship
Service has developed a defensible,

sophisticated system,

through which individual family financial situations are
analyzed and expected family contributions are computed. 32
As the David B. example reveals,

the computation of expected

family contribution is one-half of the financial need
analysis procedure.
The other half of the financial need analysis pro­
cedure, i.e., determining the total cost of college
attendance each year

{student b u d g e t ) , has not undergone

the same concentrated,

rigorous, or scientific analysis

and review as has the determination of expected family
contribution.

And it is to this other half of need

analysis that this study is related.
The ultimate goal to be sought in the determination
of student budgets is finding a fair and reasonable figure
to employ, one which provides a standard of living that
assures the student not only a reasonable level of physical
32

College Scholarship Service, Manual for Financial
Aid Officer, 1971 Edition (New Y o r k : College fentrance
Examination B o a r d , 1971) .

29

comfort, but of psychological well-being as well.

The

items generally included in the student budget are listed
below.
Tuition
Room
Board
Books and Supplies
Personal Expenses (clothing, medical and dental,
entertainment, miscellaneous)
Transportation
There is a dearth of published research devoted to
the topic of college student expenses, or student budgets.
Perhaps it is this state of affairs that caused Johnson
to write:

"The government is beginning to determine college

costs because,

in many instances,

have not given clear directions.

financial aid officers
Each aid officer must

develop appropriate student budgets for his institution." 3 3
Johnson's plea for positive action is supported by
Dyer's analysis of the c u r r e n t state of affairs concerning
student budget determination:

"Identification of average

student costs for different types of institutions of higher
education under different circumstances with respect to the
student's status is still primarily guesswork . . . ." 34
Often writers fail to cover costs of individual
items w hen discussing the cost of higher education to
33

Richard Johnson, "Student Budgets--Where Are We?"
MASDAA Newsletter (February, 1972), 2.
34
James S. Dyer, Assessing the Effects of Changes
in The Cost of Higher Education to the Student (Santa
M o n i c a , CaTTFT’i Rand C o r p . , J u n e , 1*»70) , p~. T 3 .

30

students.

In one publication the authors of four separate

chapters ignore the topic of individual cost items incurred
by all students and conclude only that college students'
expenses are high and more and varied kinds of assistance
should be made available to them. 35
Johnson believes it is crucial to study the
numerous expenses incurred by various classifications of
students if the financial aid community is to retain its
usefulness within the higher education community:
It is one thing to establish budget costs and
models and another to verify them.
Research must
be done and a rationale must be developed for
each model and cost cell within the model.
The
financial aid officer's "best guess" is not good
enough.
Reliable figures are needed to back any
action taken.
. . . it is crucial that the financial aid
officer move swiftly to develop sound student
budget practices lest his prerogative be taken
by others.36
One such study is reported in an unpublished paper
by the Office of Student Financial Aid at the University
37
of Michigan.
As that office has requested that the
results not be discussed publicly,

the data which they

collected and the results generated are not reported here.
Interested readers may wish to contact them individually
in this regard.
35

Financing Higher Education (Atlanta, G a . :
Southern Regional Education Board, 1966), p. 94.
36Johnson, p. 3.
37
"Student Budget Survey, 19 70-71," unpublished
report done by Office of Student Financial Aid, University
of Michigan, 1971.

31
However, a passage from the Introduction of the
University of Michigan survey bears repeating, for it
reflects the goals they sought to

achieve and relates

very well to this study also:
In its allocation of funds to financially needy
students the office attempts to determine the level
of aid that each student must
receive to enable him
to meet his educational goals, and to do so the
office constructs hypothetical student expenditure
and resource budgets that serve as standards against
which the needs of individual student applicants
are compared.
The resources available for aid to
students are limited and it is of paramount
importance in achieving a fair and equitable
allocation of aid funds that the standard budgets
reflect the reality of the financial circumstances
of the applicants to whom they are applied.
An ideal financially equitable policy of
administering financial aid would lead to the
equal treatment of students of equal financial
need and to the differential treatment of students
of different financial need that reflects the
reality of their differences in financial need.
The standard budgets used for financial aid
decisions must meet these criteria of equity,
and to do so they must adequately represent
both the level of student expenditures and
resources and must reflect differences in finan­
cial need of different students and groups of
students.38
The demographic data requested in the Michigan
study are as follows:

sex; household status

(single,

married, divorced or separated, other); household size;
race; age, academic status; and type of housing.

Those

individual variables were analyzed to determine if they
and/or their respective sub-groups had an effect on the
spending patterns of the student respondents during the
1970-71 academic year.

32
A study was undertaken by College Scholarship
Service
people:

(CSS) to learn more about the problems of young
how they and their families are facing the

spiraling costs of education, how extensive is their
indebtedness for education, and what are their educational
goals*

It investigates ways in which race, sex, and type

of college attended relate to sources of income and
39
expenditures.
Concerning expenditures, one chapter of
the report is devoted to an analysis of college costs as
reported by single students enrolled full-time during the
1969-70 academic year. 40
Also presented are estimates
of students'

expenses made by college financial aid

officers, but comparisons cannot be made between these
data, as they cover different academic years.
The population for the CSS study were contacted
in July, 1970, and consisted of 8,618 young men and women
who were identified in 1968 as attending some post­
secondary institution.

These students were among 19,612

young people representing a national sample of high school
juniors who participated in a special norming administra­
tion on the Preliminary Scholastic Aptitude Test

(PSAT)

in the fall of 1966.
39

Elizabeth W. Haven and Dwight H o r ch , How College
Students Finance Their Education, College Scholarship
S e r v ic e, College^ Entrance Examination Board, 19 72, 60 pp.
40Ibid., Chapter IV, p. 38.

33
CSS presents the out-of-pocket costs for college,
reported by various classifications of students, in two
forms:

(1) pie diagrams illustrating what percentage of

the dollar was spent in four cost areas

(a. tuition and

fees, books and supplies; b. food and housing; c. trans­
portation; d. other expenses) by all students and by
various subgroups
students); and

(sex, race, resident vs. commuting

(2) tables showing average expenses for

the same subgroups of full-time students attending dif­
ferent types of institutions

(public 4-year, private

4-year, public 2-year, and other).

The dollar amounts

presented in the tables are for the following expense
items:
meals;

(a) tuition,

fees, books,

(c) medical and dental;

(e) clothing,

supplies;

(b) room and

(d) transportation;

laundry, cleaning;

(f) debt repayment;

(g) other expenses.
Following is the CSS summary of results from the
college cost survey:
Analysis of the expenses for college reported by
students revealed that costs tor tuition, f e e s ,
books, and supplies accounted for 4 3 percent of
the total budget, and that food and housing
accounted for an additional 31 percent.
The
average total expenses of students in public
four-year institutions was $1,869 for the 196970 academic year; it was $3,329 at private fouryear colleges, $1,347 at public two-year colleges,
and $1,952 at other types of institutions.
Sub­
group comparisons revealed that men spent more
on the average than women, that black students
lived on a budget that was approximately $500
lower on the average than that of white students.

34
and that residents required higher average outof-pocket expenses than commuting students.41
More research such as the CSS study is necessary
to establish a benchmark from which the financial aid
community can proceed to establish sound, defensible
student budgets for the distribution of financial
assistance to needy students.

The literature reviewed in this chapter relates
to two facets of financial aid administration.

The first

area covered is the historical development of student
financial aid in America, concentrating primarily at the
campus level.

This is done to provide a better under­

standing of the financial aid field in general,

as well

as the bearing w hich this study has on the field.

The

second area covered leads from the first and deals
specifically with the topic of college costs incurred by
students.
The period of history which is related extends
from 1643, when the first scholarship fund was established
at Harvard College for needy students, to the present.
Throughout this period several critical factors are
evident which have influenced the development and current
status of financial aid administration.
is the concept of financial need.

One such factor

Except for the period

^^Ibid., "Highlights of Study," p. v.

35
ranging from 1946 to approximately 1960 and other brief
interruptions,

financial need was the foundation upon

which most student assistance programs were constructed,
limited as they were*

This need based philosophy still

holds true today for massively funded aid programs
originating from several sources,
A second critical factor is the role played by
federal and state governments in the development of student
aid in America.

Although there have been several instances

of state and federal participation in student aid pro­
grams, the first enduring state scholarship program was
established in New York in 1913 and the first federal
student aid program to drastically affect higher education
was the post World War II G.I. Bill.

By 1971, twenty-two

states had scholarship programs, appropriating in excess
of $279 million.

The G.I. Bill was as significant for

its effect on the philosophy of need based student
financial aid as for the impact which it had on A m e ri ca ’s
attitude toward higher education in general.

Due to the

huge sums of money which the Bill authorized for veterans,
for a brief period higher education institutions were not
severely pressed for student aid funds and reacted with
the formulation of scholarship programs attended by
eligibility criteria other than financial need.

This led

eventually to bidding for students who possessed the
talents or qualities desired by the institutions.

The

36
federal government re-entered the student aid field in
19 58 through the National Defense Education Act, in 196 4
by means of the Economic Opportunity Act, and in 19 65
through the Higher Education Act.

In June,

19 72, a new,

massive higher education bill was signed into law.
A third factor, one w h i ch resulted from the
problems associated with bid d in g for students , was the
emergence of a defensible financial need analysis system.
As a result of pressure exerted by several colleges and
universities in the Northeast,
Service

the College Scholarship

(CSS), a branch of the College Entrance Examina­

tion Board, was formed in 1954.
a financial form

CSS developed and refined

(Parent's Confidential Statement)

that

enabled institutions to mea su re the family financial
strength of their aid applicants and arrive at a figure
of financial need.

The most attractive aspect of this

centralized need analysis system was that it could be
used consistently and object iv e ly by all collegiate
institutions.

Although CSS is still the most widely used

need analysis agency today,

the American College Testing

Program has developed a competitor instrument to the
Parent's Confidential Statement.
A final factor to be mentioned in the historical
development of student aid is the emergence of three
distinct types of financial assistance:
and part-time employment.

gift aid, loans,

Gift aid is typically in one

37
of two forms, scholarship or grant, and, as the name
implies, is an outright gift and need not be repaid by
the student recipient.

Loans, of course, do carry a

repayment provision, but are usually attended by very
attractive interest rates for the borrower.

Part-time

employment may be on the campus or off, somewhere in the
local community.
The little existing literature related to the
topic of student expense budgets points to the need for
research in the area.

Some writers express this need

explicitly, and others do it implicitly by skirting the
basic issue of analyzing specific cost items for specific
groups of students, and instead recording their abhorrence
of spiraling educational costs in general.
In an attempt to develop a sound rationale for the
establishment of standard student budgets, the Office of
Financial Aid at the University of Michigan surveyed a
cross-section of their students.

The students were

asked to identify what type of expenses they incur and
what the amounts of those expenses are.
graphic data were also requested

Certain demo­

(sex; household status;

household size; race; age; academic status; and type of
housing)

and these individual variables were analyzed

to determine if they and/or their respective subgroups
had an effect on the spending patterns of the student
respondents.

