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Low-Income Students are Excluded by College Costs

Jun 07, 2011

By Hilary Hall

1,186. That’s how many four-year colleges and universities in the United States provided information on their “net prices” and enrollment numbers for the Education Trust’s recently released report Priced Out: How the Wrong Financial Aid Policies Hurt Low-Income Students. Five is how many of those 1,186 schools are affordable and accessible to low-income families and also boast high graduation rates.

Priced Out is an important research contribution at a time when more and more jobs require some postsecondary education. Individuals with some college or a four-year degree earn far more over their lifetime than those without. Further, those with more education are less likely to be unemployed. According to the latest Bureau of Labor Statistics unemployment data, high school graduates had a 9.5 percent unemployment rate compared to 4.5 percent for those with a bachelor’s degree.

Despite the importance of higher education for creating family economic security, the report makes plain that postsecondary education is too often out of reach for low-income students. Without critical education opportunities, a middle class lifestyle is less attainable for these individuals.

Priced Out uses data recently collected and made available by the U.S. Department of Education to identify three key indicators of an institution’s openness to low-income families: net price, a 50 percent graduation rate or higher, and Pell enrollment.

The report states that a low-income student should not be expected to pay more than $4,600 for college each year, which is 27 percent of the average yearly family income in the lowest income quintile. Only 65 colleges and universities have net prices of $4,600 or less, with most – 302 colleges and universities—demanding payments that are equivalent to between 72 and 100 percent of the average low-income family’s income.

Twenty-nine of the 65 schools with a $4,600 or less net price have graduation rates of at least 50 percent, cutting the number of colleges and universities that are fiscally viable for low-income families in half and suggesting that many of the schools that are less expensive for poorer students are also less committed to seeing them graduate.

Nationally, 30 percent of students receive Pell grants – nearly 9 million students. Yet Priced Out finds that of the 29 schools that do not expect low-income students to pay more than 27 percent of their families’ incomes and have at least a 50 percent graduation rate, only five have Pell enrollments of 30 percent or more. The names that many would expect to see in this group – such as universities with massive endowments or that are public – actually enroll far fewer low-income students than they could. In other words, the cost can potentially be low but this option is offered to few.

Priced Out should provide an incentive for colleges and universities across the country to rethink their enrollment numbers. The report should also demonstrate to policymakers how inaccessible higher education can be to low-income students, and how devastating cuts to Pell grants could be for these students. With unemployment now at 9.1 percent, postsecondary education is central to equipping more people with the tools needed to find work and create a competitive workforce. That means creating opportunities for all to access quality postsecondary options – especially  those that need the help most.

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