The Income Gaps in Higher Education Enrollment and Completion
Indicators of Higher Education Equity in the United States, a new report from the Pell Institute for the Study of Opportunity in Higher Education and the Alliance for Higher Education and Democracy at the University of Pennsylvania (PennAHEAD), begins with a simple question: “When will the U.S. close the gap in higher education attainment by family income?”
The data in the report cover a lot of ground, examining multiple studies and governmental databases to see who enrolls in higher education, the kinds of institutions they attend, whether financial aid can overcome barriers, how family characteristics affect higher education outcomes, and how the United States compares internationally.
Overall, data show that, as costs of attendance and student loan debt rise while federal Pell Grant support does not, higher education enrollment and completion continue to be less accessible for low-income students and some students of color.
Gaps in Access and Completion by Race/Ethnicity and Socioeconomic Status
- In 2016, students who had recently left high school (whether they graduated or not) from the highest-income quartile were much more likely than those from the lowest-income quartile to continue on to some type of higher education (78 and 46 percent, respectively).
- Large gaps also exist for high school graduates who continue to higher education (87 percent for the highest-income quartile and 61 percent for the lowest). This 26 percentage-point gap has narrowed slightly since 1990, when it was a 31 percentage-point gap, and since 1970, when it was a 33 percentage-point gap.
- There are also gaps by race, as Asian (87 percent), white (71 percent), and Hispanic (71 percent) students who graduated high school are more likely than black students (56 percent) to continue on to college. However, these gaps seem to narrow for some races and ethnicities when disaggregated by family income (see fig. 1).
Figure 1. Percent of High School Graduates Continuing on to College in 2016, disaggregated by race/ethnicity and family income quartiles. [click to expand]
- Gaps also exist for first-generation students. According to data of tenth-grade students in 2002, 93 percent of students with a parent who earned a bachelor’s degree had enrolled in college by 2012 compared with 84 percent of students with parents who had some college education and 72 percent of students with parents who never attended college.
- The report estimates that students from families in the highest-income quartile are five times more likely to graduate with a bachelor’s degree by age 24 than students in the lowest-income quartile (58 percent compared with 11 percent). This has decreased only slightly since 1970, when the highest-income students were 6.6 times more likely than the lowest-income students to graduate by age 24 (40 percent compared with 6 percent).
Affording College is More Difficult Than Ever
- The average annual costs (including tuition, fees, room, and board) for public four-year institutions are rising faster than for public two-year institutions. Costs for public four-year institutions rose from an average of $7,715 in 1974–75 to $19,488 in 2016–17 (a 253 percent increase), while two-year institutions went from $6,274 to $10,091 in the same time span (a 161 percent increase).
- While average college costs for full-time undergraduate students across public and private institutions rose by 148 percent since 1974–75, federal support for low-income students through Pell Grants only increased by 20 percent (in constant dollars adjusted for inflation). The maximum Pell Grant in 2016–17 was $5,815, while the average costs for an undergraduate full-time student were $23,091.
- Because costs are rising far faster than Pell support, the maximum Pell Grant amount covers a much smaller percentage of college costs, declining from 65 percent in 1974–75 to 25 percent in 2016–17. If Pell Grants were to cover the same 65 percent portion of college education, the maximum grant in 2016 would need to be $15,471.
- Because of increased tuition and declining support, a heavier burden has fallen on students and their families, who paid 51 percent of higher education costs in 2015 (compared with one-third of costs in the late 1970s). State and local expenditures covered another 37 percent and the federal government covered 11 percent.
- While the net cost of attendance in 2012 (cost of attendance minus grant aid) is cheaper for dependent students in the lowest-income quartile ($13,699) than for students in the highest-income quartile ($26,580), net cost of attendance represents 84 percent of the average family income for the lowest-income families and just 15 percent for the highest-income families.
More Debt, Higher Unemployment, and Lower Wages for Some Students
- Inequalities between income brackets persist after graduation. More than two-thirds (68 percent) of seniors borrowed to finance their education in 2012, rising from 51 percent in 1990. According to the report, “The average amount borrowed increased by 73 percent from 1990 to 2012 in 2016 constant dollars and averaged $26,600 in 2012.”
- Among college seniors between eighteen and twenty-four years old, black students (90 percent) were much more likely to have received a student loan than Hispanic (72 percent), white (66 percent), or Asian (45 percent) students. Black students on average had higher student debt and their debt levels rose faster than for other race and ethnicity groups between 1990 and 2015 (see fig. 2).
- Of graduates who earned bachelor’s degrees in 2008 and were employed (and not enrolled in further education) in 2012, students with parents in the highest bracket earned far more on average ($50,993) than students from the lower-income quartiles (between $43,000 and $43,500, depending on the quartile).
- These students from the highest two income quartiles were also less likely to be unemployed (6 percent) than the lowest quartile (9 percent).
Figure 2. Average Cumulative Loan Amounts for Undergraduate Seniors, Age 18 to 24, Disaggregated by Race/Ethnicity. [click to expand]
The data and images in this article are from included by permission of the Pell Institute for the Study of Opportunity in Higher Education from Indicators of Higher Education Equity in the United States, a report published in partnership with the Alliance for Higher Education and Democracy at the University of Pennsylvania (PennAHEAD).