Now that the election is over, we hope that policymakers and the Administration will focus on fixing the student aid system. In order to do this, it is critical to agree on the goals of federal student aid policies.
As Professor Sara Goldrick-Rab explained in an article this summer, the Truman Commission in 1947 called for national investments in higher education to promote democracy by enabling all people to earn college degrees. Subsequent expansion of community colleges, adult education, and federal aid, she writes, “…occurred not in the name of economic stimulation but to reduce inequality and further active citizenship.” These goals, Professor Goldrick-Rab concludes “…have been steadily corrupted.”
Measured by the goals of reducing inequality and furthering civic involvement, federal student aid policies have failed. As we wrote in an earlier post, the shocking reality is that despite all of the government money spent on financial aid, the difference in college graduation rates between the top and bottom income groups has widened by nearly 50% over two decades. Only about 9% of low-income students get college degrees! According to Professor Richard Wolin, children of a family earning $90,000 or more per year have a 50% chance of earning a B.A. by the age of 24. When household income decreases to $60,000-$90,000, the odds are one in four. For children in a family with income below $35,000, the odds of earning a B.A. by the age of 24 fall to one in 17.
There are no easy answers to this problem. In fact, a recent New York Times article ends with a quote from a fellow at the Atlantic Council that “No one has the slightest idea what will work. The cupboard is bare.”
The Chronicle of Higher Education solicited comments this summer on the question of whether higher education is not just failing to promote inequality, but actually driving inequality. Some experts thought the problem is really about credential inflation and the closing of career paths that were formerly open to individuals without college educations. Most pointed out ways in which higher education may in fact be driving inequality. A few excerpts:
Richard Kahlenberg: “Instead of counteracting the inequalities they inherit, colleges and universities magnify them.”
Professors Laura Hamilton and Elizabeth Armstrong note that declining state support and rising tuition do more than reduce access to public higher education for many low-income students. They write that “The trends also lure colleges into catering to the social and educational needs of affluent, full-freight students at the expense of others.”
Professor William Julius Wilson writes that elite institutions now feature a disproportionate number of students from affluent backgrounds. And Professor Thomas Espenshade concludes, on balance, that elite higher education helps maintain social inequality in America.
There is still much debate needed on causes and effect, but the trends are clear— Social mobility in this country is slowing down and too many individuals born into lower-income families are unable to move up through education.
Access to quality higher education is just an illusion for many of our clients and other low-income individuals seeking to better their lives through education. As a society, we keep selling the college dream, but as Professor Goldrick-Rab describes it: “The reality is cruel: Many families now dream the same college dream families always have, but run in place in their efforts to achieve it.” Debt burdens make the situation even worse, leaving many individuals worse off than if they had never tried to go to school in the first place.
There is plenty of blame to go around. Colleges and universities in all sectors too often focus on their own bottom lines and rankings (or in some cases profits) rather than truly promoting equal access to education. Too many fight efforts to hold them accountable for consistently poor outcomes. State governments continue to slash aid for public higher education, making it increasingly out of reach for the neediest students. In the meantime, as costs escalate, grant dollars pay for less and students are increasingly forced to rely on loans to pay for school. Federal policy should target funds to those who most need them, yet some policies, such as tax breaks, provide help mainly for higher-income students and families.
At the same time, federal policy hammers student borrowers who get behind on their loans. These policies are particularly short-sighted in that they prevent many individuals from going back to school. Many of our clients come to us because they want to go back to school and improve their employment prospects. Current policies reserve the worst punishment for these borrowers–incentivizing collection agencies to mislead borrowers about their options, denying borrowers opportunities to get out of default and back in school, seizing wages and tax refunds administratively and otherwise barring individuals from a fresh start.
We need to reset our policy priorities so that these borrowers are given the opportunity for a fresh start, to finish school, and hopefully climb the economic ladder.
To get started, we urge policymakers to consider these higher education financing priorities as they move forward post-election.