Journal Issue: Opportunity in America Volume 16 Number 2 Fall 2006
Steps in the College Process
Clearly, high-income youth are overrepresented in U.S. colleges. Why they are overrepresented, however, is not well understood. In this section we summarize what is known about how family background affects each of the steps in the process of applying to, securing admission to, and graduating from the nation's colleges and universities.
Preparing for College and Applying for Admission
Students must overcome several hurdles to succeed in postsecondary education, and the overall process is complex. First, students must be well-prepared in elementary and secondary school (see the article by Cecilia Elena Rouse and Lisa Barrow in this issue). High schools in poor and minority neighborhoods, however, tend to be of low quality and to lack the resources, both financial and human, to prepare students adequately for postsecondary schooling.41 Rigorous courses in all fields, but especially mathematics, are rare in these high schools, as are opportunities for honors course work or advanced placement—making it hard for students to build a proper academic foundation for college work. One study finds that only half of low-income high school graduates in 1992 who applied for admission to a four-year institution were “minimally qualified” to enroll, as against more than 80 percent of students from families with incomes of $75,000 or more.42 Some observers claim that the nation's secondary schools give students poor signals about the preparation needed to succeed in higher education because advocates and policymakers overemphasize “access” as opposed to “preparation.”43
Nor do poor-quality high schools support and teach the study and work habits necessary for postsecondary success. Although the reasons for poor student motivation are surely complex and lie in part with the families and neighborhoods in which children are raised, the discipline and standards set by the nation's poorest schools also contribute.
The poor quality of schools in low-income neighborhoods also affects how much students know about how to select colleges, apply for admission, and gain acceptance. A recent study highlights some of the difficulties these students encounter. Thomas Kane reports data from a Boston program showing that inner-city, primarily minority students, report plans to attend college similar to those of their suburban, primarily white, counterparts. But only a third of the inner-city students had taken the SAT exam by October of their senior year, as against 97 percent of the suburban students.44 Further, the low-income and minority students and their parents were ill-informed about the cost of attending college and were often put off by the high “sticker prices” emphasized by the media.45 They were also unfamiliar with the availability of needs-based financial aid.
Michael Timpane and Arthur Hauptman provide a comprehensive discussion of academic preparation and performance and offer suggestions for improving both. They recommend that colleges and universities help improve K–12 education (for example, through teacher preparation and partnerships with elementary and secondary schools). They also support moves to help students make the transition from high school to college (for example, through increasing high school graduation standards and providing support services and early interventions), strengthening remediation programs, and improving the performance of low-income students while in college.46
Finding and Getting Financial Aid
According to the College Board, financial aid for undergraduates and graduate students totaled more than $122 billion in 2003–04, an 11 percent increase from the previous year, over and above inflation. Federal guaranteed loans account for about half of that total. Other federal support made up another 20 percent, with Pell grants constituting about three-quarters of that. State and institutional support made up the remaining 30 percent. But though financial aid itself is rising, the share targeted on low-income students has been falling, as needs-based assistance has been increasingly replaced by merit-based aid.
According to most recent analyses, trends in family income, tuition, and financial aid policy have most adversely affected those students least able to afford postsecondary schooling. For example, college prices (in real terms, net of inflation) were nearly flat during the 1970s but increased rapidly during the 1980s and 1990s, when tuition rose two and even three times as fast as the price of other consumer goods.47 This trend, together with the growing inequality of family income, has raised the cost of attending college far more for students in low-income families than for those in well-to-do families. In the early 1970s, paying for a child to attend a public four-year college absorbed 42 percent of the income of a low-income family; by the 2000s, it took nearly 60 percent; for students from high-income families, the increase in income share was from 5 percent to 6 percent.48 Moreover, students from lower-income families are more sensitive to tuition increases than students from higher-income families.49
Although these cost increases have been partially offset by increased student financial aid, the evidence suggests that major disparities continue to exist. In 2001 the Advisory Committee on Student Financial Assistance reported that “unmet need” is substantially higher for low-income students than for others, whether they attend public or private, four-year or two-year, colleges.50 Several studies have tried to track the recent changes in the effective price of college attendance, taking account of changes in both financial aid and tuition. Amy Schwartz has summarized her own estimates as follows:
Evidence shows that sticker prices are rising, but increases in financial aid have been significantly offsetting. For two-year colleges, most of which are public institutions, the trend in net prices has been downward and current net prices are, on average, negative. Among four-year colleges, the net price of public colleges declined in the last decade with some modest increases in the last few years offsetting a larger decrease in the 1990s. The trend for four-year private colleges, however, has been unambiguously positive—net prices are significantly higher than a decade ago.51
Moreover, financial aid has increasingly come in the form of loans, rather than grants.52 During the early 1980s, for example, grants made up 55 percent of student aid; by 2001, that figure was down to 41 percent. By 2001, loans to students and parents by the federal government totaled nearly $40 billion, more than five times the resources of the Pell grant program that was meant to be the primary source of assistance to lowincome students. Although the maximum Pell grant covered about 60 percent of the cost of attending a four-year public institution in the early 1980s, it covered only about 40 percent by 2001.53
