Inequity Persists In U.S. Higher Education Opportunity, Outcomes

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WASHINGTON, D.C. (April 25, 2017)  – Although college participation rates continue to rise among United States students of all races, ethnicities, and economic levels, a new report issued today details the country’s emerging two-tiered educational system that is increasingly likely to produce different life outcomes for rich and poor students. Students from the highest income families are nearly five times more likely to earn a bachelor’s degree by age 24 than students from the poorest families, the report shows. The report also shows that college completion has increased at a slower pace in the U.S. than in many other developed countries, especially since 2000.

The report, Indicators of Higher Education Equity in the United States: 2017 Historical Trend Report, compiles statistical data since the 1970s from the nationally representative Census Bureau household studies, and the National Center for Education Statistics (NCES)-sponsored high school and college longitudinal studies which track college entrance and completion by family income, socioeconomic status, and race/ethnicity.  It was jointly prepared by the Pell Institute for the Study of Opportunity in Higher Education at the Council for Opportunity in Education (COE) and the Alliance for Higher Education and Democracy at the University of Pennsylvania Graduate School of Education (PennAHEAD).  

Today’s report release also marks the Pell Institute launch of an Equity Indicators website, which will provide searchable data files for this year’s report, reports from previous years and link to accompanying Shared Solutions essays for reports.

Selected highlights of the 2017 report: 

Financial Aid and College Costs

• The value of the federal Pell Grant, which the nation’s poorest students depend on to pay for college, is declining. The maximum Pell Grant covered 67 percent of average college costs in 1975-76, but only 26 percent of those costs in 2015-16.  In order to cover the same percentage of college costs as in 1975-76, the Pell maximum of $5,775 in 2015-16 would have had to be $15,029.

• Financial aid is insufficient to cover college costs for many low-income students. In 2012, dependent full-time undergraduates from the lowest income family quartile averaged $8,221 in unmet financial need. This compares to $3,495 (in constant 2012 dollars) in 1990.

• On average, as the selectivity of the college increases, the percent of low-income students attending decreases.  In 2014, the percentage of full-time, first-time degree/certificate-seeking undergraduate students who were awarded Pell or other federal grants ranged from a low of 16 percent at the most competitive institutions, to 59 percent at two year institutions and non-competitive 4-year institutions, to 75 percent at private for-profit institutions.

• The percentage of graduating bachelor’s degree recipients who have borrowed has risen dramatically since the 1990s, increasing from 49 percent in 1992, to 71 percent in 2012.  Despite attending lower-priced colleges on average, Pell recipient borrowers on average have larger debt upon graduation than non-recipient borrowers ($31,000 compared to $27,400).

College Continuation After High School

• In 2015, among high school graduates, 86 percent of students from the highest income quartile and 61 percent from the lowest family income enrolled in college in fall after their scheduled high school graduation date.  These rates compare with 79 percent of students from the highest income quartile and 46 percent from the lowest quartile in 1970.

Bachelor’s Degree Attainment by Age 24

• After remaining relatively unchanged between 1970 and 2000, bachelor’s degree attainment rates by age 24 for dependent family members in the lowest income quartile doubled between 2000 and 2015, from 6 percent to 12 percent. Despite this increase, in 2015, the most affluent U.S. students were about 5 times more likely to attain a bachelor’s degree by age 24 than the poorest students (58 vs. 12 percent).

• In 1970, the country’s most affluent U.S. students were 6.6 times more likely than the poorest students to earn their bachelor’s degree by age 24 (40 v. 6 percent).

International Comparisons

• By 2015, 36 percent of the U.S. population aged 25 to 34 had attained a bachelor’s degree or higher, up from 30 percent in 2000.  But over the same period, the international standing of the U.S. in bachelor’s attainment has declined among the 43 countries included in the OECD (Organization for Economic Cooperation and Development).  In 2015 rankings, the U.S. ranked 18^th in bachelor’s attainment, down from 2^nd out of 30 countries in 2000.
• In 2015, the Russian Federation (58 percent), Lithuania (55 percent), Switzerland (49 percent), and Korea (47 percent) each reported that at least 45 percent of their populations aged 25 to 34 had completed a bachelor’s degree or above. 

“Average college costs, relative to the U.S. average family income, and the increasing development of a stratified, two-tiered higher education system in the United States are two major factors that are depressing the rates of attainment, especially for low-income and first-generation students,” said Margaret Cahalan, report co-author and director of the Pell Institute. “On average, children of more affluent and college-educated parents tend to attend more resourced and selective 4-year institutions, while lower-income, first- generation students are overrepresented at often less resourced 2-year institutions and for-profit institutions. This calls for more study.”

Laura Perna, report co-author, professor at the University of Pennsylvania, and director of PennAHEAD, said,  “For reasons of social justice and international competitiveness, closing the persisting gaps in college attainment must be a national priority. Public policymakers and institutional leaders must do more to ensure that all students, regardless of family income, social class, and race/ethnicity, have the opportunity to attain a college degree.”

The two organizations instituted the Equity Indicators project in 2015 with a shared mission to help foster a U.S. higher education system in which all citizens, regardless of family backgrounds, have the opportunity to develop their talents and capacity to fully participate in a democratic society.  

The report and the accompanying Search for Solution Shared Dialogues were made possible with support from the Travelers Foundation and Lumina Foundation.