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April 19, 2016

Over 40-plus Years, Poorest Students Receive Just 10 Percent of Bachelor’s Degrees

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Report: Family income major indicator in college entrance, selection, graduation

Media Contact: 

Beth Hogan
Council for Opportunity in Education
Beth.hogan@coenet.us
(978) 979-1886

Jeff Frantz
Penn GSE
frantzj@upenn.edu
(215) 898-3269

WASHINGTON, D.C. (April 19, 2016) – Although more U.S. students from all races, ethnicities and economic levels have enrolled in colleges and universities after high school in the past 40 years, family income has a significant impact on entrance to college, student loan debt and degree completion, according to a report issued today. The persistent inequality is associated in part, the report shows, with less resourced post-secondary school choices for students from families in the country’s lowest income group.

The Indicators of Higher Education Equity in the United States: 2016 Historical Trend Report by the Pell Institute for the Study of Opportunity in Higher Education and the University of Pennsylvania Alliance for Higher Education and Democracy examines trends in post-secondary enrollment in the U.S. by family income, race/ethnicity and family socioeconomic status. It uses data from Current Population Survey (CPS), the National Center for Education Statistics (NCES) Beginning Postsecondary Study, the NCES high school longitudinal studies, and other public sources.

The report shows that while bachelor’s degree attainment rates have increased for all family income quartiles, the distribution of bachelor’s degree attainment between family income levels has remained relatively constant since 1970. The top two family income quartiles together accounted for 72 percent of the total bachelor’s degrees attained in 1970 and 77 percent of the bachelor’s degrees in 2014.

The report indicates that students from higher and lower income quartiles enroll in different types of colleges and universities with varying rates of college success. 

Among the key indicators:

The gap narrowed on those who enroll in post-secondary education:

  • Gaps across racial groups have narrowed since 1976. Between 1976 and 2014, college continuation rates of high school graduates increased 26 percentage points for Blacks (rising from 45 percent to 71 percent); 19 percentage points for White, non-Hispanics (from 49 percent to 68 percent); and 12 percentage points for Hispanics (from 53 percent to 65 percent).
  • There was a 27 percentage-point gap in college continuation rates for high school graduates in the top and bottom income quartiles in 2014, compared with a 33 percentage-point gap in 1970.  

Income level influences the type of postsecondary education that students attend:   

  • The more selective the higher educational institution, the lower the percentage of low-income students who attend.  Just 15 percent of students at the “most competitive” institutions were low income (as measured by federal grant aid receipt) in 2013.
  • Among 2002 high school sophomores, just 4 percent of students in the “most competitive” institutions were from lowest socioeconomic quartile, while 69 percent were from the highest socioeconomic quartile. 

  • Although just 8 percent of all students attended for-profit institutions in 2013, lower-income students are far more likely to attend for-profit institutions than students from families with higher incomes.  Students eligible to receive federal grants were more than three times as likely as non-federal grant recipients to attend for-profit institutions in 2013, up from two times as likely in 2001.

Financial barriers to paying college costs:

  • Average college costs increased in constant dollars by 128 percent between 1975 and 2013 while over the same period, the maximum Pell Grant increased by just 18 percent.  In 1976 the maximum Pell Grant covered two-thirds of the average cost of college attendance. If the maximum grant kept pace with the cost of college, it would be $13,557 rather than $5,550.  

  • The average cost of attendance at higher education institutions in 2012 was 238 percent of family income for dependent students with family incomes of less than $10,000 and 18 percent of family income for students with family incomes of $200,000.

  • Average unmet family need for tuition more than doubled between 1990 and 2012 for dependent full-time undergraduates in the lowest family income quartile.

  • Despite attending lower-cost colleges, Pell Grant recipients who borrow average higher amounts of debt than those who borrow and do not receive Pell Grants.

Degree attainment:

  • Fifteen percent of students who were high school sophomores in 2002 and from the lowest socioeconomic quartile attained a bachelor’s degree within 8 years of their scheduled high school graduation, compared with 22 percent of students from the second socioeconomic quartile, 37 percent from the third quartile, and 60 percent from the highest income quartile.

  • Reflecting slower rates of growth in the U.S. than many other countries, the U.S. in 2014 ranked 19th out of 43 countries in bachelor’s degree attainment among 25 to 34 year olds.  This ranking by the Organization for Economic Cooperation and Development (OECD), was down from a U.S. ranking of 2nd in 2000.

“The U.S. now has an educational system that sorts students in ways that have profound implications for later life chances. 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,” said Margaret Cahalan, co-author of the report and director of The Pell Institute for the Study of Opportunity in Higher Education.

“Students from higher-income families have the resources that enable meaningful choice from among the array of available options nationwide,” said Laura Perna, co-author of the report and director of the Alliance for Higher Education and Democracy (AHEAD) of the University of Pennsylvania. “But resource constraints and structural failures often limit the choices of students from lower-income families to non-selective or for-profit postsecondary educational institutions.”

The Pell Institute conducts and disseminates research and policy analysis to encourage policymakers, educators, and the public to improve educational opportunities and outcomes for low-income, first-generation, and disabled college students.

Penn AHEAD is dedicated to fostering open, equitable, and democratic societies through higher education. Located within the Graduate School of Education of the University of Pennsylvania, AHEAD conducts original research and applies a multidisciplinary, research-based approach to address the most pressing issues regarding the societal contributions of higher education in the United States and the world.