38
A similar study was undertaken by the College
Scholarship Service,

in which college students enrolled

full-time during the 1969-70 academic year were surveyed.
The CSS study revealed that 4 3 percent of the student's
total budget was spent for tuition, fees, books and
supplies and that an additional 31 percent was spent for
food and housing.

The average total expenses of students

attending various types of higher education institutions
were as follows:

four-year public, $1,869;

four-year

private,

$3,329; two-year public, $1,347; and other,

$1,9 52.

Average expenses for men were higher than those

for women, black students lived on a budget that was
approximately $500 lower than that of white students, and
average expenses for resident students were higher than
those of commuting students.
In conclusion, it is felt that much more systematic
research such as the CSS study is necessary in order to
develop and maintain fairer and more objective student
budgets for the distribution of financial aid funds to
needy students.

CHAPTER III
DESIGN OF THE STUDY
Introduction
In contemporary financial aid administration the
determination and analysis of student financial need is
perhaps the most critical factor involved in the disbursement
of various types of financial assistance to college
students.

As never before huge sums of money,

federal and state governments,

from

institutions of higher

education, and private donor organizations, are expended
for the purpose of assisting needy students pursue a
college education.
Given this emphasis upon financial need as a funda­
mental criterion for determining the eligibility of students
for financial aid consideration,

it is readily apparent that

the method employed to arrive at a financial need figure
for each student should be as fair, objective, and con­
sistent as possible.

The analysis method used by most

organizations is one which assists in the determination of
relative financial need, or how the student's financial
resources compare with the total cost of attending the
college or university of his choice.

39

40
The purpose and need of this study as it relates to
the cost aspect of financial need analysis are discussed
in Chapter I, as is the general plan to be followed for
the entire research project.

More detailed consideration

is given in this chapter to descriptions of the population
and s a m pl e, development and utilization of the instrument,
including attempts to determine reliability, procedures
employed in collecting the data, the design, and statisti­
cal analyses used in the study.
The Population and Sample
The population for this examination of education
related costs incurred by college students includes all
full-time undergraduates who during the 1971-72 academic
year, attended any one of the sixty-four

(64) higher

education institutions in Michigan which participated in
the study.

Originally, all institutions, and their

several campuses were applicable, which participate in the
State of Michigan Tuition Grant and/or Competitive Scholar­
ship Programs with full-time undergraduate student
enrollment totaling ninety (90) or more during the 1971-72
school year were selected for inclusion.
original list included eighty-four

Although the

(84) college campuses,

as samples were collected from only sixty-four campus
units, the population must be restricted to students
attending the smaller number of institutions.

Two reasons

41
account for the twenty institutions failing to participate
in the study:

(1) the school did not distribute survey

instruments to their students, or

(2) the institution

distributed forms to students but none were returned.

In

Table 3.1 are listed those colleges and universities which
include the population of students for the study, and
those institutions which were originally selected to
participate but did not.
The sample for the study included full-time under­
graduate students, as defined by their respective
institutions, randomly selected at each of the Michigan
collegiate institutions that participated in the research
project.

The sample was restricted to full-time under­

graduate students because only this group was eligible
for financial assistance consideration under all student
aid programs during the 19 71-72 academic year.

As the

study was intended to analyze the spending patterns of
students most typically eligible for financial aid con­
sideration, graduate students and part-time students were
excluded.

The number of students selected at each school

was based upon the proportion which the institution's
1971-72 full-time undergraduate enrollment was of the
total enrollment of all sixty-four schools included in the
study.

The total number of students in the sample was

4,218.

Therefore,

the number of students selected at

each institution is the same percentage of 4,218 as that

42
TABLE 3.1. — Summary of Participating and Selected but
Non-Participating Institutions.
4 Year Public

2 and 4 Year Private

Central Michigan
Eastern Michigan
Ferris State
Grand Valley
Lake Superior
Michigan State
Michigan Tech.
Northern Michigan
Oakland
Saginaw Valley
University of
Michigan--Flint
Wayne State
Western Michigan

Adrian
Albion
Alma
Andrews
Calvin
Cleary
Concordia Lutheran
Davenport
Detroit Bible
Detroit Business
Detroit Inst, of Tech.
General Motors Inst.
Grace Bible
Hillsdale
Hope
Kalamazoo
Lawrence Institute
Madonna
Marygrove
Mercy
Muskegon Business
Nazareth
Olivet
Owosso
Reformed Bible Inst.
Shaw
Detroit Society of Arts
and Crafts
Spring Arbor
Suomi
University of Detroit

‘University of
Michigan— Ann Arbor
‘University of
Michigan— Dearborn

‘Aquinas
‘Grand Rapids Baptist
‘Michigan Christian
‘Northwood Institute
♦Siena Heights
‘Walsh

Junior/Community
Bay De Noc
Delta
Genesee
Glen Oaks
Gogebic
Grand Rapids
Henry Ford
Highland Park
Jackson
Kalamazoo Valley
Lake Michigan
Lansing
Macomb County (Center
and South Campuses)
M i d —Michigan
Muskegon County
North Central
Northwestern
Oakland County
(Orchard Ridge)
St. Claire County
Wes t Shore

‘Alpena
‘Kellogg
‘Kirtland
‘Monroe
‘Montcalm
‘Oakland County
(Auburn, Highland
and Southeast)
‘Schoolcraft
‘Southwestern
‘Washtenaw
‘Wayne County

*

Selected but non-participating institutions.

43
school's total 1971-72 full-time undergraduate enrollment
was of the total enrollment of all schools in the study.
That total enrollment figure was 184,847.

The institutional

enrollment figures from which the random samples were
generated were taken from the Higher Education General
Information Survey completed by colleges and universities
in the Fall of 1971.

In cases where an institution's

proportion was computed to be fewer than ten stu de nt s, the
number of people selected at the campus was arbitrarily
raised to ten.
Individual institutions or campuses were not
studied, so the actual number of students selected at each
campus is not reported.
of institutional type

However,

the more general category

(4-year public college or university,

2 or 4 year private college or university, and 2-year
public community/junior college)

is an important variable

in the study, and the number of students selected randomly
and proportionately by each type is as follows:

4-year

p ublic--2,713; 2 and 4-year private— 770; 2-year community/
junior--735.
Instrumentation
The development of the instrument used in this
study

(a copy of which is included in Appendix

over a period of three months.

) occurred

The question of w h at data

to collect and how to request it was first discussed in an
Educational Research 999 course coordinated Winter Term,

44

19 72, by Dr. Andrew Porter and his staff of the Office of
Research Consultation in the College of Education at
Michigan State University.

Advice from colleagues in the

Student Financial Assistance Services Division of the
Michigan Department of Education was also sought during
this initial "thinking out" period.

After several drafts

had been submitted to the Office of Research Consultation
and Student Financial Assistance Services staffs for
review and comment, the items listed on the instrument in
Appendix A were selected for inclusion in the study.
During February of 19 7 2 the Michigan Student Financial Aid
Association voiced an interest in supporting and assisting
in the study and copies of the instrument were distributed
to members of that body's Research Committee for further
scrutiny by experts in the financial aid field.

The only

negative reaction to that review was one committee member's
comment that the item requesting racial background of the
respondents

(Item 4, Section A) should be omitted, as many

people are sensitive to the issue and its inclusion could
adversely affect the response rate.

The minority opinion

was overruled in light of the importance of generating
educational cost data on the race variable.

Staff members

of the Research, Assessment and Evaluation Division of the
Michigan Department of Education also reviewed the final
draft for content,

and staff from the Department's data

45
processing division assisted with the physical layout of
the form.
In Section A of the instrument, the personal informa­
tion items 1 through 5 represent variables upon which cost or
expense analyses may be made in future research for compari­
son purposes and for providing insight as to how much money
various classifications of college students are spending
for education related expense items.

Item 8, pertaining to

permanent residency of the United States, provided the
means by which the cost figures of only permanent United
States residents would be included in the study.

As only

permanent residents are eligible for financial aid considera­
tion through State of Michigan and federal student aid pro­
grams, and as the life styles of foreign students in
America may result in different spending patterns than
those of most American college students,

inclusion of

foreign visiting students could have confounded the results
of the study.
Items 9 and 10 in Section A were used to determine
whether the student respondents should be classified as
financially dependent upon or independent from their
parents or legal guardians according to the guidelines set
forth by the United States Office of Education for the
1971-72 academic year.

A "No" response to both items 9 and

10 was necessary to classify a student as financially
independent.

Any other combination of responses to those

two items resulted in defining a student as financially

46
dependent upon his parents or legal guardians.

The dif­

ferentiation of financially dependent and independent
students was essential because cost data for the former
group was collected on a nine month, academic year, basis,
while the cost data for the latter group was collected on a
twelve month basis.

The Expense Period box in Section B

was added to further assure that respondents would enter
cost data for the appropriate time period
months).

(nine or twelve

Items 6 and 7 in Section A, pertaining to the

respondents marital status and number of dependent
children, respectively,

completed the personal information

requested and provided variables upon which expense data
for financially independent students could be analyzed.
In Section B, the Directions advised the student
to complete the Financial Information items for either a
nine month

(September,

1971-June,

(September, 19 71-August,

19 72) or twelve month

19 7 2) period depending upon how

he responded to questions 9 and 10 in Section A.
The eleven expense items listed in the Financial
Information portion of Section B include the categories
of education related costs which full-time college
students could be expected to incur during the course of
an academic or a twelve month year.

Appropriate space was

provided for the student respondents to list the amount of
money spent during the appropriate time period for each
of the expense items listed, and a total.

As the expense

47
period for both financially dependent and independent
students would not have elapsed by the time they returned
the completed survey instruments, they were instructed to
estimate their expenses between the time of compilation
and the end of their expense period,

in arriving at an

appropriate dollar figure for each item.
To test the reliability of the survey instrument a
pilot study was conducted with selected students at
Lansing Community College.

During the registration period

for Spring Term, 19 72, ten students were selected by the
Lansing Community College student aid office who repre­
sented as closely as possible the various demographic
classifications, as well as financially dependent and
independent students.

The students were asked to complete

both Sections A and B of the instrument and to record
comments or reactions they had which pertained to any aspect
of completing the form or participating in the pilot study.
All ten respondents returned the completed forms to the
Office of Student Financial Aid, Lansing Community
College.

No comments were recorded and the only noticeable

problem involved a financially independent student who
provided financial information on a monthly basis instead
of listing expenses for the twelve month period.
Ten students were also selected at Hope College,
a private college in Holland, Michigan, and ten at Grand
Valley State College, a state supported institution, in
Allendale, Michigan,

for further testing of the instrument.

48
Upon completion of the instruments by these students, who
w ere also selected to represent as many of the demographic
variables as possible,
personally.

the respondents were interviewed

The problems encountered by these students

w e r e not of a nature that reflected on the instrument,
b u t which indicated a likelihood that some instruments
returned in the formal study would be unuseable.
example,

For

several students at Hope College w e r e classified

as financially dependent upon their parents as a result of
their responses to items 9 and 10 in Section A, yet they
received little actual support from their parents and c on ­
sidered themselves independent.

