2014—2015 PAYSCALE
The Haves and the Have-Nots: How to Make College
Accessible to Everyone
college salary report
by Jen Hubley-Luckwaldt, PayScale

Last year, according to the College Board, in-state tuition and fees at public, four-year universities went up 2.9 percent. Meanwhile, the real value of wages has decreased 7.9 percent since 2006, and colleges are increasingly focused on offering merit aid instead of need-based aid. As a result, many low-income and first-generation college students find themselves forced to choose between an education they can't afford and a career path that offers lower wages and less opportunity.

Unsurprisingly, many respond by dropping out. According to a recent study from the Pell Institute, low-income and first-generation students are nearly four times more likely to drop out after their first year than continuing-generation students. Forty-three percent hadn't earned a degree within six years, and 60 percent of students who left school did so after the first year.

The result is a widening gulf between students who have resources – parents with higher incomes, schools with better guidance programs – and those who do not.

college salary report
Lack of Information About Options

Part of the problem is that it's difficult for have-not students even to acquire information about financing options for college.

"Students and families may make hasty and costly financial decisions regarding college, because they just do not have ready access to information," said Tina Tran Neville, co-founder of CollegeAppz, a site that helps first-generation and low-income students navigate the college admissions and financing process.

"For example, when I went to college, my father emptied part of his 401K to send me, his first child, to college," said Neville. "In my sophomore year, he let me know he unfortunately did not have enough money to contribute again. My family so wanted to send me to college that they spent their hard-earned money without knowing about the many scholarships, financial aid, and university-based funding. Having worked with many families in the first-generation and immigrant communities, I see the same hasty and costly financial decisions being made time and time again."

And Neville at least benefitted from having a family that prioritized a college education so highly. Many low-income or first-generation students don't have this luxury because their families are struggling to get by day-to-day and can't afford to focus on future educational plans.

Even if families of first-generation students do find the time and energy to focus on college, it can be difficult to get accurate information. The problem, Neville says, is that information is out there, but it's scattered in different sources, not written in plain English, or not accessible to students from other linguistic and cultural backgrounds.

In addition, low-income and first-generation students are more likely to attend community college and for-profit institutions, where the debt load – and therefore, drop-out rate – is higher.

"However, when these students start off at four-year institutions, they are seven times more likely to graduate with a bachelor's degree," says Neville, who notes that only 25 percent of these students opt for four-year colleges.

college salary report
Find the Money

Student loan debt currently tops $1 trillion. Two-thirds of students take out loans. The average loan is $27,000, and 35 percent of students under age 30 are 90-plus days late repaying their loans. Meanwhile, the Pell Institute reports, "funding for the Federal Pell Grant and Work-Study programs has not kept pace while tuition and fees have increased dramatically in recent years," which leaves low-income and first-generation students with fewer low-cost resources to lean on, in order to fund a four-year degree.

"Tuition is the major culprit," said Greg Gottesman, Managing Director, Madrona Venture Group, in a 2013 TED Talk. "No expenditure in the United States has increased more over the last several decades than tuition. College tuition has skyrocketed 1,000 percent since 1978. Health care costs, by comparison, have risen 250 percent during this time period."

Income has stagnated during the recession, and need-based aid hasn't kept pace with merit aid, according to a 2011 report from the National Center for Education Statistics. The National Association of Student Financial Aid Administrators explains :

Over time, undergraduates have seen the distribution of merit aid increase from 6 to 14 percent from 1995-96 to 2007-08, according to the report. The percentage of undergraduates receiving need-based aid also increased, but by much less. In 2007-08, 37 percent of undergraduates received need-based aid, compared to 32 percent in 1995-96.

In addition, more merit went to wealthier students: 13 percent in 1995-6 and18 percent in 2007–08. This makes sense: students from higher income backgrounds have access to tutors, prep schools and classes, and other advantages, which can translate to better grades and a better shot at merit aid.

"Today, many leaders in higher education would like to break free of the commercial logic that leads to this perverse result," writes Stephen Burd in Washington Monthly. "But it can be difficult to escape, especially for schools that lack deep endowments and have to compete hard for revenue. Either a school offers tuition discounts to students from affluent families, or else those students (and the revenue they could provide) wind up going to other institutions that offer similar or more generous discounts."

The upshot is less money for poorer students, and less help in finding the money that exists.

college salary report
The Importance of Talking About Class

A recent Stanford study found that talking about class helps first-generation and lower-income students prepare for and succeed in college.

"The research showed that when incoming first-generation students saw and heard stories from junior and senior students with different social-class backgrounds tell stories about their struggles and successes in college, they gained a framework to understand how their backgrounds shaped their own experiences and how to see this as an asset," says MarYam Hamedani, co-author of Closing the Social-Class Achievement Gap and associate director of Stanford's Center for Comparative Studies in Race and Ethnicity.

Hamedani tells Stanford News that while colleges aggressively recruit first-generation students, they rarely aid in building this framework. Hamedani and her colleagues found that conducting a one-hour "difference education" program at the beginning of the year was helpful in boosting first-generation students' GPAs and increasing the chance that they'd avail themselves of mentorship programs.

The study compared two orientation programs. Both were an hour long and featured panelists in their junior and senior year, who shared stories about adapting to college. One program included references to class or first-generation student status.

The "difference education" panel was correlated with average year-end GPAs of 3.4 for first-generation students, compared with average year-end GPAS of 3.16 for first-generation students who took the panel that did not include a discussion of class. Continuing-generation students also saw a slight boost in average GPA from difference education programs, with an average GPA of 3.51 for difference-education and 3.46 for standard orientation.

First-generation students were more likely to seek mentorship after attending the difference education panel (1.89 vs. 1.45 times) while continuing-generation were less likely (1.8 vs. 2.18 times).

Hamedani said that bridge programs focusing on academic strategies are helpful, but not sufficient, to help students succeed.

"In American society," she says, "we try not to talk about our class differences. We found, however, that college students can learn a lot about themselves and one another when they do so. Engaging students about differences, when done in the right way, can be extremely beneficial and empowering."

college salary report
The Value of Information

"Smart high school guidance counselors have long told their high-achieving but lower-income students to apply to schools with large endowments because those institutions have the money to offer better financial aid packages," writes Robert Kelchen, assistant professor of higher education at Seton Hall University, in his recent article in Washington Monthly, America's Affordable Elite Colleges 2014 .

Kelchen notes, however, that a larger endowment doesn't equal lower cost for low-income students. While Harvard has an endowment of has $1,240,548 per student and charges a net $1,533 to students from families earning $30,000 or less per year, Princeton and Yale have even higher endowments and charge at least twice as much.

"Tuition for everyone at the nation's most elite universities would be a giveaway to many wealthy students," writes Libby Nelson at Vox.  Only a handful of universities have such vast per-student resources, and they tend to have rich student bodies already. Statistics from Harvard, which offers financial aid to families making up to $200,000 per year, suggest that at least one-third of students are from families with higher incomes."

Better for Everyone

The growing gap between rich and poor prospective students has far-reaching consequences for the economy.

"Stronger education means a stronger workforce for productive, healthy communities," said Neville. "We need better access for all students, not just because it's the right thing to do, but because it's better for our society. Without access, we'll miss out on the talents and innovation of these workers."

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