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A college education has always been seen as the best path to social and economic mobility in American society, with public colleges and universities being the primary vehicle. But is that still the case? A white paper released last week by the National College Access Network (NCAN) raises major questions about whether public four-year colleges and universities are truly affordable for low-income students with the greatest need.
The white paper, titled “Shutting Low-Income Students Out of Public Four-Year Higher Education," concludes that only 25 percent of public, four-year residential colleges and universities are affordable for the average Pell Grant recipient. For public flagship institutions the percentage is only 10 percent. Sixteen states don’t have a single public college or university that qualifies as affordable using the NCAN formula.
How did NCAN come to this conclusion? It attempted to calculate whether the average Pell Grant recipient could pay the cost of attendance for an in-state, full- time student and have $300 remaining for emergency expenses after adding up the financial resources at the student’s disposal. Those resources include an Expected Family Contribution (EFC) of $2,075, the difference between the $3,740 average Pell Grant and the $5,815 maximum Pell Grant for 2016-17 (in March of this year the maximum Pell Grant was raised 3 percent to $6,095). Other possible financial resources include grant aid from federal, state, and institutional sources, federal student loans, federal work-study, and summer earnings from a minimum-wage job.
Of these potential sources of student revenue the NCAN analysis shows that summer earnings are essential. The affordable options for a student who is not able to contribute earnings from summer work drop to fewer than 20 institutions nationally using the NCAN formula. For the student in Texas with minimum-wage summer earnings ($3,480 based on 12 40-hour weeks) there are 15 “affordable” institutions, whereas the Texas student without summer earnings has one affordable option. For Georgia students without summer earnings the options drop from eight to zero.
A deeper look at the numbers provides some interesting information. The average price for an in-state college ranges from a low of just over $18,000 (North Dakota) to a high of nearly $31,000 (New Jersey). Wisconsin provides the least average grant aid and the most average federal loans. Alaska provides more than $1,000 more in federal work-study funds than the next highest state.
An appendix to the report acknowledges the challenges inherent in trying to develop a methodology that captures the complexity of this issue. An earlier iteration of the formula came up with an average institutional grant $4,000 higher, a figure that was determined to overestimate the grant aid that students actually receive. The student self-help figure assumes that the student won’t need to direct summer earnings to other, more immediate living expenses. The traditional definition of institutional cost of attendance, encompassing direct and indirect school costs as well as cost of living, has been called into question by recent research. And the federal government’s methodology for determining Expected Family Contribution has been criticized as outdated, as it is based on a family budget calculation that is 50 years old and does not take into account expenses that in 2018 are not discretionary, things like child care, internet access, and cell phone expenses.
So what conclusions should we draw from this report? Does this reflect the increasing gap between rich and poor in society at large, and is that okay? Should we accept the reality that going to college is ultimately an economic decision, even if we don’t like it? Even if we believe that going to college is a right, does that right extend to going to a particular type or caliber of college? Or do colleges and universities have a responsibility to be counter-cultural, to be engines of opportunity for students from low-income backgrounds?
There is plenty of blame to go around. The situation outlined by the NCAN white paper is a product of the serious decline in funding for higher education at the federal and state levels. When the Pell Grant was originally established, it covered 79 percent of a student’s educational cost. Today it covers 18 percent.
As state legislatures have reduced funding for public higher education, public colleges and universities have become more tuition-driven, including recruiting and admitting more out-of-state students to increase revenue. The competition for out-of-state students has led a number of public colleges and universities to offer scholarships to entice out-of-state students to enroll, and every dollar spent on those students is a dollar not available for low-income resident students.
It is also the case that higher education finds itself in direct competition with health care both with governments and with families. The increasing cost and expansion of programs like Medicaid take public dollars away that might otherwise be directed to higher education, and families concerned about paying for health insurance have less discretionary income for educational costs. It is also the case that the vast growth in the cost of higher education over the past 40 years does not inspire public sympathy. In a recent discussion about increasing the Pell Grant, critics of higher education predicted that colleges and universities would likely raise prices to match any Pell increase.
Other parts of the higher education landscape also bear some responsibility. It has been documented that elite colleges enroll more students from the top 1 percent of incomes than the bottom 60 percent, raising the question of whether they see socio-economic diversity as less a priority than other forms of diversity. The growth of for-profit colleges was built on an economic model that might be described as corporate Pell-fare, with the National Center for Education statistics reporting that
in 2012 more than 70 percent of full-time students at for-profits received Pell Grants. Then there are community colleges, which have inherited the “educate all inexpensively” mandate that land grant and other public institutions once had. Maryland is about to become the latest state to offer aid for students to attend a
community college for little or no cost.
That is laudable, but is it the same thing as access to a four-year degree? Only 35 percent of low-income students complete a bachelor’s degree after transferring from
community college.
The Pew Charitable Trust has called a four-year degree the surest path to the middle class for low-income and first generation students. The NCAN white paper
spotlights a situation that should give all Americans pause. We need to make sure that our students from socio-economically-challenged backgrounds have access to a college education for reasons both ethical and selfish.