These students completed

Section B on a twelve month basis instead of nine, as
directed,

and consequently made the form unuseable.

The

other financially dependent students at Hope indicated that
they had not seriously considered their expense patterns
prior to the pilot study while the true independent
students demonstrated a strong concern for personal and
family budgetary matters.
The discussions with students at Grand Valley State
College were particularly helpful in later determining
min im u m allowable limits for entertainment and incidental
expenses.

Students w h o listed expenditures

for these

items as low as $20 strongly defended their positions later
in the interview situation,

in spite of the fact that the

49

$20 cost level seemed to be unrealistically low.

On the

other hand, some of the students in the pilot study at
Grand Valley who entered larger than anticipated dollar
amounts for the expense item s, revealed that the amount of
money represented what they would have spent had sufficient
funds been available,
actually spent.

and was higher than the amount

Again,

this information was more enlight­

ening as it pertained to the analysis of the data compila­
tion than to the construction of the survey instrument.
It revealed the possibility that, providing the pilot study
respondents were representative of the regular survey
sample, errors in reporting cost data for various expense
items were more likely to be on the high side of the amount
of money actually spent than on the low side.
Collection of the Data
As there was a delay in printing the survey instru­
ments, and as timing was very important, on April 5, 1972,
a letter

(a copy of which is included in Appendix A )

containing instructions for distribution of the instruments
and a list of random numbers representing the number of
students to be selected was sent to the chief financial
aid officer at each institution selected for inclusion in
this study.

The list of random numbers,

the total of which

equaled the number of students to be selected, had earlier
been generated for each college and university, based upon

50
the institution's Pall, 1971,
enrollment.

full-time undergraduate

This list provided the financial aid officers

with an easy method to select students for inclusion in the
study from their rosters of full-time undergraduates and
provided assurance that students were selected randomly
and in a consistent fashion at all institutions.
On April 10, 19 72, the survey instruments were
sent to the selected campuses for distribution to the
appropriate student samples.

All campuses which partici­

pated in the study were able to distribute the forms to
their students by April 17, 1972, so that they had a full
week in which to complete and return the instrument to
their respective financial aid offices.

Time was a

particularly critical element due to several schools
concluding their regular academic year by the first part
of May, and the almost impossible task it would have been
to conduct the study after students had left the campuses
for the s u mm e r.

The student respondents were requested to

return the completed instruments to their respective
financial aid offices by April 24, 1972, and the student
aid officers,

in turn, were asked to forward the completed

forms to the Office of Financial Aid at Lansing Community
College by May 15, 19 72, which provided a three week
interval for follow-up studies.

51
For follow-up purposes it was necessary for the
student aid office on each campus to retain a list of the
names of students selected at that institution.

The

respondents could not be identified from the non-respondents
for mailing purposes,

so to follow-up it was necessary to

contact every student selected for the study and request
that he complete and return the questionnaire if he had
not already done so.

This task was entirely in the hands

of the financial aid officers and no official data was
recorded which pertained to the success of follow-up
attempts.

However, after conversations with several aid

officers it was surmised that an inverse relationship
existed between the size of the original sample at a campus
and the percentage of students who responded to the followup study, where such follow-up attempts were made.
Originally,

5008 survey instruments were delivered

to 84 college and university campuses in Michigan,

the names

and selection of which are described earlier in Chapter III.
In Table 3.2 are listed the number and percentage
indicated)

(where

of instruments distributed to and returned by

students, as well as the number of campuses which were
originally selected for the study and those which actually
participated in it to its completion.

All the completed

survey instruments included in the study were received in
Lansing by June 1, 1972.

Table 3.3 contains a summary of

the characteristics of the students who returned useable

52
TABLE 3.2.— Record of Participation in the Study by
Colleges and Students.
Type of Institution

Number of campuses to which
survey forms were sent
Number of forms sent
Number of campuses from which
completed forms were
received (%)
Number of forms sent to these
participating institutions
Number of forms returned
from participating
institutions (%)
Number of useable forms

(%)

survey forms for analysis.

4-Year
Public

2 & 4 Year
Private

15

36

33

84

3172

86 3

973

5008

13(87%)

2-Year
Community

Total

30(84%)

21(61%)

770

735

845(31%)

430(56%)

323(44%)

1598(38%

801(94%)

402(94%)

300(92%)

1503(94%

2713

64(76%)

4218

The instruments that were

returned unuseable were eliminated by a hand check before
any data was key-punched so there would be no risk of
mixing them with the good forms.

In cases where the

number of students in a particular demographic classifies
tion does not equal the total number of useable survey
forms returned for analysis, the difference is due to
missing data on that specific variable.

53
TABLE 3.3.--Summary of the Characteristics of the
Respondents.
Number

Personal Information
1.

2.

Type of School Attended
Public Community/Junior College
A.
B.
2 or 4 Year Private College
C.
4 Year Public Institution
Class Standing
A.
B.
C.
D.

3.

4.

5.

309
39 4
794

476
426
297
290

Freshman
Sophomore
Junior
Senior

Sex
A.
Male
B.
Female

788
704

Race
A.
American Indian
B.
Black
Spanish Surnamed American
C.
Oriental
D.
E.
White and all Others

1
96
7
7
1377

Residence
A.
B.
C.
D.
E.
F.

Dormi tory
With Parents
Apartment
Room in Rooming House
Fraternity/Sorority House
Maintain Own Home

592
431
294
39
37
102

Design of the Study
Although technically this study was of a descriptive
nature, because of the dearth of related research in the
area of student expenses,

it was also to a high degree.

54
exploratory.

It is hoped that this research provides a

benchmark and a guide for more sophisticated study in
the future.
The systematic study of spending patterns on a
state-wide basis was not intended to demonstrate whether
or not the expenses incurred by students were reasonable.
However,

it has provided an opportunity to

(1) compare

the spending patterns of students at various types of
institutions,

(2) compare the education related expenses

of students living in campus housing with the expenses of
students residing off-campus with parents or elsewhere,
and

(3) compare the expenses which were actually incurred

by these students with the level of expenses for the same
items which the State of Michigan Department of Education
utilized in determining student financial need.

These

several comparisons were based upon cost data reported by
students, who, according to United States Office of
Education guidelines, were financially dependent upon their
parents or legal guardians. 4 2
In an independent but similar design it was possible
to

(1) compare the expenses reported by single and married

financially independent students supporting various numbers
of dependent children and attending various types of
collegiate institutions,

and

(2) compare the independent

student expenses reported with the level of spending which
42

Hubert S. Shaw, Program Development Administrative
Memorandum No. 2-72, Department of Health, Education, and
Welfare, September 28, 19 71.

55
the U.S. Office of Education has suggested is reasonable
for them.43
Analysis of the Data
The two independent analyses in this study
financially dependent and independent students,

(for

respectively)

were similar in nature, in that they both utilized two-way
analysis of variance and the t-test.
Financially Dependent Students
For dependent students two-way ANOVA was used to
provide a comparison of expenses incurred during the 19 7172 academic year by type of collegiate institution attended
and residency arrangement.

A graphic representation of

the three by three matrix can be found in Exhibit 3.1.

Residency Arrangement
Institution Type
Dormitory
4-Year Public
2 & 4-Year Private
J unior/Community

Exhibit 3.1.

43Ibid.

With Parents

of?

^

pua

56
The residency arrangements and institution types
were identified by the students' responses to those items
in Section A of the survey instrument.

The expense items

from Section B included in the analysis were as follows:
books and supplies; rent or house payments and utilities;
food and other grocery items at place of residence; trans­
portation;

clothing; uninsured medical and dental expenses;

entertainment; and incidental expenses.
For dormitory students the actual room and board
expenses charged by the colleges were substituted for the
rent and food expenses reported in order to assure greater
accuracy in the total expense figure for that group of
students.

As it is extremely difficult for students

residing with their parents to determine the value of their
portion of the family rent or house payment and food
expense for the purpose of comparing expenses by residency
arrangement and institution type the figure of $7 50 used
by the Michigan Department of Education for room and board
was utilized.

The tuition and fees expense was excluded

from the analysis as it is an item the charge over which
the student has no control regardless of institution
attended or living arrangement.

Elimination of tuition

expense, which can be found easily, also allowed for
closer identification of variability among the expense
items being analyzed.

Since only childless dependent

students were included in the two-way ANOVA the child

57
care item was omitted as well.

For entertainment and

incidental expenses, the minimum expense figures allowed
were $10 and $20, respectively.

These minimum allowable

expense items were selected as a result of the previously
mentioned interviews with students who participated in the
pilot study.
Several t-tests were used to provide a comparison of
total costs actually incurred for certain variable cost
items by students with the dollar amounts for the totals
of the same cost items which the Michigan Department of
Education employed in its determination of student
44
financial need.
For students residing with parents, the
expense items under consideration from Section B of the
survey instrument were as follows:
transportation, clothing,

books and supplies,

uninsured medical and dental,

entertainment, and incidental.

An amount of $750 was

arbitrarily selected as the value of room and board
(corresponding to cost items 3 and 4) for all students in
this residency category, which is equal to the value for
those items used by the Department of Education.

This was

done because of the nearly impossible task of determining
an accurate amount for those items and to insure that any
variability which occurred between the mean of the totals
44
Michigan Department of Education, Student
Financial Assistance Services, College Estimate of Student
Expenses, Scholarship and Tuition Grant Programs, 1971-72.

58
of the expense items under consideration and the counter­
part figure used by the Department of Education could not
be attributed to discrepancies between students' estimates
and the Department's estimate for room and board expense.
The total dollar amount employed by the Department of
Education for the cost items referred to above was $1,450.
For students residing in other off-campus housing
and in dormitories,
the instrument,

the same cost items were selected from

and room and board expenses were omitted

from the analysis.

The cost figure employed by the Michigan

Department of Education which corresponded to the total of
items 2, 5, 7, 9, 10, and 11 from Section B was $6 50.

As

the Department of Education provided identical considera­
tion for dormitory students and those living off-campus
but not with parents the t-test was used once to compare
the $6 50 with the mean expenses reported by the two groups
of students combined.

The t-test was also utilized to test

separately the mean expenses of these two residency groups
against the $650 figure.
Financially Independent Students
Two-way ANOVA was also used with independent
students to provide a comparison of expenses incurred
during the twelve month period, September 1971-August
19 72, by type of collegiate institution attended and number
of respondents * dependents.

A graphic representation of

the three by five matrix can be found in Exhibit 3.2.

59

Number of Dependents by Marital Status
Married

Single
Type of Institution
Attended

.No
Children

No
Children

_
One
Child

_
Three or
. Two
Children
Children

Public Junior/Community

2 or 4 Year Private

4-Year Public

Exhibit 3. 2

Marital status, number of dependents, and institu­
tion types were identified by the students' responses to
those items in Section A of the survey instrument.

The

expense items from Section B included in the analysis were
the following:

rent or house payments and utilities;

food

and other grocery items at place of residence; clothing;
child care; uninsured medical and dental expenses;
entertainment;

and incidental expenses.

The only expense items for which minimum allowable
limits were established were in the entertainment and
incidental categories.

