The Poor and the Rich : A Look at Economic Stratification and Academic Performance Among Undergraduate Students in the United States October 2008

A number of national studies point to a trend in which highly selective and elite private and public universities are becoming less accessible to lower-income students. At the same time there have been surprisingly few studies of the actual characteristics and academic experiences of low-income students or comparisons of their undergraduate experience with those of more wealthy students. This paper explores the divide between poor and rich students, first comparing a group of selective US institutions and their number and percentage of Pell Grant recipients and then, using institutional data and results from the University of California Undergraduate Experience Survey (UCUES), presenting an analysis of the high percentage of low-income undergraduate students within the University of California system — who they are, their academic performance and quality of their undergraduate experience. Among our conclusions: The University of California has a strikingly higher number of lowincome students when compared to a sample group of twenty-four other selective public and private universities and colleges, including the Ivy Leagues and a sub-group of other California institutions such as Stanford and the University of Southern California. Indeed, the UC campuses of Berkeley, Davis, and UCLA each have more Pell Grant students than all of the eight Ivy League institutions combined. However, one out of three Pell Grant recipients at UC have at least one parent with a four-year college degree, calling into question the assumption that “low-income” and “first-generation” are interchangeable groups of students. Low-income students, and in particular Pell Grant recipients, at UC have only slightly lower GPAs than their more wealthy counterparts in both math, science and engineering, and in humanities and social science fields. Contrary to some previous research, we find that low-income students have generally the same academic and social satisfaction levels; and are similar in their sense of belonging within their campus communities. However, there are some intriguing results across UC campuses, with low-income students somewhat less satisfied at those campuses where there are more affluent student bodies and where lower-income students have a smaller presence. An imbalance between rich and poor is the oldest and most fatal ailment of all republics — Plutarch There has been a growing and renewed concern among scholars of higher education and policymakers about increasing socioeconomic disparities in American society. Not surprisingly, these disparities are increasingly reflected * The SERU Project is a collaborative study based at the Center for Studies in Higher Education at UC Berkeley and focused on developing new types of data and innovative policy relevant scholarly analyses on the academic and civic experience of students at major research universities. For further information on the project, see http://cshe.berkeley.edu/research/seru/ ** John Aubrey Douglass is Senior Research Fellow – Public Policy and Higher Education at the Center for Studies in Higher Education at UC Berkeley and coPI of the SERU Project; Gregg Thomson is Director of the Office of Student Research at UC Berkeley and a co-PI of the SERU Project. We would like to thank David Radwin at OSR and a SERU Project Research Associate for his collaboration with data analysis. Douglass and Thomson: Poor and Rich 2 CSHE Research & Occasional Paper Series in the enrollment of students in the nation’s cadre of highly selective, elite private universities, and increasingly among public universities. Particularly over the past three decades, “brand name” prestige private universities and colleges have moved to a high tuition fee and high financial aid model, with the concept that a significant portion of generated tuition revenue can be redirected toward financial aid for either low-income or merit-based scholarships. With rising costs, declining subsidization by state governments, and the shift of federal financial aid toward loans versus grants in aid, public universities are moving a low fee model toward what is best called a moderate fee and high financial aid model – a model that is essentially evolving. There is increasing evidence, however, that neither the private nor the evolving public tuition and financial aid model is working. Students from wealthy families congregate at the most prestigious private and public institutions, with significant variance depending on the state and region of the nation, reflecting the quality and composition of state systems of higher education. A 2004 study by Sandy Astin and Leticia Oseguera looked at a number of selective private and public universities and concluded that the number and percentage of low-income and middle-income families had declined while the number from wealthy families increased. “American higher education, in other words, is more socioeconomically stratified today than at any other time during the past three decades,” they note. One reason, they speculated, may be “the increasing competitiveness among prospective college students for admission to the country’s most selective colleges and universities” (Astin and Oseguera 2004). A more recent study by Danette Gerald and Kati Haycock (2006) looked at the socioeconomic status (SES) of undergraduate students at a selective group of fifty “premier” public universities and had a similar conclusion – but one more alarming because of the important historical mission of public universities to provide broad access, a formal mandate or social contract. Though more open to students from low-income families than their private counterparts, the premier publics had declined in the percentage of students with federally funded Pell Grants (federal grants to students generally with family incomes below $40,000 annually) when compared to other four-year public institutions in the nation. Ranging from $431 to a maximum of $4,731, Pell Grants, and the criteria for selection of recipients, has long served as a benchmark on SES access. Pell Grant students have, on average, a family income of only $19,300. On average, note Gerald and Haycock, the selected premier publics have some 22% of their enrolled undergraduates with Pell Grants; all public four-year institutions have some 31% with Pell Grants; private institutions have an average of around 14% (Gerald and Haycock 2006). But it is important to note that there are a great many dimensions in understanding equity and access among private and public higher education institutions (HEIs). For one, there is a need to disaggregate types of institutions, for example, private versus public, university versus community college. Public and private institutions, and particularly highly selective universities and colleges, tend to draw from different demographic pools, with public universities largely linked to the socioeconomic stratification of their home state. Second, there are the factors related to rising tuition and increasingly complicated and, one might argue, inadequate approaches to financial aid in the U.S. With the slow down in the US economy, the US Department of Education recently estimated that demand for Pell Grants was exceeded projected demand by some 800,000 students; total applications for the grant program are up 16 percent over the previous year. This will require an additional $6 billion to the Pell Grant’s current budget of $14 billion next year.1 Economic downturns tend to push demand up for access to higher education among the middle and lower class, although most profoundly at the community college level. This phenomenon plus continued growth in the nation’s population, and in particularly in states such as California, Texas and Florida, means an inadequate financial aid system, where the maximum Pell Grant award has remained largely the same for the last decade when adjusted for inflation, will be further eroded. But in light of the uncertainty in the economy and the lack of resolve at the federal level to support higher education, it is not clear the US government will fund the increased demand – it may cut the maximum award. And third, there are larger social trends, such as increased disparities in income and the erosion of public services, declines in the quality of many public schools, the stagnation and real declines for some socioeconomic groups in high school graduation rates; and the large increase in the number of part-time students, most of whom must work to stay financially solvent. Douglass and Thomson: Poor and Rich 3 CSHE Research & Occasional Paper Series This paper examines low-income, and upper income, student access to the University of California and how lowincome access compares with a group of elite privates (specifically Ivy League institutions) and selective publics. Using data from the University of California’s Undergraduate Experience Survey (UCUES) and institutional data, we discuss what makes UC similar and different in the SES and demographic mix of students. Because the maximum Pell Grant is under $5,000, the cost of tuition alone is higher in the publics, and much higher in our group of selective privates, the percentage and number of Pell Grant students at an institution provides evidence of its resolve, creativity, and financial commitment to admit and enroll working and middle-class students. We then analyze the undergraduate experience of our designation of poor students (defined for this analysis as Pell Grant recipients) and rich students (from high-income families, defined as those with household incomes above $125,000 and no need-based aid).2 While including other income groups, we use these contrasting categories of wealth to observe differences in the background of students, their choice of major, general levels of satisfaction, academic performance, and sense of belonging at the university. There is very little analytical work on the characteristics and percepti