The subprime mortgage crisis could be a cause for decreased college enrollment, according to a University of Michigan professor.

“There is a strong association between home equity and the 18- to 20-year-olds enrolled in college,” said Frank Stafford, a professor of economics and a researcher and director of the Panel Study of Income Dynamics for the University of Michigan Institute of Social Research.

The study uses diverse selection of U.S. individuals and follows them and their children throughout their lives.

PSID, which was founded in 1968 by the National Science Foundation, has now gathered approximately three to four generations’ worth of economic, demographic, psychological and sociological data.

Stafford and his colleagues collected data about children under age 18 and monitored how parents’ financial conditions affected those who were 18 to 20 years old, paying close attention to how it could have affected college decisions.

From the data, they compiled an analysis and found a connection between parents who are homeowners — or who have high equity — and the likeliness that their kids attend college.

“A huge percent of college-enrolled students have parents who are homeowners,” Stafford said.

Morris Davis, assistant professor of real estate and urban land economics at the University of Wisconsin School of Business, said the connection between homeowners and the chance of their children attending college seems to be an obvious correlation.

“Wealthy people own homes, they’re the highly educated ones, they’re more likely to have highly educated kids,” he said. “The question is clearly, how do you deal with those issues?”

Stafford and his colleagues are set to do interviews with more 18- to 20-year-olds in fall 2009, which may be able to reveal how the recent mortgage crisis will affect soon-to-be high school graduates looking to enroll in college.

Stafford said he is anxious to hear the answer to one question in particular: Are students becoming much more reliant on their own earnings due to their parents’ situations?

“We have reason to believe there’s going to be some issues there,” Stafford said. “I think we’re going to see a lot more students having to rely on their income from their job. Student loans may be harder to get, parents don’t have the money and universities can’t give everyone a scholarship. Student jobs will become more important.”

Stafford intends to find the answer by asking the young adults in the study whether the work they’re doing is connected to their educational goals or just to have some spending money and pay the bills. He also predicts the interviews and surveys in 2009 will reveal a lower student attendance in colleges, both full-time and part-time.

Stafford said another interesting question is whether kids will be able to find other ways around their parents’ situations with scholarships or grants.