The minimum allowable limits for

single respondents were $10 and $20 for entertainment
and incidental expenses, respectively.

The minimum

allowable limits placed on the same two expense items for
married respondents were $20 and $40, respectively.

The

60
establishment of minimum allowable limits was based on
the belief that it is inconceivable that someone would
spend nothing for entertainment and incidental expenses,
but that interviews revealed expenditures in those areas
may be quite low for some s t u de nt s.
Single respondents with children were not included
in the study.
The t-test was performed on each of the dependency
variables

(columns in Exhibit 3.2)

to provide a comparison

of total costs actually incurred by students for certain
variable expense items with the dollar amounts for the
totals of the same expense items considered reasonable by
the U.S. Office of Education, and recommended by that
agency to colleges and universities for use in financial
45
need determination.
The expense items in Section B
included for the analysis were the following:
house payments and utilities;
at place of residence;

rent or

food and other grocery items

clothing; child care; uninsured

medical and dental expenses; entertainment; and incidental
expenses.

The totals of these expense items considered

reasonable by the U.S. Office of Education for various
sized families follow:

single,

no children— $2,000;

married, no children— $2,800; married, one child--$3,500;
married, two children— $4,100; married, three children—
$4,700.
45

S h aw , op. c i t .

61

Summary
A description of the ra ndomly selected college
students from throughout the state of Michigan and the
institutions they represented w e r e presented in this
chapter.

Procedures used in d es igning the s u r v e y instru­

ment , conducting the pilot study,

and collecting the data

from participants w ere also described.

The inclusion of

two independent but related studies, pertaining to
students financially dependent u p o n and financially
independent from their parents,

respectively, w a s discussed

in the design of the study section of the chapter.
Finally identified and discussed w e r e the methods employed
in statistically analyzing the data.

CHAPTER IV
ANALYSIS OF THE DATA
Introduction
Two statistical techniques were used to analyze
the data for each of the two independent, but related
studies, which together comprise themajor research project
under consideration:
t-test.

two-way analysis of variance and the

Analysis of variance was employed to test foir the

effect of type of college attended, residency arrangement,
and their interaction on the mean education related
expenses incurred by financially dependent students.

The

t-test was used to compare financially dependent students'
reported costs for certain expense items with the cost for
the same items used by the Michigan Department of Education
in determining student financial need.

ANOVA was again

employed to test for the effect of institution attended,
family size, and their interaction, on the level of educa­
tion related expenses incurred by financially independent
students.

The t-test was utilized again to compare

financially independent students' reported costs for
certain expense items with the cost level for the same
items considered reasonable by the U.S. Office of Education.

62

63
The analyses w ere done on the CDC 1500 and 3600
computers in the Michigan State University Computer Center.
The major findings of the analyses are presented in table
and graph form as the eight hypotheses,
I, are reintroduced.

listed in Chapter

A section devoted to interpretation

of the analysis is presented later.
As a matter of interest and for information,

tables

are presented which reveal the mean expense levels of
individual expense items for various classifications of
students.
Analysis of the Data
This section is divided into two parts, one
devoted to analysis of the data submitted by students
financially dependent upon their parents and the other
pertaining to analysis of data submitted by financially
independent students.

The first four hypotheses relate to

financially dependent students while the second four
hypotheses pertain to independent respondents; conse­
quently their order of analysis falls naturally in the
same sequence as their presentation in Chapter I.
Financially Dependent Students
The first three hypotheses focus upon the effect
of institution attended,

residency arrangement, and their

interaction, upon the total amount of money expended by
students in this category for education related variable

64
expense items.

The expense items under consideration

from Section B of the survey instrument are as follows:
Books and Supplies,

Rent or House Payments and Utilities,

Food and Other Grocery Items at Place of Residence,
Transportation,
Entertainment,

Clothing,

Uninsured Medical and Dental,

and Incidental.

As the institution of

higher learning attended could be identified for each
respondent,

for those students residing in campus

residence halls,

the actual room and board charges were

substituted for the expense figures listed by the students.
This provided an exact cost figure for room and board and
reduced the possible sources of variability in reporting
by the respondents.

Three types of colleges and universities

comprised the Institution variable:
community,

(2)

two and four year private, and

public institutions.

(3) four year

The Residency variable was also com­

posed of three arrangements:
parents, and

(1) public junior/

(1) dormitory,

(2) with

(3) other off-campus housing.

The null hypotheses associated with these
variables are:
Ho,:

For full-time undergraduate students
financially dependent upon parents or
guardians there are no differences in
reported mean variable expenses among
institutional types.

Ho.:

For full-time undergraduate students
financially dependent upon parents or
guardians, there are no differences in
reported mean variable expenses among
three types of residency arrangements.

65

Ho 3 :

For full-time undergraduate students
financially dependent upon parents or
g u a r d i a n s , there is no interaction
effect between the various types of
institutions and residency arrangements.

As can be seen in Table 4.1 the analysis of variance
found no statistically significant institution effect at the
.01 level of significance,

among respondents attending

public junior/community colleges,
private colleges and universities,
colleges and universities.

(a)

(b) two or four year
and

(c)

four year public

Statistically significant

differences were found to exist among mean reported
variable expenses at the
respondents residing
parents,

and

parents.

.01 level of significance,

<a) in cair^>us dormitories,

for

(b) with

(c) in other off-campus housing away from

In Table 4.1 is also revealed a significant

interaction effect at the

.01 level between institution

type and residency arrangement.

TABLE 4.1.--Analysis of Variance for Financially Dependent
Students.
Source

Df

Mean Square
^

F

Institution

2

761678

1.9423

Residency
Interaction

2
4

5059054
1679141

12.9008
4.2819

Error

1105
*

Significant at the .01 level.

Probability
Less Than
0.1439
0.0001*
0.0020*

66

Based upon this analysis,

the null hypothesis

anticipating no differences among the mean variable
expenses reported by institution type attended

(Ho^) was

not rejected, but those predicting no differences among
mean expenses by residency arrangement
action effect

' and no inter­

(Ho^), were rejected.

The mean expense levels for students attending the
three types of higher education institutions and residing
in the three housing arrangements are listed in Table 4.2.
The totals

(weighted means)

for the residency arrangements

provide a numerical presentation of the significant
residency effect which was determined to exist through the
application of analysis of variance.

As no statistically

significant differences were found among the mean expenses
incurred at the three types of institutions attended,
weighted means were not generated for the institution
variable.
A graphical representation of the interaction
effect, which was

found to be statistically significant,

can be found in Figure 4.1.

It is clearly evident from

the graph that the interaction effect was caused almost
entirely by the extreme drop in the mean variable expense
figure for "other off campus" students attending four year
public colleges and universities.

With this one exception

the lines on the graph are nearly parallel.

67

TABLE 4.2.— Cell Means for Financially Dependent Students.
Residency
Institution
Other
Off-Campus

No.

183

$2283

19

1930

72

2290

51

351

1965

99

1923

156

534

$1917

354

$2036

226

NO.

With
Parents

$1692

10

$1886

2 & 4 Yr. Private

1701

173

4 -Yr. Public

1745
$1748

Dormitory

Jr./Comm.

TOTAL (Weighted MeanJ

No .

2500
2000
1500
1000
Other Off-Campus--Parents--Dormitory
-

500
0

Jr./Comm

Priv.

Public

Type of Institution

Figure 4.1.— Graph of the Interaction in Analysis
of Variance for Financially Dependent Students.

68

The fourth hypothesis focuses upon comparisons of
costs reported by students for certain expense items, and
cost levels for the same items used by the Michigan
Department of Education.

The hypothesis, as presented in

Chapter I, is stated in general terms to insure an accurate
perception and understanding of the problem under considera­
tion.

In the actual statistical analysis the mean expense

figures reported by students in each of the three
residency arrangements plus a combination of dormitory and
other off-campus means were tested against their counterpart
figures employed by the Department of Education.
quently,

Conse­

four separate t-tests were run, each of which

allowed for the generation of a null hypothesis relating
to the specific comparison being made:
Ho.

:

The reported mean variable expense incurred
by dependent students residing in campus
dormitories does not significantly differ
from the variable expense figure utilized
by the Michigan Department of Education.

Ho..:

The reported mean variable expense incurred
by dependent students residing with parents
does not significantly differ from the
variable expense figure utilized by the
Michigan Department of Education.

HOj,^:
4c
~

The reported mean variable expense incurred
by dependent students residing in other offcampus housing (not with parents) does not
significantly differ from the variable
expense figure utilized by the Michigan
Department of Education.

69

Ho -j :

The combined reported mean variable expense
incurred by dependent students residing in
dormitories or in off-campus housing other
than wi t h parents does not significantly
differ from the variable expense figure
utilized by the Michigan Department of
Education.

As can be seen in Table 4.3, no significant
difference exists at the .01 level between the mean expense
reported by students residing in campus dormitories and the
$650 figure considered reasonable for the same expense
items by the Department of Education.

The means of student

reported costs were found to exceed Department of Education
levels for each of the other three comparisons made at the
.01 level:

(a) residency with parents,

other off-campus housing, and

(b) residency in

(c) dormitory residency and

other off-campus housing combined.
Based upon the analysis of data in Table 4.3, the
null hypothesis predicting that dormitory students'
reported costs w o u ld not differ significantly from the
cost level considered reasonable for them by the Michigan
Department of Education

(H° 4 a ) was not rejected.

However,

the other hypotheses anticipating no significant difference
between student reported expenses and Department of Educa­
tion figures

(Ho4fa, H o 4 c , Ho^d ) were rejected.

Interpretation.--The application of analysis of
variance to the data collected for this study has revealed
that type of higher education institution attended in
Michigan did not affect the variable education related

70
TABLE 4.3.— Comparison of Reported Costs of Financially
Dependent Students and Costs Used by Michigan
Department of Education.*
Dept. Ed.
Cost

Residency

Mean

Dormitory

$ 654

$ 650

1917

Off-Campus
Dorm, and Off

Parents

Difference

Sig.**

t

4

.3056

.754

1450

467

12.9731

<.001

883

650

233

7.1742

<.001

722

650

72

4.9233

<.001

$

Other

Cost items included for analysis:
(a) for dormitory and
other off-campus— Books and Supplies, Transportation, Clothing,
Uninsured Medical and Dental, Entertainment, Incidental: (b) for
residency with parents— Books and supplies, Rent or House Payments
and Utilities, Food and Other Grocery Items at Place of Residence,
Transportation, Clothing, Uninsured Medical and Dental, Entertainment,
Incidental.
**

.01 level of significance.

costs incurred and reported by full-time undergraduate
students.

However, it was revealed that residency arrange­

ment did affect the expenses incurred by the same students.
The weighted means for the residency variable progressed
from $1,748 to $1,917, to $2,036 for dormitory housing,
residency with parents, and other off-campus housing,
respectively.

This progression holds true not only for

the weighted means, but also for the means of two of the
institution types under consideration:

public junior/

community, and two and four year private.

