Undermining Pell: Volume IV. How the Privatization of Public Higher Education Is Hurting Low-Income Students
Author: Burd, Stephen
Date: 2018-10-00
Type: Reports - Research
Subjects: Privatization,Public Colleges,Student Costs,Low Income Students,Federal Aid,Grants,Access to Education,Undergraduate Students,In State Students,College Freshmen,Educational Trends

This report follows up on three previous papers published by New America that have examined the net price data for the 2010-2011, 2011-2012, and 2013-2014 academic years. In each of these publications, the share of public institutions charging low-income students an average net price over $10,000 has grown. Previous volumes of this report examined average net price data at both public and private nonprofit four-year colleges. This report, however, focuses exclusively on public institutions. Since the 2011-12 report, the share of private colleges charging freshmen with family incomes of $30,000 or less an average net price over $10,000 has remained strikingly high to the detriment of low-income students at around 94 to 95 percent. While there is some variation in terms of which private colleges are charging freshmen the highest and lowest average net prices, the overall results have been consistent. Overall, the vast majority of private colleges, which have provided affluent students with hefty amounts of non-need-based aid for decades, are leaving low-income students with extremely high amounts of unmet need, requiring them either to borrow high-interest private loans or have their parents take on large federal Parent PLUS loans to attend them. The exception to this rule are some of the country's most elite private liberal arts colleges and universities, like Harvard and Amherst, which are rich enough to fill the full financial need of the high-achieving, low-income students they enroll. The finding that public four-year schools are generally becoming less affordable for low-income students is consistent with a separate analysis conducted last year in which it was found that the majority of these institutions have also become less accessible. Most notably, at more than half of public institutions (54 percent), the increase in affluent students came at the direct expense of low-income ones. In other words, these schools increased the share of students in the top 20 percent at the same time that they reduced the share from the bottom 40 percent. The public higher education system is increasingly becoming less accessible and affordable for low-income students flies in the face of national goals to increase access to higher education and help more students earn high-quality degrees. Fifty years ago, the federal government committed itself to removing the financial barriers that prevent low-income students from enrolling in and completing college. Policymakers have sought to achieve this goal primarily through the Pell Grant program, which spent about $27 billion in the 2016-17 academic year to help more than 7 million financially needy students pay for college. The doors of too many public universities and state colleges are closing to low income and working class students. This report argues that it is time for federal and state policymakers to take notice of the merit-aid arms race, which has done great harm to the aspirations of low-income and working class students, and work together to reverse these troubling trends before it is too late. For the good of the country, everything possible must be done to ensure that colleges live up to their commitments to serve as engines of opportunity, rather than as perpetuators of inequality.