Measures of College Value Should Take Race Into Account, New Brief Argues

By Maria Carrasco, NASFAA Staff Reporter

A new analysis out of The Institute for College Access & Success (TICAS) examines a different way to measure the value of a college education, centering the metric on race. 

The analysis introduces the Race and Economic Mobility (REM) metric, which measures several economic indicators based on the distribution of racially marginalized students. The REM metric is calculated by examining median family income, median earnings, and percentage of debt owed for students of color, Black students, and Latinx students. 

Those indicators were then compared to the distribution of racially marginalized students at institutions. TICAS notes the REM metric results were similar for Black students and the students of color group, but the data revealed more complex findings for institutions’ composition of Latinx students.

That’s compared to the traditional Economic Mobility Index (EMI), which assesses the amount of time it would take to recoup costs for students from low-income backgrounds. EMI is calculated as the total net cost of attendance for low-income students plus the annual earnings (minus the typical earnings of high school graduates). That number is then multiplied by the percentage of students receiving Pell Grants. 

In the analysis, TICAS states that the benefits of getting a degree or credential are significantly shaped by students’ racial and economic backgrounds and the colleges they attend. TICAS argues that economic indicators, like earnings and debt alone, are incomplete measures of college value for people of color. And while the Pell Grant is “a reasonable proxy for determining family wealth,” TICAS notes that it doesn’t capture economic disparities by race or capture all students from low-income backgrounds, such as students who don’t complete the FAFSA. 

“In recent years, growing attention has focused on assessing the value of a college education,” TICAS states in the analysis. “Current approaches like measuring debt relative to earnings or assessing the earnings premium potential of a postsecondary degree are useful in determining whether individual institutions and academic programs are economically benefiting college graduates. But these approaches have one major limitation: they fail to explicitly center race.”

Using the REM metric, TICAS found that at institutions with the greatest composition of Pell Grant students, students earn $28,959 on average, which is nearly double their family income of $15,864, a decade after entering college. At institutions serving the largest distribution of students of color, students’ typical earnings, $33,120, almost double their family income of $17,981 one decade after starting college. 

However, at institutions serving the largest distribution of students of color, students’ economic mobility is lessened because of disproportionate earnings and debt levels, TICAS notes. Students of color owe roughly the same — 98% — of what they initially borrowed 10 years after entering repayment. Those students also earn nearly $8,000 less than their peers who attended institutions with the smallest composition of students of color.

And students owe 102% more of their original loan amounts and earn half as much as their peers who attended institutions with the smallest share of Pell Grant students. TICAS notes institutions serving the highest distribution of Pell Grant recipients don’t always serve the largest share of students of color. Students of color make up 3% of the student body at institutions with the largest share of Pell recipients. That’s compared to institutions with the smallest share of Pell recipients, where students of color make up 13% of the student body. 

TICAS states that while there are positive returns to a college education, the returns are not equitably felt across all racial groups. As a result of this analysis, TICAS is calling for more robust data collection and analysis, especially at the federal level. With better data collection, states and institutions can better identify potential equity gaps in student outcomes and institutional funding, the organization argues.

“As the perceptions of college value expand, one thing is clear: racializing economic mobility is necessary to analyze the benefits of a postsecondary credential,” TICAS states. “It is only in doing this work to understand how student experiences vary that policymakers will be able to address problematic enrollment trends and perceptions of higher education that vary with race. Simultaneously, federal and state-level policymakers must prioritize the value of college by equitably investing in students of color and funding institutions serving the largest shares of racially marginalized students.”


Publication Date: 1/24/2023

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