The consistently

71
increasing cost p a t t e r n demonstrated by students residing
in dormitories, w i t h parents,

and in other off-campus

housing, was bro ke n only by the means expense figure for
students attending four year public colleges and univer­
sities and residing in "other off-campus" housing, which
figure also caused the interaction affect to occur between
the institution and residency variables.

Two possible

causes emerge for the lower costs reported by students
living in off-campus housing away from parents at four
year institutions:

(1) more mul ti pl e dwelling housing

units may be available in communities hosting the large,
four year public institutions,

the availability and use of

w h ic h would reduce considerably r oom and board c o s t s , and
perhaps transportation and clothing expense;

(2) a possibly

more permissive attitude toward communal living in these
communities.
The results of the t-test applications reported in
Table 4.3 illustrate that the cost figures used by the
Department of Education, and considered reasonable by
them are not very good estimates of what students are
actually spending for the same expense items, with the
exception of dormitory residents'
w h ic h varies from the Department's
$4.

reported mean cost,
figure of $650 by only

The question of reasonableness of actual expenses

incurred by students is cause for another study and will

72
not be addressed here.

Reasonable or not,

the mean expenses

incurred by students living with parents or in other offcampus housing,

and the combined mean expense of dormitory

residents and students in "other off-campus" housing,

all

exceeded the corresponding cost levels used by the
Department of Education.
Financially Independent S t u d e n t s .--The fifth,

sixth,

and seventh hypotheses concentrate upon the effect of
(1) higher education institution attended,
respondents'

dependents,

and

(2) number of

(3) their interaction,

upon

the amount of money expended for certain education related
variable expense items by students in this category.

The

expense items under consideration from Section B of the
survey instrument are as follows:

Rent or House Payments

and Utilities, Food and Other Grocery Items at Place of
Residence, Clothing,

Child Care, Uninsured Medical and

Dental, Entertainment,

and Incidental.

in the analysis are Tuition and Fees,
Transportation, and Car Payments.

Items not included
Books and Supplies,

These line items were

not included in the student budget figures generated by the
U.S. Office of Education,

and therefore,

are not included

for either the analysis of variance or the t-tests.

(The

U.S. Office has suggested that each financial aid officer
insert the appropriate cost figures for these items in
independent students'

budgets,

to be determined by the

cost of living in his geographical area.

46

Three classifi­

cations of higher education institutions comprised the
Institution variable:

(1) public junior/community,

and four year private, and
and universities.

(3) four year public colleges

The Family Status, or family size,

variable included five family arrangements:
no children,
child,

(2) two

(2) Married— no children,

(4) Married— two children,

and

(1) Single—

(3) Married— one
(5)

Married— three

or more children.
The hypotheses associated with the institution and
family size variable are:
Ho 5 :

For financially independent, full-time
undergraduate students there is no difference
in reported mean variable expenses among
institutional types.

Ho,:

For financially independent, full-time
undergraduate students there is no signifi­
cant difference in reported mean variable
expenses for the various sized family units.

Ho_:

For financially independent, full-time under­
graduate students there is no interaction
effect between the various institution types
and number of students' dependents.

As indicated in Table 4.4, the analysis of variance
revealed no statistically significant institution effect
at the .01 level of significance among respondents attending
(a) public junior/community colleges,

(b) two or four

year private colleges and universities, and

(c) four year

public colleges and universities.

it was found

Overall,

that family size did significantly affect the level of

74
TABLE 4.4.— A nalysis of Vari an ce for Financially
Independent S t u d e n t s .
Df

Source

Mean Square

Institution

2

1229629

1.0780

Family Size

4

47465511

41.6112

Interaction

8

2131317

1.8614

215

1140691

Error

Probability
Less Than

F

0.3422
0.0001*
0.0664

Significant at the .01 level.

mean reported variable expenses, but Table 4.5 reveals that
the direction normally anticipated did not materialize in
its entirety.

It can also be seen from the analysis of

variance Table 4.4 that no interaction existed between the
institution and family size variables.

TABLE 4.5.— Wei gh te d Means for Family Units of Financially
Independent Students.
No.
Single,
Married,
Married,
Married,
Married,

no children
no children
one child
two children
three or more children

Weighted Mean

90

$2308

76

3453
4231

35

18
11

4857
4588

75

The mean expense figures for each of the five family
sizes are listed in Table 4.5.

As mentioned above, the

significant effect of family size is numerically represented
there, but the usual predicted increase in weighted mean as
family size increased did not hold true for the largest
family unit.
Based upon

this analysis,

the null hypothesis

antitipating no differences among the mean variable expenses
reported by institution type attended
rejected.

(Ho^) was not

Although family size was found to significantly

affect mean reported variable expenses, a linear relation­
ship was not found to exist between family size and amount
of education related expenses incurred.

Due to the dif­

ferences found, however, Ho^ was rejected.

The null

hypothesis predicting no interaction between the institution
and family size variables

(Ho7 ) was not rejected.

The last hypothesis concentrates upon comparisons of
mean cost data presented by each of the five classifications
of independent students with cost levels for the same
expense items considered reasonable by the U.S. Office of
Education.

As with its counterpart hypothesis pertaining

to financially dependent students,

so was hypothesis eight,

as presented in Chapter I, stated in general terms to
insure an accurate perception and understanding of the
problem under consideration.

Here also, in the actual

statistical analysis the mean expense figures reported by

76

studeivts in each of the family size categories were tested
against their counterpart figures recommended for use by
the U.S. Office of Education.

Five separate t-tests were

run, each of which allowed for the formulation of an
hypothesis presented in the null form and relating to the
specific comparison under consideration:
HOga :

The reported mean variable expense incurred
by independent students who are single and
have no children does not differ significantly
from the variable expense figure recommended
for them by the U.S. Office of Education.

H°Bt):

r*’*ie s p o r t e d mean variable expense incurred
by independent students who are married and
have no children does not significantly
differ from the variable expense figure
recommended for them by the U.S. Office of
Education.

Ho_c :

The reported mean variable expense incurred
by independent students who are married and
have one child does not significantly differ
from the variable expense recommended for
them by the U.S. Office of Education.

Hog.:

The reported mean variable expense incurred
by independent s tudents who are married and
have two children does not significantly
differ from the variable expense figure
recommended for them by the U.S. Office of
Education.

Ho.

:
e

The reported mean variable expense incurred
by independent students who are married and
have three or more children does not signifi­
cantly differ from the variable expense
figure recommended for them by the U.S. Office
of Education.

The results of the t-test applications in Table 4.6
reveal that the cost figures recommended as reasonable by
the Office of Education differ significantly from the
reported actual costs of two groups of independent students:

77
TABLE 4.6.— Comparison of Reported Costs of Financially
Independent Students and Costs Recommended
by the U.S. Office of Education.*

Family Status

Mean

U.S.
Office
Cost

Diff.

Single, no children

$2231

$2000

Married, no children

34 53

Married, one child

t

Sig.**

$231

2.4654

.016

2800

653

5.3524

<.001

4206

3500

706

3.9870

<.001

Married, two children

4657

4100

757

2.5509

.021

Married, three or more
children

4588

4700

-111

-.1780

.862

Cost items included for analysis:
Rent or House Payments
and Utilities, Food and Other Grocery Items at Place of Residence,
Clothing, Child Care, Uninsured Medical and Dental Expenses,
Entertainment, Incidental.
**

.01 level of significance.

married— no children, and married— one child.

The mean

variable expenses reported by the other respondent groups
did not differ significantly from the cost levels considered
reasonable for them.
Based upon this analysis the null hypothesis antici­
pating no significant differences at the .01 level between
U.S. Office of Education recommended cost figures and the
actual mean expenses incurred by
no children,

(1) single students with

(2) married students with two children, and

(3) married students with three or more children
H°8d' Hofie^ were not rejected.

(Hog a ,

The null hypotheses pre­

dicting no significant differences at the .01 level between

78
U.S.O.E.

recommended cost figures and the actual mean

expenses incurred by
and

(1) married students with no children,

(2) married students with one child, were rejected.
I nterpretation.— The application of analysis of

variance to the cost data collected from financially
independent students has demonstrated that type of higher
education institution attended did not significantly affect
the average expenses incurred for certain cost items by
this group of students.

ANOVA revealed that family size

did affect the mean variable expenses incurred but a listing
of w e i gh te d means for the five family category demonstrated
that not in all cases did costs increase as family size
increased.

Possible causes for this phenomenon will be

discussed later in a section devoted to a presentation of
mean expense levels for

individual cost items for various

classifications of students.

From the table of weighted

mean expenses it can be seen that costs increased as family
size increased in all cases except the largest family unit
under investigation:

married— three or more children.

The

fact that no significant interaction effect existed between
institution type and family size demonstrated that these
variables, w hen taken together,

did not affect the level

of mean variable expenses incurred by independent students.
In the comparisons made between students'

expense

levels and levels considered reasonable by the U.S. Office

79
of Education, significant differences occurred in only
two instances.

However, it should be noted that for the

purposes of this analysis three major expense items were
omitted from the students' and the Office of Education's
cost figures:
and

(1) Book and Supplies,

(3) Car Payments.

(2) Transportation,

The Office of Education excluded

these items intentionally;

so to provide a meaningful

comparison, the same items had to be omitted from the mean
variable expenses generated for independent students.
Given the cost items included for analysis it can be
concluded that for single respondents with no children,
married respondents with two children, and married
respondents with three or more children, the respective
means

($2231, $4,857,

$4,588) compared favorably with the

corresponding cost levels recommended by the Office of
Education for the same sized family units

($2,000, $4,100,

$4,700).
General Review of Expenses on a
Per Item Basra
Tables 4.7 through 4.10 are presented to provide
more detailed information about the individual expense
items which together comprised the total mean expenses
which were analyzed in the first part of this chapter.
For Tables 4.7, 4.8, and 4.9 the review pertains
to average expenses incurred by various classifications of
financially dependent students.

All cost figures reported

80
TABLE 4.7.— Mean Expenses of Dependent Students by Type of
Institution and Residency Arrangement:
FourYear Public Institutions.
Dormitory

Books and Supplies
Rent
Food (Groceries)
Transportation
Clothing
Medical
Entertainment
Incidental

Dollar
*
^
Amount

No.

$122

381

-

-

-

-

WEIGHTED TOTAL
Car Payment

277
381
381
36 2
363

130
135
44
149
78
$651
$396

With Parents
Dollar
Amount

No.

Dollar
Amount

No*

$115
431
397
376
156
66
210
95

113
95
98
106
113
113
112
110

$120
692
361
241
142
73
165
92

167
163
160
141
167
167
163
163

$1, 878

$1 ,776
22

Other Off-Campus

$689

35

$567

28

TABLE 4.8. — Mean Expenses o f Dependent Students by Type of
Institution and Residency Arrangement:
Two and
Four-Year Private Institutions.
Dormitory

Books and Supplies
Rent
Food (Groceries)
Transportation
Clothing
Medical
Entertainment
Incidental
WEIGHTED TOTAL
Car Payment

With Parents

Dollar
Amount

No.

Dollar
Amount

$122
-

185

$128
430
354
337
205
77
172
107

-

172
164
57
148
83

145
185
185
176
181

$736
$567

NO.

