Mortgage meltdown may impact colleges

ANN ARBOR, Mo., Nov. 19 (UPI) -- A University of Michigan economist says higher education may be the next sector of the economy affected by the sub-prime mortgage mess.

Frank Stafford says a study by the university's Institute for Social Research indicates there is a connection between a family's home equity and college attendance of their adult children.

The institute's Panel Study of Income Dynamics found that parental home equity was a major predictor of college enrollment among a nationally representative sample of 745 families.

"About 64 percent of the children of homeowners were enrolled in college compared with about 33 percent of renters," said Stafford.

The University of Michigan study was conducted in 2005 when housing prices were at or near their high.

"Mortgages were easy to obtain and rapidly rising home equity led a lot of parents to feel that it was possible to help their children with college expenses," Stafford said.

The University of Michigan Institute for Social Research is among the world's oldest academic survey research organizations.