Michael McPherson and Morton Schapiro have concluded that colleges and universities are increasingly abandoning ability-to-pay principles and using student financial aid both to maximize net tuition revenue and to meet their goals for student quality. Merit scholarships and other forms of non-needs-based assistance have grown over time, resulting in more aid to affluent students.54
In more recent work, McPherson and Schapiro track changes in merit and needs-based financial aid and find that at all institutions, low-income students receive more grant aid than high-income students, across the range of SAT scores. But at private colleges and universities, the gap in aid between low- and high-income students increased as aid for low-income students fell, relative to that afforded high-income students. Over the 1990s, among students with the highest SAT scores, low-income students received 4.9 times as much aid during 1992–93, but only 2.8 times as much during 1999–2000. The authors suggest that this movement of grant dollars toward higher-income families reflects not a greater “demand” for students with high SAT scores, but rather an excess supply of places at selective private colleges, leading to a bidding down of the price through greater tuition discounts.55
At public colleges and universities, on the other hand, student aid awards rose more rapidly with need, and the “net price” facing low-income students declined during the 1990s. But state budget difficulties since 2000 suggest this trend may be ending. Moreover, more complicated rules about how much interest lenders can charge on student loans have led to new legislation reducing subsidies to lenders, negatively affecting the cost and targeting of federally subsidized student loan programs.56
One important issue is the extent to which the increase in merit-based assistance has increased the overall level of college attendance and completion. Susan Dynarski concludes that programs providing a substantial increase in merit-based student aid (thought of as tuition reduction) have increased both college attendance and students' persistence in working toward a degree, especially among women, and in particular, nonwhite women.57 Her evidence, however, does not effectively account for the possibility that colleges and universities may have offset external increases in student aid by increasing tuition.58
Community colleges and associate's degree programs play an important but as yet poorly understood role in postsecondary education.59 Indeed, Dan Goldhaber and Gretchen Kiefer show that although about 40 percent of all postsecondary students attend four-year public universities, lower-income children are twice as likely to attend public two-year (community college or associate's degree) programs than are higher-income children, almost exactly in reverse proportion to the share of higher-income children who attend private, four-year colleges (see figure 2).60
Community colleges serve several important functions in postsecondary education. First, they provide the key access point to higher education for nonwhite and Latino students. 61 For instance, almost 60 percent of all Latinos enrolled in higher education enroll first in community colleges.62 These students are highly tuition-price sensitive and often choose part-time instead of full-time enrollment.63 Still, a full 30 percent of all community college enrollees want to go on to complete a four-year degree. Indeed, community colleges provide remedial education for students who are not yet qualified for four-year colleges and universities, though researchers know surprisingly little about this community college function. An estimated 55 percent of all community college students take courses in remedial mathematics or English.64
Community colleges also offer technical and occupational training and certificates of competency in some fields, both of which increase the earnings of recipients beyond those of high school graduates.65
Still, the primary social mobility role of community colleges lies in their ability to raise college completion rates among low-income children. Indeed, many community colleges are linked to four-year institutions, providing a bridge to a four-year baccalaureate degree, though there is little systematic evidence of such arrangements. Jane Wellman suggests that transfer policies from two- to four-year state colleges, the primary road from community colleges to public institutions granting higher degrees, are not always well articulated by states and that the effectiveness of state policies varies widely.68 Further development of the National Student Clearinghouse (NSC) database would greatly enhance our ability to gather a more complete picture of this process.69 According to NSC data, perhaps 30 to 35 percent of community college students transfer to four-year colleges.70 But Goldhaber and Kiefer suggest that increasing these transfer rates will make capacity in receiving institutions a major policy issue.71
In summary, because community colleges are often the initial access point to higher education for disadvantaged students, understanding their role in providing bridges to schools of higher education is essential.
Remediation and Persistence
Being admitted to college does not assure graduation. Indeed Vincent Tinto has noted that “access without support does not ensure equality of opportunity.”72 Low-income students are more likely to be not only academically unprepared, but also psychologically and culturally unprepared, for college. As table 3 shows, although 22 percent of youth from the lowest income quartile attend college, only 6 percent graduate. In contrast, half of all students from the highest income quartile who attend college manage to graduate within six years of matriculation. Poorly prepared students tend to be from lower-income backgrounds and are more likely to require remedial courses, additional counseling, and other services, and are therefore less likely to get a degree.73 For example, in the California State University system, the remediation rate among freshmen is 60 percent, and only 39 percent of remedial students graduate. The problem is similar at community colleges, where 72 percent of students begin expecting to earn a degree and only 23 percent finish.74
Nevertheless, remediation efforts appear to be effective. Eric Bettinger and Bridget Long use data from Ohio to assess the effects of remedial programs on students' ultimate success in college. They show that remediation improves educational performance—students who enroll in both math and reading remediation courses are less likely to drop out of school, more likely to complete a bachelor's degree, and less likely to transfer to a lower-level college than similar students not enrolled in these courses. Students in each type of remediation are almost 10 percent less likely to drop out than similar students not in remediation.75