93
78
76
88
93
93
90
92

$1, 745
13

$425

Other Off-Campus
Dollar
Amount
$133
656
408
369
165
55
242
119

NO.

55
55
54
50
55
55
52
53

$2,127
23

$469

15

81

TABLE 4.9.— Mean Expenses of Dependent Students by Type of
Institution and Residency Arrangement:
TwoYear Community/Junior Colleges.
Dormitory

Books and Supplies
Rent
Food (Groceries)
Transportation
Clothing
Medical
Entertainment
Incidental
WEIGHTED TOTAL
Car Payment

Dollar
Amount

NO.

$ 94

11

-

-

-

-

205
113
47
169
62

7
11
11
9
11

1

Other Off-Campus

Dollar
*
,
Amount

„
No.

Dollar
_
.
Amount

$ 92
387
350
345
155
76
197
95

227
187
197
221
227
227
216
225

$ 87
638
400
424
180
79
167
115

$1 ,572

$643
$2,800

With Parents

$ 493

No.

22
21
22
19
22
22
21
22

$2 ,091
73

$638

9

by respondents were accepted and utilized in determining
means.

As every school has its own room and board charges

for dormitory students, the figures reported by students
for those items were excluded.

The variation in numbers

who reported individual expense figures reveals that not
all respondents filled out the survey form completely.

The

weighted totals were determined by multiplying the average
dollar amount for each item by the number who entered a
dollar figure for that item and adding the p r o d u c t s .

The

sum was then divided by the average number of respondents#
which division produced the weighted total.
is not included in the weighted total.

Car payment

TABLE 4,10,— Mean Expenses of All Independent Students by Marital Status and Number
of Dependents.
Single

Married

No Children

No Children

Dollar
Amount

No.

Dollar
Amount

$ 135

95

$ 126

Rent or House Payments
plus Utilities

899

92

Food (Groceries)

559

Transportation

One Child

Two Children

Three or
More Children

Dollar
»
Amount

No-

Dollar
»
Amount

No-

Dollar
»
^
Amount

No.

87

$ 148

39

$ 121

21

$

90

18

1,598

84

1,768

39

1,924

21

1,408

17

89

958

94

1,197

39

1,325

21

1,502

17

450

90

543

83

552

38

559

21

479

17

Clothing

219

95

233

87

260

39

391

21

196

18

Child Care

-0- -0-

-0- '0-

311

39

299

21

145

18

Medical

135

95

230

87

228

39

309

21

167

18

Entertainment

276

95

279

84

224

37

190

20

209

17

Incidental

183

95

197

87

197

39

184

21

192

18

Books and Supplies

WEIGHTED TOTAL
Car Payment

$2 ,828
$821

24

$4,136
$771

43

$4,859
$907

22

$5,293
$764

14

188
$784

7

83

To be considered financially dependent the
respondents answered YES to either question 9 or 10 in
Section A of the survey instrument.
In Table 4.10 the approach taken to the computation
of means for individual expense items reported by finan­
cially independent students was basically the same as for
those who were financially dependent upon their parents.
However, any independent students who indicated that they
resided in a dormitory were excluded from the computation.
A NO response to both questions 9 and 10 in Section A of
the survey instrument was required to classify a student
financially independent.
A comparison of weighted totals in Table 4.10 with
the weighted means for the same groups of students in
Table 4.5 at first glance appears to reveal a severe
discrepancy.

Therefore it should be pointed out that the

weighted means in Table 4.5 were compiled with the
exclusion of two individual expense items which are
included in Table 4.10:
Transportation.

Books and Supplies, and

Car payment is excluded from both the

weighted means and weighted totals in Tables 4.5 and 4.10
respectively.

Because of different n's some discrepancy

is inevitable throughout.
Earlier in the discussion reference was made to the
unexpected decrease in total expenses when the respondent's

84
number of dependents increased to four or more.

A brief

review of certain items may reveal possible causes for
the decrease.
Books and Supplies— with limited f u n d s , student
may be more apt to buy used b o o k s , or to
borrow books from professors and library.
Rent or House Payments plus Utilities— may be
forced into low cost housing; still averaging
over $200 a month.
Food (Groceries)— one area where sacrifices
not made.
Transportation— less travel with larger family.
Clothing— possibly more hand-me-downs and home
made garments.
Child Care— perhaps too expensive for mother
to w o r k .
Medical— less panic and more home remedies.
Entertainment— not out of line.
Incidental— not out of line.
By and large the information contained in Tables
4.7-4.10 is self explanatory;

the tables were listed to

provide a general review of expenditures on a per item
basis for purposes of comparison and for individuals
interested in the itemized cost figures reported by
specific classifications of students.
Summary
The results of data analyses presented in this
chapter indicate that for both financially dependent and
independent full-time undergraduate students in Michigan,

85
the type of higher education institution attended did not
appear to affect the amount of m o ne y expended b y them for
variable expense items, i.e.,

items the purchase and con­

sumption of which they have some control.

Residency

arrangement of financially dependent students did affect
the level of expenditures incurred by them for variable
cost items, and w h e n the mean expense levels for this
analysis were presented in table form it appeared that
students residing in campus dormitories incurred the
lowest level of expenses,

followed by students residing

w ith parents, and in other off-campus housing,
order.

Although it was

in that

found that the institution and

residency variables, w he n considered together, affected
the level of expenses incurred by dependent students,

the

effect seemed to be caused entirely by an unexpectedly low
expense level reported by dependent students residing in
off-campus housing away from parents and attending four
year public institutions.
A comparison of certain costs realized by dependent
students in various residency situations with cost levels
used by the Michigan Department of Education revealed
that students

(1> residing with parents, and

{2) living

in other off-campus housing did not spend the amount of
money considered reasonable for them by the Department of
Education, but exceeded the Department's figures.
Dependent students residing in dormitories reported

86

expenses very closely in line with figures used by the
Department of Education.
For financially independent students the level of
expenses varied with family size, but not necessarily in
the order normally anticipated.

Expenses increased as

family size increased with the exception of the five or
more member families, whose reported costs fell below the
level for the four member families.
A comparison of costs, similar in design to the
comparisons made between dependent students1 actual costs
and Michigan Department of Education recommended cost
levels, was made also with cost data from financially
independent students.

For the students in this latter

group, their mean expense data was compared with U.S.
Office of Education suggested reasonable expense levels
for various sized family units.

These analyses revealed

that the amount of money expended for variable cost items
by married students with no children and married students
with one child differed considerably from the cost figures
recommended for them by the Office of Education.

The

cost levels incurred by the other three family sized units
were in line with U.S.O.E.

figures.

The last section devoted to any kind of data
analysis contains average expense figures for various
classifications of financially dependent and independent
students on a per item basis.

The statistical analyses

87
previous to this were based upon mean totals, and the
final, general information section provides for a review
of the individual expense items which comprised those
totals.

CHAPTER V
SUMMARY, CONCLUSIONS, DISCUSSION,
AND RECOMMENDATIONS
Introduction
The purpose, objectives, and research design of
this study are summarized in this chapter.
discussion,

Conclusions,

and recommendations are based upon the results

of the study.
Summary and Conclusions
An important part of student financial aid adminis­
tration is the determination of financial need, for it is
usually financial need, rather than any other single
criterion that determines the amount of money a student is
eligible to receive in financial assistance for a given
academic year.

A critical aspect of financial need deter­

mination is the computation of an amount of money which is
normally required by students to meet education related
expenses during a particular school year, commonly referred
to as the student b u dg et .
The purpose of this study was to analyze the
education related expenses incurred by various classifica­
tions of full-time undergraduate students attending three
types of higher education institutions in Michigan.
88

89

Actually, two independent, but related, analyses were per­
formed on d ata collected from various classifications of
financially dependent and independent students, respectively.
Financially independent students were defined as those
whose parents or legal guardians did not claim them as
federal income tax exemptions in either 1970 or 1971, and
whose parents or legal guardians did not provide more than
$200 in support,

including value of room and board, during

either 197 0 or 19 71.

The financially dependent students

were classified by institution attended

(public junior/

community college, two and four year private colleges and
universities,

or four year public institutions) and

residency arrangement
off-campus h o u s i n g ) .

(dormitory, with parents, or other
Financially independent students

were classified by institution attended
and size of family unit

(same as above)

(single— no children, married—

no children, married— one child, married--two children, or
married— three or more chi ld re n) .
The more specific objectives of the study included
determining for dependent students the effect of certain
variables on their level of spending for education related
expenses, and comparing their actual expense figures with
dollar amounts for identical items considered reasonable
and used by the Michigan Department of Education.
analyses relate to the following concerns:

These

90

1.

Does the type of college attended influence
the total amount of money expended by dependent
students for certain education related expense
items;

2.

Is the amount of money expended affected by
the students'

3.

residency arrangement;

Do institution type and residency arrangement
work together to influence levels of
expenditures;

4.

How do the total expense levels for certain
cost items of students in each of the three
residency arrangements compare with cost
levels used for these students by the
Department of Education.

A second set of data relating to financially
independent students allowed for additional statistical
analyses related to, but independent from,
pertaining to dependent students.

the analyses

For independent students

the analyses relate to the following questions:
1.

Does the type of college attended influence
the total amount of money expended by independent
students for certain education related expense
items;

2.

Is the amount of money expended affected by
the students'

family size;

91
3.

Do institution type and family size work
together to influence levels of expenditures;

4.

How do the total expense levels for certain
cost items of students in each of the family
size categories compare with the cost levels
recommended for these students by the U.S.
Office of Education.

The selection of students for this study was done
randomly on a proportional basis.

First, Michigan colleges

and universities with 1970-71 full-time undergraduate
enrollments exceeding ninety and which participated in the
State of Michigan Tuition Grant or Competitive Scholarship
Programs, were selected.

Secondly, based upon a sample

size of 5000, a number of students for each school was
randomly selected which was the same percentage of 5,000
as that institution's full-time undergraduate enrollment
was of the total full-time undergraduate student population
of all schools selected for inclusion in the study.

Every

college was sent the list of randomly selected numbers
from its population count along with the same number of
survey instruments and was requested to select student
names for the study from its roster, using the list of
random numbers to select appropriate students.

As not all

selected institutions participated in the study the sample
size was reduced to the number of students selected at
schools which did participate.

92

The survey instrument was designed for the col­
lection of both demographic and financial information from
student respondents.

The demographic items p rovided the

means by which respondents were classified into institu­
tional r residency, and family size variables.

The expense

items used in one or more of the analyses were the follow­
ing:

(1) Books and Supplies,

and Utilities,

(2) Rent or House Payments

(3) Food and Other Grocery Items at Place

of Residence,

(4) Transportation,

(6) Clothing,

(7) Child Care,

Dental,

(9) Entertainment,

(5) Car Payments,

(8) Uninsured Medical and

(10)

Incidental.

Tuit io n and

fees were not used in the analyses but students w e r e asked
to list the cost for that item, to insure against forcing
it into some other cost area.

Collected and useable data

was statistically treated by analyses of variance and
several applications of the t-test.

