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Going to college financially benefits low-income students, but less so than peers who are not low income, according to a new report from the Georgetown University Center on Education and the Workforce. And the return on investment—the amount earned over time minus the full cost of attending college—can vary significantly for low-income students based on the kinds of institutions they attend.

The report, released today, noted that the average return on investment for low-income students is $756,000 over 40 years, lower than the average return of $822,000 for all students. The report findings include students who graduated and those who left college before graduating.

Students from families with a household income of $30,000 or below generally earn less over time than their peers—across public and private institutions and degree types—in part because they graduate at lower rates and tend to earn lower wages as adults, the report notes.

“In general … fewer go to college and fewer graduate from college,” said Martin Van Der Werf, an author of the report and the center’s associate director of editorial and postsecondary policy. “So if they don’t have the credentials, low-income people typically can’t earn more. What we do find over all in the literature is generations tend to not change too much. Someone who grows up in a low-income family has a higher chance of being a low-income person themselves.”

However, he noted that these explanations are “generalizations” and vary for individual students.

Robert Kelchen, professor of education and head of the Department of Educational Leadership and Policy Studies at the University of Tennessee at Knoxville, also noted that sometimes low-income students stay away from the more lucrative and time-consuming majors, such as engineering, because they have jobs and other responsibilities. Students may also lack the “social capital” or professional networks to connect them to well-paying jobs when they graduate.

Median annual earnings for low-income students are lower than those of students from wealthy families 10 years after enrolling in college, according to the report. Across institutions, the median six-year graduation rate for recipients of the Pell Grant—federal financial aid for low-income students—is 43.7 percent, compared to the overall graduation rate of 47.5 percent.

However, some types of institutions offer better returns than others. Low-income students accrue the greatest earnings over time, minus their college expenses, when they attend public universities that offer four-year degrees because of the relatively low costs of attending these institutions. For low-income students who attended public institutions, the return on investment over 40 years over is $951,000, about $88,000 more than if they attended a private nonprofit institution.

Maine Maritime Academy had the highest return on investment for low-income students—$2.2 million—among public four-year institutions.

“One of the lessons there is field of study matters quite a bit for earnings,” said Kelchen. “If you go to a very specialized technical institution, students do really well financially, rather than if you’re focused on, say, education, where they’re going to do OK but they’re not going to make hundreds of thousands of dollars a year out of the gate.”

Ranked as individual institutions, the top 24 colleges and universities were private nonprofits, including Georgetown, Stanford, Harvard and Tufts Universities and the Massachusetts Institute of Technology. However, these institutions serve relatively few low-income students—fewer than a fifth of students receive Pell Grants at most selective private institutions.

For-profit colleges offered low-income students the lowest net earnings over all, though the report notes some exceptions.

The authors argue that the colleges that could have the greatest economic impact on low-income students don’t enroll them in large numbers. Pell Grant recipients made up 64 percent of students attending a private for-profit college in the 2015—16 academic year, compared to between 34 percent and 38 percent at public four-year and two-year colleges and private four-year colleges. Meanwhile, colleges with high percentages of low-income students tend to offer lower returns.

Return on investment “is important, but students won’t get that ROI if they can’t go to these colleges,” Anthony P. Carnevale, the center’s director and lead author of the report, said in a press release.

“Colleges that do a great job for a small number of students, that’s not going to solve our broad public policy issues,” Kelchen said. “It’s great that the small number of Pell recipients from an Ivy League do really well, but that’s not going to move the needle that much over all.”

Low-income students’ returns from associate degrees and certificates can surpass $1 million over 40 years, according to the report.

“But more education generally leads to greater earnings, pretty much across the board,” so a bachelor’s degree is typically more lucrative, said Van Der Werf. “There are exceptions, but that’s the general rule.”

The report also provides a ranking of colleges based on the percentage of students receiving Pell Grants, graduation rates of Pell Grant recipients and how 40-year earnings of Pell Grant students compare to those from other colleges.

While some private, selective universities offer some of the highest returns on investment to the scant low-income students they serve, the authors also wanted to recognize colleges that “actually admit more low-income students and see them through to graduation,” Van Der Werf said.

The list that resulted was “somewhat surprising,” according to the report. Two specialized private for-profit colleges are at the top of the list, Neumont College of Computer Science in Utah and SAE Expression College in California, while University of California and California State University campuses make up the majority of the top 20.

Van Der Werf said the findings largely confirm prior research that “there’s a number of public institutions that do a really good job of giving increased social mobility” to students from low-income households.

He noted that the report has several practical takeaway messages, including that prospective low-income college students and parents should consider return on investment as an “ingredient” in their college search, and high schools should provide robust advising to guide them in that process.

Colleges located in the same city, offering the same fields of study, can yield “quite different” returns, he said.

Van Der Werf also believes every college should be required to enroll a student body of at least 20 percent Pell Grant recipients.

“It only makes sense that every college should be educating more low-income students,” he said. “It would bring greater social mobility across the United States. And there frankly are enough qualified Pell Grant recipients to fill all those seats.” Higher ed leaders “just aren’t trying hard enough. They’re not admitting enough of them.”

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