Research

Higher Ed 'Opportunity Gap' Continuing to Widen

• By Dian Schaffhauser
• 07/10/19

A new joint report by the Pell Institute and Penn AHEAD shows that the "opportunity gap" in U.S. higher education is increasing. According to "Indicators of Higher Education Equity in the United States: 2019 Historical Trend Report," even as more students arrive on campus, inequality based on wealth and race has continued to grow. Both the Institute and AHEAD (Alliance for Higher Education and Democracy) produce and disseminate research and policy analysis "to promote a more open, equitable and democratic system of higher education."

This isn't the first time the Pell Institute has taken up the topic of opportunity in higher ed. This is the fifth such report in the series, which initially launched in 2004 and 2005 and more lately appeared in 2015.

The report used six "equity indicators," developed from multiple sources of data, to develop its findings:

• Who enrolls in postsecondary education, with drilldowns on family income, socioeconomic status, race and ethnicity and parent education;
• What type of college or university students attend, with details on family income, institutional level and school selectivity;
• How financial aid eliminates the financial barrier to paying college costs, focusing on trends in cost of attendance, Pell Grant size relative to college costs and unmet need by family income;
• How U.S. students pay for college, including the percentage of family income needed to cover the costs, the share of students who borrow, how much they borrow and the level of state need-based aid;
• How educational attainment rates and early outcomes vary by family characteristics, such as bachelor degree attainment by family income and race and ethnicity; and
• How educational attainment in the United States compares to other countries.

Among the findings of the 180-page report:

• College attainment varied dramatically among states. Bachelor's attainment in 2015 for 25- to 34-year-olds ranged from 22 percent in the lowest attainment states (Nevada and New Mexico) to more than twice that — 51 percent — in Massachusetts. (The relative positions of those specific laggards and leaders haven't changed since 2005.)
• Parents and students were responsible for 48 percent of higher education expenditures in 2017, up from around 33 percent from 1975 to 1981, and down from the early 1950s when it was 53 percent. State and local sources accounted for just 42 percent of higher education expenditures in 2017, down from 58 percent in 1975.
• The estimated bachelor's degree attainment rates by age 24 were nearly five times higher in 2017 for dependent family members in the highest income quartile than for those in the lowest income quartile (62 percent versus 13 percent).
• Although overall enrollment has increased, the representation of students from low-income families at the most selective institutions is low and basically unchanged from 20 years ago.
• Among ninth graders in 2009 who graduated from high school in 2013, those in the highest socioeconomic quintile were eight times more likely to attend a most or highly selective college as students from the lowest quintile (33 percent versus 4 percent).
• Overall, about four in 10 students (42 percent) have some amount of Pell or other federal grants. At the most selective schools, the rate is about 16 percent. And about two-thirds (68 percent) of students at for-profit institutions have Pell or other federal grants.
• In 1976, Pell Grants covered two-thirds (67 percent) of average college costs. By 2016, the maximum Pell covered 25 percent of average costs.
• In 2016, the average net price of college (after grants and discounts) was 94 percent of the average family income for dependent students in the lowest income quartile, compared to 45 percent in 1990. The net price of college made up just 14 percent of family income for those in the highest income quartile for 2016 — only slightly higher than the 10 percent it made up in 1990.
• Students who are both low-income and first-generation who enter college have a 21 percent chance of earning a bachelor's degree in six years, compared to their peers who are not low-income or first generation and have a 57 percent chance. For four-year institutions, the graduation rate for low-income, first-generation students was 41 percent (compared to 73 percent for their peers without those barriers); and for two-year institutions, the rate of success was 11 percent, compared to 22 percent.
• More students have been borrowing more since 1990. In the 1990s, just over half (51 percent) of bachelor's degree recipients borrowed; and by 2016 seven in 10 (69 percent) borrowed. The average amount of student loan debt for graduating seniors has risen to $30,000. And private, for-profit schools have seen the biggest jump in borrowing, from 77 percent in 2000 to 87 percent in 2016.
• Black bachelor's degree recipients have the highest borrowing rates (85 percent) and the highest average amount borrowed ($34,000). These shifts happened at a time when 37 percent of Black families and 33 percent of Hispanic families had negative wealth (owing more than they owned), compared with 16 percent of white families.
• In terms of international representation, the United States came in 18th for the percentage of adults aged 25 to 34 with a bachelor's degree or higher, and 13th among countries for the share of adults with either a bachelor's degree or a shorter credential.

"For many college students the decline in Pell grants relative to college costs and growing family income inequality in the United States means a rise in food, housing, transportation, and basic needs insecurity and the need to assume large debt and to work long hours," said Margaret Cahalan, report co-author and director of The Pell Institute, in a statement. "Too many work hours and basic needs insecurity creates unsurmountable obstacles for many students and negative impacts on the realistic opportunity these students have to succeed in college."

"Higher education is associated with countless benefits for individual participants, and for our communities, states and nation," added Laura Perna, report co-author and director of Penn AHEAD. "But, the rising costs of attending, and the failure of student aid to meet students' financial need, limit the possibility of realizing these benefits, especially for students from low-income families." Her conclusion: There's a need for "new approaches" to ensure that every student "has the opportunity to gain access to and benefit from higher education, regardless of their personal financial resources, and to ensure that students' post-college life options are not limited by the amount of their student loan debt."

The report and data are openly available on the Pell Institute website.