Analysis of variance

was used to detect any significant differences between
mean expenses levels of various classifications of students,
and the t-test provided comparisons of actual expense levels
with suggested, or recommended,

expense levels for identical

cost items.
The following we r e among the major findings of this
study:
1.

For financially dependent students,

type of

higher education institution attended did not
substantially affect the me a n reported
variable expense level.

93
2.

For financially dependent students residency
arrangement did significantly affect the mean
reported variable expense level.

3.

a.

Dormitory,

$1,748.

b.

With parents, $1,917.

c.

Other, off-campus $2,0 36.

For dependent students, institution type and
residency arrangement appeared to work together
to affect the mean reported variable expense
level.

4.

Three out of the four m e a n expense levels
reported by dependent students in various
residency arrangements significantly varied
from the expense levels used for those students
by the Michigan Department of Education in
determining student financial need.
a.

Mean of students residing with parents
exceeded Department figure.

b.

Mean of students residing in other offcampus housing exceeded Department of
Education figure.

c.

Combined means of dormitory residents and
students in "other, off-campus" housing
exceeded Department of Education figures.

94

d.

Mean of dormitory residents alone was very
much in line with Department of Education
figures.

5.

For

independent students, institution attended

did not appear to affect the mean reported
variable expense level.
6.

Family size of independent students did appear
to significantly affect the mean reported
variable expense level.

However,

in all cases

there was not a corresponding rise in expense
level as family size increased.

The mean

expense level for the five or more membered
family fell below that of the next smaller
family.
7.

It was not determined for independent students
that institution type and family size worked
together to affect the mean reported variable
expense level.

8.

Two out of the five mean expense levels
reported by independent students with various
sized family units varied significantly from
the expense levels recommended as reasonable
for them by the U.S. Office of Education.
a.

Single— no children— did not differ.

b.

Married— no children— differed {student h i g h e r ) .

c.

Married— one child— differed

(student h i g h e r ) .

95

d.

Married— two children— did not differ.

e.

Married— three or more children— did
not differ.

It can be safely concluded from the interest in and
financial support for this study by the Michigan Department
of Education and the Michigan Student Financial Aid
Association,

that those two organizations are concerned

about the education related expenses incurred by students
as they relate to the determination of student budgets.

As

mentioned earlier in Chapter I , the determination of
student budgets is a critical aspect of the total financial
need analysis methodology.

The student budget, as much as

any other factor, determines the amount of financial need
which students demonstrate.

Given the integral function

of student budgets, the close relationship of this study
to student budget determinations, and allowing the tenta­
tive assumption that the means of expenses recorded by
students in the study were reasonable, several conclusions
can be drawn.
1.

For state and federal governmental agencies,

as well as other non-college organizations that administer
financial aid programs for financially dependent and
independent students attending numerous colleges and
universities,

it should not be necessary to establish

different sets of budgets for various types of institutions

96

attended.

The institution variable did not affect levels

of expenditures, which would allow standardization of
budgets for dependent students and independent students
respectively.
2.

For all financial aid programs pertaining to

dependent students where financial need is an eligibility
criterion, individual student budgets should be generated
for students residing in each of the three generally
recognizable housing arrangements.

Not only should student

budgets for each of the three residency plans differ, but
they should ascend in the following order:
students,

(1) dormitory

(2) students residing with parents,

(3) students

living in other off-campus housing.
3.

The Michigan Department of Education has not

been using the most appropriate cost figures for all
residency arrangements in the determination of budgets for
financially dependent students.

Analysis of the data

pertaining to comparisons of actual student expenses and
Department of Education figures, revealed that, with the
exception of dormitory residents, the cost figures used
by the Department of Education for various housing arrange­
ments were too low during the 19 71-7 2 academic year.

This

situation caused the total student budgets for the housing
plans under investigation
unrealistically low.

{not dormitory)

to be

Following the need analysis pro­

cedure to its conclusion, the resulting financial need

97

(Student Budget minus Family Contribution)
was also unrealistically low.

determined

The residency plans in

which major cost discrepancies existed were:
parents,

(2) other off-campus housing, and

(1) with

(3) a combina­

tion of the expenses of dormitory residents and students
residing in other off-campus arrangements.

The cost

comparison was done with the combination of costs because
the Department of Education considered those two residency
plans identically for financial need determination purposes.
4.

Although the education related costs incurred

by financially independent students varied with family
size, the costs did not rise in all cases as family size
increased.

The obvious conclusion can be drawn from this

analysis that budgets for independent students must be
individualized, based upon family size, but it cannot be
determined from the study what the increase or decrease
should be for expenses as family size changes.
5.

The budgets recommended for independent students

by the U.S. Office of Education were not appropriate for
all family size units.

For the two family categories whose

actual expenses differed significantly from the budget
figures recommended for them by the U.S. Office
no children, married— one child)

(married—

it can be concluded that

the financial need figures generated for them were distorted,
having presented an unrealistically low need factor, to
the disadvantage of the students.

98

Discussion and Recommendations
The exploratory nature of this research project and
the dearth of published materials related to it prohibit a
discussion of the study as it pertains to other contributions
in the field.

Therefore,

the discussion henceforth is

mingled with recommendations and implications for future
research and the contribution to student financial aid
administration that was made by the study.
The results of this study reinforce the claim that
student budgets used currently by financial aid administra­
tors in the determinat

»n of financial need are not

necessarily valid and do not reflect reasonable expense
levels to be incurred by college students.

In several

instances students in this study reported expenses which
varied substantially from recommended levels of state and
federal governmental agencies.

One of two simple conclu­

sions can be drawn from these analyses:
students'

either the

reported actual costs for education related

expense items are unreasonable or the federal and state
offices' estimates for the costs are unreasonable.

If

nothing else this study has provided something more than
speculation as to what students are and ought ,to be
spending for education related expense items.

The data

revealed that flexibility is an essential ingredient in the
determination of student budgets.

Various student groups

99

revealed different spending p a t t e r n s , and the treatment of
those groups should be individualized as much as possible.
Now that there are definite cost figures to compare from
both student and agency sources,

the problem becomes one

of conducting further research into the reasonableness,

or

fairness, of cost data from both sides with the goal of
determining the fairest possible student budgets.
If further research should be desired on costs
incurred by students attending Michigan colleges and uni­
versities several recommendations should be made.

As the

response rate for this study was lower than desired and
adequate measures were lacking which w ould insure proper
follow-up attempts,

in the future fewer institutions

should be selected, on a random basis, which in turn would
result in a smaller sample size.

The researcher should

have to rely on as few individuals as possible w h e n carrying
out the research project.

Working with fewer representative

institutions and students would provide the researcher with
more control over all facets of the study.

To facilitate

follow-up attempts intended to increase the response rate,
when student participants are contacted a second time they
should be provided with a duplicate survey instrument-

The

most prominent hindering factor in this study was the large
sample size,

attended by the high level of cooperation

needed from the financial aid offices at the participating
institutions.

The cooperation received while carrying out

100

this study was invaluable but the large numbers of colleges
and their scattered geographical locations made it
impossible to insure that every step of the survey instru­
ment distribution and collection processes were accomplished
in the most efficacious manner.
Several questions surfaced as a result of this study
which pertain to the need for related research in the area
of student budget determination.

One such question concerns

whether or not student budgets should be individualized for
other student groups than were analyzed in this study
sex, class s t a n d i n g ) .

Undoubtedly,

(race,

there is a point beyond

which the proliferation of student budgets w o u ld make them
impossible to handle,

administratively.

Nevertheless,

this

should not deter from researching the subject w ith the goal
of assessing fairly and objectively the financial needs of
as many students as possible.

Similarly,

as the Higher

Education Amendments of 1972 allow for financial aid con­
sideration of part time students,
studied as well.
students,

this group should be

Graduate students and international

respectively,

present still another set of needs

worthy of investigation.
Another issue w h ic h must be addressed is the inclusion
or exclusion of a sum for car payments in the total student
budget.

As not all students own automobiles,

the provision

for car payment expense in the student budget is a
particularly volatile issue in contemporary financial aid

101

administration.

The data in this study revealed that car

payments comprise a substantial portion of the students'
total expenses, so their exclusion or inclusion in student
budgets would involve a major policy decision.
Student budgets,

to be fair to all parties, must be

set at levels which provide not only for physical w e l l ­
being, but for psychological comfort as well, while at the
same time insuring against a level of spending that would
be higher than reasonable.

If this goal can be attained,

it will establish soundly the most critical eligibility
criterion in the allocation of financial aid to college
students.

BIBLIOGRAPHY

102

BIBLIOGRAPHY

Boyd, Joseph D.
"19 71-72 Undergraduate Comprehensive
State Scholarship/Grant Programs."
Third Annual
Survey, Illinois State Scholarship Commission,
Deerfield, Illinois, September, 1971.
Cole, Charles C . , Jr.
"Future Directions for the College
Scholarship Service."
Student Financial Aid and
Institutional Pur^>ot>e. Princeton: College
Entrance Examination Board, 1963, pp. 17-28.
College Scholarship Service.
Manual for Financial Aid
Officers, 1971 Edition"
New Y o r k : College
Entrance Examination Board, 19 71.
Dyer, James S.
Assessing the Effects of Changes in The
Cost of Higher Education to the Student. Santa
M o n i c a , C al i f . : Rand Corp.^ June, 1970, p. 13.
Eliot, Charles W.
University Administration.
Houghton MiF7!Tn"7 19 08, p~. 215.
Financing Higher Education. Atlanta, Georgia:
Regional Education Board, 1966, 94 pp.

Boston:
Southern

G i d d e n s , Thomas R.
"The Origins of State Scholarship
Programs:
1647-1913."
College and University.
American Association of Collegiate R e g i s t r a t s a n d
Admissions Officer, X L V I , No. 1 (Fall, 1970),
37-45.
Haven, Elizabeth W . , and Horch, Dwight.
How College
Students Finance Their Education. College
Scholarship Service, Coilege Entrance Examination
Board, 1972, 60 pp.
Hofstadter, Richard, and Smith, Wilson.
American Higher
Education:
A Documentary History"
Chicago:
University of Chicago Press, 1961, Vol. II, p. 613.
Johnson, Richard.
"Student Budgets--Where Are We?"
MASFAA Newsletter, February, 1972, p. 2.

103

104
Michigan Department of Education, Student Financial
Assistance Services.
College Estimate of Student
Expenses. Scholarship- ancl Tuition d»rant Programs ,
1971-72.
Morse, John F.
Student
Aid and
College

"The impact of Government Programs on
Aid Administration." Student Financial
Institutional Purpose. Princeton:
Entrance Examination Board, 196 3, pp. 6-16.

