Press Release

College costs are skyrocketing. Yet as the report shows, those rising costs, coupled with shifting aid policies — which increasingly benefit students who could go to college without financial help — limit affordable, high-quality college options for low-income students.

“Low-income students who have worked hard, played by the rules and done what’s been asked of them academically are not getting the support they need to pay for college,” said José Cruz, co-author of the report and vice president of higher education program and policy at The Education Trust. “While costs have soared over the last 30 years, grant aid for low-income students has not kept pace, forcing more and more of them to encumber themselves with life-altering debt.”

As it stands, these financial-aid policy choices increasingly benefit affluent students instead of those with the greatest demonstrated need. And the results speak for themselves: More than 80 percent of students from families in the highest income quartile have a bachelor’s degree by age 24, but the figure for young Americans from the lowest income quartile is just 8 percent. Without a concerted effort at the federal, state, and institutional levels to help more students earn a college degree, the affordability gap will continue to grow.

“Our findings suggest that both federal and state lawmakers as well as institutional leaders have been focusing too much on maintaining the status quo — or boosting their position in popular rankings —rather than improving college opportunity,” Cruz said. “To reverse that trend and to align our policies with our values, we must reevaluate financial-aid policies at all levels to ensure that precious financial-aid dollars are being used to increase opportunity, not to limit it.”

Access to Affordable, Quality College Education

The study draws on the most recent federal data, now available at College Results Online, a user-friendly, Web-based tool that provides data on student access and success rates at four-year institutions. Among its key findings: Just five American colleges and universities meet relatively conservative criteria on affordability, access and quality. They include the following:

  • Baruch College, City University of New York;
  • California State University, Fullerton;
  • California State University, Long Beach;
  • Queens College, City University of New York; and
  • University of North Carolina at Greensboro.

The net price for low-income students at these institutions is below $4,600 per year, which is the amount they would pay if they were expected to contribute the same proportion of their family earnings as did middle-income students. These colleges also serve a proportion of low-income students that at least matches the national average and provide students with at least a 1-in-2 chance of graduating within six years. A sixth institution — Berea College — was omitted from this analysis because of its unique pricing model. Berea makes it its mission to educate and graduate low-income students and therefore charges no tuition.

“These institutions deserve to be recognized for swimming against the tide and making the opportunity for a college education available to low-income students,” said Mamie Lynch, co-author of the report and higher education research and policy analyst at The Education Trust. “But we should be deeply worried that there are so few institutions doing this. The more general pattern is pricing low-income students out of higher education and all that it offers them, their communities and our entire country. It’s an unsustainable practice that can only lead to deeper and more dangerous divides between haves and have-nots.”

A variety of sectors in higher education are engaging in these practices that limit opportunity. Private nonprofits, public flagships and private for-profits are all tilting the tables against access for low-income students.

The study shows that the average private, nonprofit institution spends almost twice as much in grant money on high-income students as it does on low-income students. Even many well-resourced private colleges are educating far too few low-income students. At a number of those top-ranked institutions — such as Brigham Young University, Duke University, Tulane University and University of Notre Dame — fewer than 10 percent of freshmen receive Pell Grant aid, the federal program that helps low-income students afford college costs, whereas about 30 percent of freshmen nationwide benefit from Pell.

But private nonprofits are not alone in this failure. Since the early 1990s, public flagships founded to provide broad access to affordable, high-quality education in their states have increasingly closed their doors to low-income students. Even for those they do admit, many of these institutions are far too expensive.

“The flagships pride themselves on cultivating the next generation of business and civic leaders. That status demands a responsibility to target their resources in ways that ensure access for the broad range of students in their state,” said Kati Haycock, president of The Education Trust. “But too many are shirking that responsibility, choosing instead to give more of their precious financial-aid dollars to students who demonstrate little or no need. As a result, too many low-income students of promise are being systematically shut out of an affordable college education.”

Indeed, of the 50 public flagship universities in the United States, only five have a net price below $4,600 for their lowest income students. Some public flagships cost low-income students even more than do the top-ranked private institutions in the same states:

  • At Pennsylvania State University’s main campus, the net price for low-income students is $14,460 per year. However, attending the University of Pennsylvania costs low-income students $6,704.
  • At The University of Tennessee, the net price is $10,724 per year for low-income students. But at Vanderbilt University, low-income families can expect to pay just $3,099.

Despite the high cost of many private and public nonprofits, the most colossal net prices are found at four-year, for-profit college companies. As they reap billions in profits for their shareholders, many for-profits require low-income students to contribute an amount equivalent to more than 100 percent of their average household income, forcing these families to turn to high-cost loans. But since their students have less than a 1-in-4 chance of graduating within six years, the educational risk for-profit colleges present is high.

The Power of Pell

At the federal level, Pell Grants help make higher education more affordable for nearly 10 million low-income Americans. But as Congress works to reduce overall national spending, the program is in danger of being cut. The U.S. House of Representatives recently passed a huge cut to the maximum award that would have further increased the net price of colleges and universities, shattered the dreams of millions of students and imperiled our economy, our democracy, and our values.

Fortunately, that plan was defeated in the Senate. The Senate, however, has not yet unveiled its budget proposal. It could — like the House — dramatically slash the maximum award or it could keep the maximum award stable but alter eligibility criteria such that large numbers of Pell recipients find that they no longer qualify for the support.

“In America, access to a good education should not be determined by whether your family can afford to pay for it,” said Jennifer Engle, co-author of the report and director of higher education research and policy at The Education Trust. “Pell cuts would force many hard-working Americans to have to choose between encumbering themselves with crippling debt or turning away from higher education entirely. This program is not just a line item in the federal budget. It’s a key resource for low-income students that they simply can’t afford to lose.”