A University's Big Move on Socioeconomic Diversity

Using funds from its endowment to expand financial aid, Boston University notches sizable increase in proportion of its freshmen who come from low-income backgrounds.

September 7, 2017
 
President Robert Brown speaks to Boston U's Class of 2021 Sunday.

This is the time of year when every selective college or university worth its salt boasts about the academic credentials ("more National Merit Scholars than ever before!"), geographic reach ("students from 49 states and 37 countries!"), and, increasingly, the diversity of its freshman class.

One such announcement comes from Boston University today, and amid the many data points about its Class of 2021, one in particular stands out. With a single change in its financial aid policies -- wiping out all loan funds for any student eligible for a Pell Grant -- the private research university increased the proportion of its first-year students who qualify for the federal grants for low-income students to 18.2 percent this fall, from 14.6 percent a year ago.

The financial aid change and the roughly $25,000 investment per student was funded by a gift but represents a very purposeful decision by the university's president, Robert A. Brown, to use the institution's $1.7 billion endowment to drive the Pell percentage higher.

"To accomplish this, we made a decision to accept less in the way of [financial] reserves," Brown said.

The Context

Racial and ethnic diversity have long been a goal for academically selective institutions, but the pressure on them to enroll and graduate more students from low-income backgrounds has been building in recent years, amid data showing that such students are hard to find on many of the campuses. Organizations like the Jack Kent Cooke Foundation and the new American Talent Initiative have upped the pressure, arguing that everyone benefits if more low-income students are directed to institutions where they have the best chance of graduating.

A decade ago, BU didn't really even qualify as a selective institution; in 2005, it accepted 68 percent of applicants, a figure that has since dropped to 25 percent. Its competitiveness has been driven significantly by international student enrollment, which has helped increase its ethnic diversity but done little to improve the socioeconomic heterogeneity of its undergraduate student body. BU's proportion of roughly 14 percent Pell-eligible students put it in the middle of the pack among the 270 selective colleges that graduate at least 70 percent of their students.

Bob Brown thought his university could and should do better. So this year, capitalizing on a gift by a trustee, Richard D. Cohen, BU altered its financial aid policy to eliminate any need for loans for any student who qualified for a federal Pell Grant. That loan total typically comes to about $25,000 or $26,000. Dozens of selective colleges eliminated loans for students below certain income thresholds a decade-plus ago, but BU was not among them; in some ways this represents the university playing catch-up.

Last year 14.6 percent of its freshman class, or roughly 530 students, were Pell eligible. This year the number climbed to 18.2 percent, or 635 students, based on the university's Aug. 16 estimate (the total won't be finalized until the census date in October). The percentage of American-born students who are Pell eligible is even higher, roughly a quarter of the incoming class.

The promise of no debt, Brown surmises, appears to have persuaded students who in the past might have forsaken BU to enroll at more generous (or less expensive) competitors instead.

“We figured if we could increase the number of Pell Grant recipients in our entering class, we’d see a bump in diversity and open up some new paths of access to Boston University,” Brown said. “So we increased financial aid to meet full need -- without loans -- for most Pell Grant recipients. And it had an impact.”

A Significant Uptick

Boston University is not among the 83 selective colleges and universities that have so far joined the American Talent Initiative, the Bloomberg-funded effort aimed at increasing the number of low-income students at the country's top-performing institutions. But officials associated with the initiative applaud BU's move and say they hope others will follow suit.

"We're looking pretty closely at how the higher-graduation-rate institutions are moving from year to year because of the talent initiative, and BU's increase is on the higher end of one-year increases," said Martin Kurzweil, director of the Educational Transformation Program at Ithaka S+R and a member of the effort's steering committee. "It moves them from about average for selective private institutions to significantly above average."

The way Boston went about achieving the increase is also important, said Joshua Wyner, vice president and executive director of the Aspen Institute's College Excellence Program and another ATI leader. One of the keys to increasing the number of low-income graduates (along with sourcing students from different places and embracing practices known to help retain such students) is prioritizing need-based financial aid over other forms of student support, "and clearly BU has done that," Wyner said. "This shows the leadership and resource allocation that's often necessary to accomplish that."

Enrolling more low-income students is only part of the equation if American colleges are to meaningfully improve the lot of students from the country's lower socioeconomic tiers, Wyner said. "You have to make sure they have access to all fields, including STEM fields, access to research opportunities and the kinds of high-impact practices we know help students graduate."

BU's track record on that count is good: federal data collected by the Education Trust show that the university graduates 83.6 percent of its Pell-eligible students in six years, just a percentage point below its overall rate of 84.6 percent.

One interesting (and perhaps unknowable) question is where the 100-plus low-income students who enrolled at Boston University this fall would have gone had they not been enticed there. The vision of the American Talent Initiative and others who want more needy students to enroll at selective institutions is that those colleges and universities give the students a better chance to graduate and succeed than they would have at colleges where fewer students finish.

But if an institution like BU increases its enrollment of low-income students mainly, say, by wooing students away from slightly less wealthy institutions, and those institutions don't then go out and enroll and graduate more low-income students, the overall situation for needy students in the country won't improve.

"The shuffling of students across institutions without meaningfully increasing the number of those students is not progress," said Kurzweil of Ithaka. "What we're aiming for is to have the higher-graduation-rate institutions collectively serve, and serve well, many more low-income students. If that happens, we will have many more low-income graduates than in the baseline. It has to be a sectorwide movement."

But BU, he said, is a potentially heartening harbinger.

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