A comparative analysis of financial aid and college affordability in China and the United States

• In Event: Comparative Perspectives on Access, Diversity, and Employment Outcomes in Higher Education: Insights from China, the U.S., and Japan

Proposal

Education is not just a means of acquiring knowledge but a powerful tool for social mobility. However, opportunities for this upward mobility are often limited due to the high cost of education, particularly at the postsecondary level. The rapid increase in global postsecondary enrollment is accompanied by a widening educational attainment gap by socioeconomic status. Economic constraints have emerged as the most formidable barrier to equal access and participation in postsecondary education in many countries (Li et al. 2013; Dorn et al. 2020), underscoring the urgent need for action to ensure that education remains a pathway to a better future for all.

This study compares the financial aid systems of and college affordability between China and the United States. Utilizing two national survey datasets, it examines disparities in the financial burden of attending postsecondary education across institutional types in the two countries and then compares their financial aid systems to determine which is more affordable for low-income students. The analysis employs multivariate regression models that control for student demographic characteristics. Findings reveal that students in more selective colleges receive nearly double the amount of financial aid, and they incur a significantly smaller financial burden (about one-third of family income for students at selective colleges in both countries). College affordability widens after financial aid distribution as there is a significant negative relationship between financial burden and college selectivity. For low-income students, both China and the United States show similar postsecondary education affordability, with costs exceeding 60 percent of family income after financial aid, highlighting a critical area for policy intervention to expand access.

The results from two nationally representative datasets provide valuable insights for policymakers in both China and the United States to design more effective and equitable financial aid systems and borrow potentially beneficial features from each country to expand postsecondary education attainment. Simplifying application processes, increasing awareness about available aid, and ensuring that aid distribution is equitable across institutional types are vital steps in this direction. By fostering an inclusive educational environment where financial support is accessible to all students, regardless of their socioeconomic status or institutional type, a future where education truly serves as a pathway to a better future for all can be achieved.

Author

• Yutong Xie, STANFORD UNIVERSITY