Report Underscores Continuing Inequality in Higher Education
Quick Takeaways
- The Pell Institute reports that 54 percent of dependent primary family members who reported attaining a bachelor's degree by age 24 in 2014 were in the top family-income quartile, compared with only 10 percent of those in the bottom quartile.
- The report also found "extreme differences in the ratio of family income … to average college costs," with an average one-year cost of attendance (COA) for dependent student with family incomes of less than $10,000 that is 238 percent of family income.
- While Pell Grant recipients often attend less-expensive institutions, the report found that they "borrow somewhat higher amounts, on average," than those who do not receive the grants, averaging $31,007 in loans at graduation in 2012.
By Brittany Hackett, Communications Staff
Higher education opportunity and outcomes continue to have high rates of inequality across family income groups, with gaps that are currently larger than in the past, according to a new report from The Pell Institute for the Study of Opportunity in Higher Education.
The group's 2016 Indicators Report tracked six equity indicators focused on postsecondary enrollment, including who is attending college and how they are paying for it. According to the report, 54 percent of dependent primary family members who reported attaining a bachelor's degree by age 24 in 2014 were in the top family-income quartile, compared with only 10 percent of those in the bottom quartile. In addition, 80 percent of 18- to 24-year-olds from the highest family-income quartile were enrolled in higher education in 2014, compared with only 45 percent of those form the lowest quartile, which "indicat[es] a very high level of inequality," the report said.
The report examined the type of postsecondary institutions attended by students and found that 56 percent of first-time, full-time undergraduates who received the Pell Grant or other federal grants in 2013 attended a four-year institution rather than a two-year institution, while 75 percent of undergraduates who did not receive federal grants attended a four-year school instead of a two-year school.
When looking at the financial barriers to higher education, the report found that the average costs for public, four-year institutions has increased 2.4 times in constant dollars since 1974-75. The average cost for two-year colleges has also increased, rising 1.5 times in constant dollars since 1974-75. At the same time, the percent of average college costs covered by the maximum Pell Grant has dropped from 67 percent in 1975-76 to 27 percent in 2013.
The report also found "extreme differences in the ratio of family income … to average college costs." The average one-year cost of attendance (COA) for dependent students with family incomes of less than $10,000 was 238 percent of family income and 74 percent for students in the $30,000 to $40,000 family income bracket. In comparison, the COA was only 18 percent of family income for students with family incomes of $200,000 and 42 percent among students in the median income category of $60,000 to $70,000.
Regarding unmet need, the report found that the average unmet need was more than double in 2012 than in 1990 — $8,221 and $3,495, respectively — for full-time undergraduate students in the lowest family income quartiles. The average amount of unmet need in 2012 for students in the second lowest income quartile was $6,514, while students in the third quartile averaged $1,047 in unmet need. Meanwhile, students in the higher income quartile averaged a surplus of $13,950 after grants and the expected family contribution were deducted from the COA.
Given the trends outlined above, as well as reductions in funding from states, it is not surprising, the authors said, that the cost of college is being borne by students and families at higher rates than ever before; with borrowing being the primary way students are paying for college. The percent of the total costs of college borne by students in families rose to 51 percent in 2014, up from 33 percent in 1988, and in 2012 71 percent of bachelor's degree graduates had borrowed an average of $29,400. The borrowing rates were the highest among seniors who attended four-year for-profit institutions (88 percent) and private four-year non-profit institutions (75 percent), compared with seniors from public four-year institutions (66 percent).
The study also found that the share of bachelor's degree graduates who borrowed rose from 68 percent in 2007-08 to 71 percent in 2011-12, with average amounts of $27,170 and $29,400 in each respective year. While Pell Grant recipients often attend less-expensive institutions, the report found that they "borrow somewhat higher amounts, on average," than those who do not receive the grants, averaging $31,007 in loans at graduation in 2012. Non-Pell recipients averaged only $27,443 in the same year.
"Once known for wide accessibility to an excellence within its higher education system, the U.S. now has an educational system that sorts students in ways that have profound implications for later life chances," The Pell Institute writes in the report. "More work is required to achieve the vision of ensuring all Americans have the opportunity to use their creative potential to realize the many benefits of higher education and advance the well-being and progress of the nation."
Publication Date: 4/26/2016
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