Mueller, Kate H. Student Personnel Work in Higher
Education. Boston:
Houghton Mifflin C o . , 1961,
4 £8.
O r w i g , M.D.
Toward More Equitable Distribution of
Student Financial Aid Funds:
Problems in Assessing
Student Financial N e e d . Iowa City: LAmerican
College Testing Program, May, 1971, p. 2.
Rudolph, Frederick.
The American College and University.
New York: Alfred A. Knopf, 19<j2.
_________. "The Origins of Student Aid in the United
States."
Student Financial Aid and National
P ur po se . New Y o r k : College Entrance Examination
B o a r d , 19 62.
Shaw, Hubert S.
"Program Development Administrative
Memorandum No. 2072."
Department of Health,
Education, and Welfare, September 28, 1971.
Student Budget Survey, 19 70-71, unpublished report done
by Office of Student Financial Aid, University
of Michigan, 19 71.
VanDusen, William D. A Design for a Model College
Financial Aid O f f i c e . New Y o r k : C o l l e g e Entrance
Examination Board, T968.
_________. "Toward a Philosophy of Student Financial Aid
Programs." NASPA Journal, IV, No. 1 (July, 1966),
3-7.
West, Elmer D. Financial Aid to the Undergraduate.
Washington, D .C .: American Council on Ed u cation,
1963, p. 79.

APPENDIX
SURVEY INSTRUMENT AND LETTER OF
INSTRUCTIONS TO FINANCIAL AID
OFFICERS FOR DISTRIBUTION
TO STUDENTS

105

UI-riLt Uf

M N A N ( . I A L AID

L a n s in g C o m m u n ity C o lle g e
L a n s in g , M ic h ig a n 4 9 4 2 3

COLLEGE STUDENT EXPENSE SURVEY
ent
ja n S tu d e n t F in a n c i a l A id A s s o c i a t i o n , w ith t h e c o o p e r a tio n o f t h e M ic h ig a n D e p a r t m e n t o f E d u c a t io n , w is h e s to d e te r m in e
e ly a s p o s s i b l e , w h a t th e e d u c a tio n r e la t e d c o s ts a r e fo r c o l le g e s tu d e n ts in M ic h ig a n . T h i s s u r v e y fo rm i s b e in g d is t r i b id o m ly s e l e c t e d s tu d e n ts a t t e n d in g v a r io u s ty p e s o f c o l l e g i a t e i n s t it u t i o n s th r o u g h o u t th e S t a te , w it h t h e h o p e t h a t w e c a n
u r a t e , m e a n i n g f u l d a t a c o n c e r n in g J h e e x p e n s e s in c u r r e d b y s tu d e n t s d u r in g t h e 1 9 7 1 — 72 a c a d e m ic y e a r ,
■rious p a r t i c i p a t i o n in t h is s tu d y w i l l e n a b le f i n a n c ia l a id a d m in is t r a t o r s to m o re a c c u r a t e l y d e te r m in e th e f i n a n c ia l n e e d s o
e e k in g a s s i s t a n c e , y o u r e f f o r t s in c o m p le tin g t h is s u r v e y a r e s in c e r e ly a p p r e c ia t e d .

INSTRUCTIONS:
F IN A N C IA L

S T U D E N T - A s time is important for data
A ID O F F IC E on y o u r ca m p u s

compilation, please return the completed survey to the
by A P R I L 2 4 , 1 9 7 2 .

F IN A I

A I D O F F I C E R - T o a l l o w s u f f i c i e n t t i m e fo r f o ll o w - u p , p le a s e r e t u r n c o m p le t e d s u r v e y fo rm to th e a d d re s s
in d i c a t e d a b o v e b y M A Y 1 5 , 1 9 7 2 .

SECTION A
L IN FO R M A TIO N
IF S C H O O L Y O U A T T E N D
On I y }
P U B L IC

6,

M A R IT A L S T A T U S

( C h e c k O n e O n ly )
C o m m u n ity or J u n io r C o l le g e

r~ |

a.

S in g le

2 Y e a r P R I V A T E C o lle g e

m

b.

M a r r ie d

4 Y e a r P R IV A T E

□

c.

D iv o r c e d o r S e p a ra te d

4 Y ea r P U B L IC

C o lle g e or U n i v e r s i t y

C o lle g e o r U n i v e r s i t y
7.

STANDING

NUMBER OF

YOUR

D E P E N D E N T C H IL D R E N

(C h e c k O n e O n ly )
| f | a.

On! y )

None

F re s h m a n

fT |

b.

O ne

S o p h o m o re

f T | c.

Two

J u n io r

0

T h r e e o r M o re

d.

S e n io r
3.

ARE YOU A P E R M A N E N T
STATES?

M a le

m

a.

Yes

F e m a le

m

b.

No

9.
D nl y )
A m e r ic a n Indian

R E S ID E N T O F T H E

U N IT E D

W E R E Y O U C L A IM E D A S A N IN C O M E E X E M P T IO N F O R
F E D E R A L IN C O M E T A X P U R P O S E S B Y P A R E N T S O R L E
G U A R D IA N S IN E IT H E R 1970 O R 1 9 7 1 ’

BI ack

fi~l

a.

Yes

S p a n is h S u rn a m e d A m e r ic a n

0

b.

No

O rie n ta l
W h ite a n d A ll O t h e r I n d i v i d u a l s N o t In c lu d e d A b o v e

10.

D ID Y O U R E C E IV E F IN A N C IA L A S S IS T A N C E O F M O R E
S 2 0 0 O F A N Y K I N D . I N C L U D I N G R O O M A N D B O A R D . FR<
P A R E N T S O R G U A R D IA N S IN E I T H E R 1970 O R 1 9 7 1 ’

NCE

Onl y)
D o rm ito ry

[~1

a.

Yes

□

b.

No

W ith P a r e n t s
A p a r tm e n t
R o o m in R o o m in g H o u s e
F r a te r n ity /S o r o r ity H o u s e
M a in ta in O w n Hom e

(P L E A S E C O M P L E T E T H E BACK SIDE, N O TIN G TH E D IR E C T IO N S WHICH ARE A P P L IC A B L E TO YOU)

1 Ofi

SECTION B
ECTIONS
I f y o u * n t w * r « d Y E S t o E I T H E R q u o t t i o n 9 . o r 10. an t h e fr o n t p a g e , t h e in fo r m a t io n in S E C T I O N B p e r t a in s t o t h e e n t ir e
r o a r . S a p ta rn b a r . 1971 — J u n e . 19 7 2 . P l e a s e b a a * y o u r c o m p u t a tio n o f e x p e n s e s o n a N I N E M O N T H s c h o o l r o a r , a n d rounc
f ig u r e s to t h o n e a r e s t w h o I a d o l l a r .
I f y o u a n s w a r a d N O to B O T H q u e s t io n s 9 . a n d 10, o n th o fr o m p a | « . t h o c o s t in f o r m a tio n r a q u a s t a d in S E C T I O N B p e r t a in *
T W E L V E M O N T H p e r io d . S o p to rrtb a r, 19 7 1 — A u g u s t, 1 9 7 2 . In e s t i m a t i n g y o u r e x p e n s e s b o tw o o n n o w a n d th o a n d o f A u g u *
th o s a m a t i m o p o r io d fo r l a s t r o a r a s a g u i d e l i n e . P l o a s o r o u n d r o u r f i g u r e s to th o n o a r o s t w h o I a d o l l a r .

E X P E N S E P E R IO D
( C h e c k O no O n l y)

n
1 |

9 M o n th s
12 M o n th s

4CIAL INFORMATION
IT IO N A N D

FEES

S

O K S A N D S U P P L IE S

S

N T O R H O U S E P A Y M E N T S A N D U T IL IT IE S

) D A N D O T H E R G R O C E R Y IT E M S A T
h N S P O R T A T IO N

<1f r “

' d ,n * w it h

Of h o u s e p iy m t n t s m tgh t b t )

P L A C E O F R E S ID E N C E

%

" '.'h lr T

^ .t

r o u r p o r tio n o f r o n t

o t f lm iT y ^ 'd

( I f y o u d r iv e a c a r t o s c h o o l, in c lu d e c o s t o f | i s a n d o i l , in s u r a n c e , m o in to n a n c o , e t c .; do
N O T in c lu d a c a r p a y m e n t s h e r o . I f y o u d o n o t d r i v o , e n te r c o s t o f b u s o r a i r f a r o , o r y o u r
sh a re o f a car p o o l)

s
%
%

I P A Y M E N T S ( F o r y o u r c a r o n fy )

%

3 T H IN G

%

LD CARE

( B a b y s i t t in g e x p a n s e a n d / o r n u r s e r y s c h o o l)

4 S U R E D M E D IC A L A N D

'E R T A IN M E N T

ID E N T A L

rAL

DENTAL

EXPENSES

( In c lu d e c o s t o f in s u r a n c e i f y o u p a y t h e p r e m iu m s )

(S n a c k s , m o v ie s , r e c o r d s , p la y s , c o n c e r t s , s p o r ts , e t c . )

EXPENSES

{ L a u n d r y a n d d ry c l e a n in g , s o a p , c o s m e t i c s , b o d lin e n , m e a ls A W A Y fr o m p la c e o f
r e s id e n c e fo r c o m m u tin g s t u d e n t s , e t c . )

%

s
$

s

- C an sin g t o m m u n ily t e
419 N

C A P IT O L

AVC , LA N S IN G .

M IC H IG A

«fvir>B fht
•f

April 5, 1972

Dear Colleague:

The student expense budget survey that was approved at the last
Association meeting is nearly ready to be implemented.
As there has
been a delay in printing the survey instrument, we are sending you
these instructional materials now, so that you will be able to
distribute the forms as soon as you receive them, which should be
within a week.
Enclosed you will find a list of randomly selected numbers.
They
represent the number of full-time, undergraduate students who should
be selected for the study at your institution.
The number of students
selected at each school is based upon the proportion that its full­
time undergraduate enrollment is to the enrollment of all schools
in the study.
The numbers are listed in descending order, so that
you can go down your roster and identify the appropriate students as
easily as possible.
If you do not have a listing of full-time under­
graduates only, please cross off students of all other classifications
before making your selections.
This is crucial, for inclusion of
other types of students will confound the results of our study.
If
your fill-time undergraduate enrollment is not high enough at this
time for you to utilize all the numbers listed, simply go as high as
you can and ignore the remainder.
Also, as the students will not be asked to identify themselves by name
on the survey form, please retain a list of those whom you select.
This is important, for if you have a response rate below 80% it will
be necessary to contact all students surveyed on your campus, to
request again that they return the completed form to you, if it had
not already been done.
Because of the late date, those institutions whose academic year is
completed by the first part of May will not be able to follow-up
without great difficulty.
If you are in that situation a follow-up
a t t e s t , resulting from an initial response of below 80%, would be
appreciated but not necessary.

The date by which the students are requested to return the form
to your office will be indicated clearly on the instrument itself.
We ask that you return the completed
forms to Neil at
Lansing
Community College by Monday, May 15, 1972.
As you can see, whether or not meaningful student expense data can
be generated from this study depends
upon the success
which individual
institutions have in recovering the completed survey forms. Without
your generous cooperation such a massive, important study could not
even be contemplated.
Thank you in advance for your participation
and we shall be in touch with you again shortly.
Sincerely Y o u r s ,

Neil G. Shriner
Chairman, Research Committee

James R. Bekkering
Member, ExOfficio

108