Subscribe: RSS Feed | Twitter | Facebook | Email
Home | Contact Us

Colleges/Universities Leave Lower Income Students Behind

Posted by Larry Doyle on May 8, 2013 9:50 AM |

The business of higher education is changing rapidly.

With family incomes stagnant, job prospects for graduates challenging, and pressure on the bottom line — for families and schools alike — increasing like never before, those within the executive offices of our nation’s ivory towers are scrambling.

What is one area that is getting a lot of focus? The manner in which schools dispense financial aid, which for more and more families is becoming THE key variable in determining where little Susie or Joey might go to school. In a report that is troubling to those who know that higher education is THE only real path for those in the lower income strata of our nation to advance, the New America Foundation writes this morning:

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.

What are more and more schools doing with their increasingly precious financial aid dollars? Providing marginal discounts to students and families who can otherwise pay the entire freight. That is, they are trying to “buy students” in an attempt to: 1) support their bottom line, and 2) attract  stronger students who might otherwise not attend.

What is the message to lower income students and especially those who are qualified and capable of doing the work at many of these schools?

In its latest survey of college admissions directors, Inside Higher Ed found that more than one-third of public colleges and nearly two thirds of private colleges engage in “gapping” — providing lower-income students with aid packages that don’t come close to meeting their financial need. In the parlance of enrollment management, this is often called “admit-deny,” in which schools deliberately underfund financially needy students in order to discourage them from enrolling.

Selected schools with meaningful endowments such as Amherst College have been able to buck this trend by really working at it. Other schools with enormous endowments such as Harvard seem to be less motivated to truly address this issue.

While I am not surprised by the reality of this situation, the simple fact is it is troubling as this situation will certainly lead to an even greater disparity in opportunities and incomes in America for future generations.

Would love to hear what people from all ends of the spectrum and especially those facing this issue  have to say.

Larry Doyle

Isn’t  it time or overtime to subscribe to all my work via e-mail, an RSS feed, on Twitter or Facebook.

I have no business interest with any entity referenced in this commentary. The opinions expressed are my own. I am a proponent of real transparency within our markets so that investor confidence and investor protection can be achieved.

Recent Posts