Promoting Racial Equity Through Federal-State College Affordability Partnerships

Concerns over college affordability have mounted in recent decades with generally declining levels of state support for public colleges, rising tuition levels (partly in response to declining state support), and federal and state financial aid investments that are insufficient to offset rising tuition. These trends are particularly concerning as our society grows more diverse and multicultural. While greater shares of Black and Latino students are going to college — 36% of Black and 39% of Latino young adults were enrolled in college in 2016 prior to the pandemic, when enrollment rates fell — the U.S. is still grappling with racism and its fallout for students of color. Black students are less able to afford college and more likely to be burdened by student debt than their White peers, thanks to racial housing discrimination and the racial wealth gap in the U.S.; Black borrowers, who earn less after college because of racial discrimination in the labor market, also have a harder time repaying student loans and are more likely to default than their White peers.

Other students of color have similar concerns about college affordability. It’s no surprise then that, even as college attendance and graduation rates rise across student groups, higher education is becoming increasingly stratified along racial lines.

Last summer, the U.S. Supreme Court issued two rulings that effectively banned race-conscious admissions at selective colleges. Decisions in the Students for Fair Admissions (SFFA) v. Harvard University and SFFA v. University of North Carolina at Chapel Hill cases overturned multiple prior Supreme Court rulings that had upheld the consideration of race as one factor in college admissions. In doing so, the Supreme Court dismantled a key tool to promote racial equity in access to selective colleges and universities. Banning race-conscious admissions has material consequences for Black students — not least of which is less access to selective colleges and graduate and professional programs. Prior research shows that state bans on affirmative action in college admissions led to decreases in enrollment among students of color at selective undergraduate colleges and in graduate and professional education.

The end of race-conscious admissions means that colleges may turn to race-neutral alternatives, which, at best, do little to promote racial equity, and, at worst, can perpetuate racial discrimination and White privilege. For instance, test-optional policies, which make submitting SAT and ACT scores optional for college applicants, have been adopted by many colleges looking to expand diversity, but these policies have thus far had little or no impact on enrollment among racially minoritized students. Studies about the feasibility of admissions lotteries, another approach that has been heralded as a way to promote equity, suggest that they are unlikely to increase racial diversity in college admissions. Meanwhile, holistic admissions considerations — such as the consideration of extracurricular involvement, essays, interviews, recommendations, and academic rigor alongside academic factors — occur in ways that tend to favor White and wealthier students, absent appropriate contextualization of applicants’ accomplishments.

Absent race-conscious admissions, we can expect an already racially stratified higher education system to become even more stratified, with racially minoritized students having less access to the most selective colleges and graduate and professional education. Couple this with college affordability concerns, and the future looks bleak for racial equity in higher education: Students of color face an admissions process and tuition prices that are designed to exclude them and favor well-off White students. In addition, colleges and state higher education systems may interpret the rulings more broadly and create a chilling effect that exacerbates the college affordability and access challenges facing racially minoritized students. We have already seen this happen in Missouri — where the University of Missouri System caved to the state attorney general’s request to discontinue the consideration of race in scholarship awards.

Given the racial disparities in college access and affordability and likely chilling effect on college diversity efforts as colleges and states overreact to the recent Supreme Court rulings, it is more crucial than ever to make college more affordable. Federal policymakers and advocacy groups in recent years have reconsidered the role of the government in public higher education, which has largely been left to the states. The Institute for College Access and Success, for example, suggests that federal-state partnerships might be established to support students and colleges. Such partnerships could offer structural changes to higher education to promote racial equity by (1) addressing college affordability concerns, and (2) being accessible to students.

Promising Features of Federal-State Partnerships

Here are some potential benefits of federal-state partnerships that are designed to promote racial equity through college affordability.

• They would provide adequate and equitable state funding to public colleges. State funding for public colleges has been associated with lower tuition levels and increased enrollment and completion. But states vary in their commitment to funding public colleges, and state support per student has generally declined. At the same time, colleges that disproportionately educate Black students, such as community colleges and minority-serving institutions, often receive less state funding per student and are more reliant on state funding for revenue, which makes them particularly vulnerable to declining state commitments. States and the federal government should work together to identify metrics for evaluating whether public colleges are adequately and equitably funded within states and remediate inequities.
• They would cover the full cost of attendance. In recent years, many states have enacted free college programs aimed at addressing college affordability, but most of these aid programs only cover tuition, which represents just a portion of the full cost of attendance. Aid programs that only cover tuition leave students and/or their families to pay for housing, food, transportation, child-care and other expenses, which account for 80% of the cost of going to college.
• They would provide first-dollar aid. Most statewide free college programs provide last-dollar aid to students, which covers any remaining tuition and fees that are not paid for by other grants or financial aid. As a result, last-dollar programs tend to award less money to lower-income students, whose tuition and fees are often covered by federal Pell Grants and other aid. In contrast, first-dollar aid can be applied toward tuition and other costs of attendance and is, therefore, more likely to help lower-income students.
• They would reduce the administrative burdens associated with accessing aid. The process of applying for federal and state financial aid puts a heavy administrative burden on many students — particularly first-generation students, students of color, and low-income students, who may miss out on aid because they lack the necessary family or institutional support to successfully complete the FAFSA (which is required for federal aid and for many state aid programs), learn about filing deadlines and eligibility requirements (e.g., full-time, continuous enrollment) for accessing and maintaining aid, and navigate the verification process. What’s more, some state aid programs have additional eligibility and application requirements beyond the FAFSA, such as requiring full-time enrollment, including community service hours, and/or restricting eligibility to students meeting certain GPA or test score thresholds. To reduce complexity and ensure that students can access aid for which they are eligible, policymakers should carefully weigh the benefits of application components or eligibility requirements against the costs they impose on intended recipients. Despite the new FAFSA, which was recently released by the Department of Education to simplify and streamline the process of applying for federal aid, state financial aid continues to present numerous additional barriers to students.

Conclusion

In the wake of Supreme Court rulings that limit race-conscious admissions in higher education, it is more crucial than ever for state and federal policymakers to work together to promote racial equity through college affordability. This entails providing adequate and equitable levels of funding for public colleges — especially community colleges and minority-serving institutions that disproportionately enroll racially minoritized students — and designing financial aid programs that cover actual college costs and are accessible for eligible students, so these students can access and obtain a higher education, which is necessary to succeed in today’s job market and economy.