Undermining Pell

How Colleges Compete for Wealthy Students and Leave the Low-Income Behind
May 8, 2013 |
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Nearly fifty years ago, the federal government committed itself to removing the financial barriers that prevent low-income students from enrolling in and completing colleges. For years, colleges complemented the government's efforts by using their financial aid resources to open the doors to the neediest students. But those days appear to be in the past. With their relentless pursuit of prestige and revenue, the nation's public and private four-year colleges and universities are now in danger of shutting down what has long been a pathway to the middle class for low-income and working-class students.

Undermining Pell presents a new analysis of little-examined U.S. Department of Education data showing the "net price" -- the amount students pay after all grant aid has been exhausted -- for low-income students at thousands of individual colleges. The analysis shows that hundreds of public and private non-profit colleges expect the neediest students to pay an amount that is equal to or even more than their families' yearly earnings. As a result, these students are left with little choice but to take on heavy debt loads or engage in activities that reduce their likelihood of earning their degrees, such as working full-time while enrolled or dropping out until they can afford to return.

The analysis finds that the financial hurdles are highest in the private nonprofit college sector, where only a few dozen exclusive colleges meet the full financial need of the low-income students they enroll. Nearly two-thirds of the private institutions analyzed charge students from the lowest-income families, those making $30,000 or less annually, a net price of over $15,000 a year.

While the problem is not as extreme among public universities, it is rapidly getting worse. As more states cut funding for their higher education systems, public colleges are increasingly adopting the enrollment management tactics of their private college counterparts -- to the detriment of low-income and working-class students alike.

Overall, too many four-year colleges, both public and private, are failing to help the government achieve its college access mission. They are instead using their financial resources to fiercely compete for the students they most desire: the "best and brightest" students -- and the wealthiest.

The time has come for policymakers to take notice. Federal action is needed to ensure that colleges continue to provide a gateway to opportunity, rather than perpetuating inequality by limiting college access to only those who are rich enough to be able to afford it.

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Overall, too many four-year colleges, both public and private, are failing to help the government achieve its college access mission. They are instead using their financial resources to fiercely compete for the students they most desire: the "best and brightest" students -- and the wealthiest.

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