The Increasing Gap between Income and Graduation Rates

A recent study by the Pell Institute, “Indicators of Higher Education Equity in the United States,” (see below) shows a widening gap between the graduation rates of high and low income students and provides a rationale for increasing services and programs for these students.  One of the most significant findings was that the highest income families “were 8 times more likely than individuals from low-income families to obtain a bachelor’s degree by age 24 (77 percent vs. 9 percent.)   The graduation rates for low income students are an incredible 66% lower than for higher income students.  It was noted that this gap in educational attainment has doubled since 1970 when the gap between lower and higher income students was  only 33 percentage points (40 percent vs. 6 percent.)  (p. 31)   Since income generally increases with educational attainment, it is suggested that this increasing gap is related to the growing income inequality in the U.S.

  

Here are some other important statistics from the report:

• In 2012, 82 percent of 18-24 year olds from the top family income quartile participated in college, compared to 45 percent of those in the bottom quartile. 
• The percent of average college costs covered by the maximum Pell Grant declined by 40 percentage points, from a high of 67% in 1975 to a low of 27% in 2012.
• Average unmet financial need was more than 2 times higher in 2012 than in 1990.
• State and local revenues for higher education accounted for 57% of funding in 1977, but only 49% in 2012.  Additional cost has been shifted to students and their parents. 
• The college completion rate of students from higher income levels is much higher than the rates for lower income students.  In 2013, the completion rate of students from the top income quartile was 99%, from the second quartile 51%, from the third quartile 29%, and from the lowest quartile only 21%.

When examining issues of equity, the statistics indicate lower levels of educational attainment for diverse groups:

• There is a lower level of educational attainment for African Americans and Hispanics and higher levels for Whites and Asians.
• There is a lower level of degree completion for students who are the first in their family to attend college, as compared to students whose parents attended college. 
• There is a lower level of educational attainment for older students, as compared to younger students. 

What are the causes of the increasing gap?  The answers are many and varied, but suggest some steps that could be taken to help low-income students finish their degrees.  Factors contributing to this growing gap in educational attainment include access to quality high school education, college readiness,  information about college, need for greater assistance in completing the application process, increased programs supporting low-income first-year students, and education that meets the needs of students who often work full time.

One of the most important factors in the lower rates of educational attainment is increased cost of higher education and lower levels of financial aid.  The Pell Grant which is used to help lower economic level students only covers 27% of the average cost of college attendance.  These lower income students turn to loans to finance the remaining cost of education while the completion rates are low, resulting in a higher default rate for student loans as they drop out of college and cannot find high paying jobs. 

Based on the above statistics on educational attainment and income level, Dr. Margaret Cahalan of the Pell Institute for the Study of Opportunity in Higher Education recommends the following 16 strategies to increase equity in education: (pp. 42-51)

1. Setting achievable targets for educational attainment and providing the means to achieve the goals.
2. Increasing college access programs.
3. Focusing on retention, completion, and increased use of student support services.
4. Supporting competency-mastery based learning and recognition of prior learning for admissions and for college credit toward program completion.
5. Providing cohort services and special focus on key transition points for students.
6. Restoring public funding for higher education, including Pell Grants
7. Providing universal free tuition for community college and the first two years of a 4-year college.
8. Increasing local scholarships for low income students.
9. Incentivizing completion through conversion of loans to grants upon completion of course or program of study.
10. Addressing the satisfactory academic progress issues through prevention and rewarding improvement.
11. Increasing integration of work and learning.
12. Increasing support for full-time college attendance and reduced work-loads for students.
13. Rewarding and incentivizing institutions for serving and graduating low-income and less academically prepared students.
14. Taking an integrated and holistic approach to student services and institutional access plans.
15. Increasing support for student equalization by embedding inclusivity and increasing respect for diversity of assets.
16. Recognizing the need for reform in evaluation and research. 

In 1947, President Harry S. Truman stated in his Report of the Commission on Higher Education, “If the ladder of educational opportunity rises high at the doors of some youth and scarcely rises at the doors of others, while at the same time formal education is made a prerequisite to occupational and social advance, then education may become the means, not of eliminating race and class distinctions, but of deepening and solidifying them.”  Sadly current statistics show that President Truman’s predictions have become true and that steps need to be taken to reverse this trend. 

From “Indicatorsof Higher Education Equity in the United States, 45 Year Trend Report, 2015” by the Pell Institute for the Study of Opportunity in Higher Education (www.pellinstitute.org ) in partnership with the University of Pennsylvania Alliance for Higher Education and Democracy
(www.ahead-penn.org)