Over the course of 2014, I spent a lot of time mulling over the seeming contradiction between increasing college-going rates among low-income Americans and stagnant social mobility (culminating in a paper for the Thomas B. Fordham Institute released this month).
The disconnect is as follows:
- A college degree has a big effect on whether a child born at the bottom will move up the economic ladder;
- More low-income students than ever have access to higher education;
- Yet mobility rates have not changed over the past fifty years.
How has rising educational attainment not made a dent in mobility?
Put simply, higher education more resembles a lottery ticket than a guarantee for low-income Americans. In other words, the payoff attached to a college degree is often large for low-income Americans, but the probability attached to that payoff is small.
According to the Educational Longitudinal Study (ELS), which followed high school sophomores from 2002 to 2012, just over 14 percent of students from the lowest socioeconomic quartile had attained a bachelor’s degree or higher after 10 years. Nearly two-thirds of low-SES students had not attained any postsecondary credential during that span. These numbers have not changed much over time; one study found that 5 percent of low-income eighth graders born in the 1960s earned a BA, compared to just 9 percent of those born in the 1980s. Plus, gaps in attainment between low-income and high-income students grew over that period.
So while college access advocates have touted the payoff of a college degree to justify an expansive access agenda, the access agenda has not actually made higher education an engine of mobility. More troubling, access advocates’ standard solution to this disconnect—more public money to pay for more access—will result in more of the same.
Two Problems
In diagnosing this problem, it is helpful to distinguish between two groups: those who are not college ready when they graduate high school, and those who are.
Disadvantaged students unprepared for college face an uphill climb. Any high school graduate can enroll in college and access federal aid. But, those who aren’t college ready must enroll in remedial courses that do not count toward a degree and are a notorious dead-end for many students. While there are some reforms that could improve the quality of and placement process into remedial education, it’s wishful thinking that two semesters of remediation can make up for 12 years of subpar education. We need to create alternatives to traditional degrees for the non-college ready that provide a foot in the door for a career.
But even prepared low-income students encounter significant obstacles. One study found that low-income students scoring in the top 25 percent in high school math were less likely to graduate college than high-income students scoring in the bottom 25 percent.
Clearly, higher education has become far too expensive for many Americans, especially the poor. Unprecedented increases in federal grant funding haven’t helped much, as the purchasing power of the Pell Grant has reached an all-time low, washed out by tuition increases.
First-generation college students also lack the information necessary to make good choices throughout the college-going process. A large percentage of students are “mismatched”—attending an institution that doesn’t match their academic qualifications—and a nontrivial proportion of those who even apply and get in fall victim to “summer melt” and fail to show up in September.
Finally, far too many colleges and universities are simply not organized to promote student success. They have every incentive to take students’ tuition dollars and less incentive to worry about how they fare on campus and afterwards.
The Way Forward
Rather than simply pouring more money into this system that is failing the vulnerable, we need more creative thinking as to what we can do about it.
- Innovation in Financial Aid
We know that additional grant money can increase access, and there is some evidence that it affects degree completion. But after a decade of record federal investments, there’s a growing sense that we need changes to the design and delivery of aid, not just the amount.
For instance, federal financial aid rules consider students “full-time” if they take 12 credits per semester, but you cannot finish a 60-credit associate's degree in two years at that rate. Experiments with grant programs that incentivize academic performance and encourage full-time enrollment appear to have a positive effect on retention and credit accumulation. Such incentives can nudge low-income strivers to graduate in a timely, cost-effective manner.
Private financing can also play a fruitful role. Whereas publicly funded grants and loans provide almost no information about the value of different programs, market-based options—like “Income-Share Agreements” —could provide needed resources while also steering low-income students toward worthwhile programs. Under an ISA, students agree to pay a percentage of their future income for a defined period of time in exchange for private financing. This gives investors incentives to ensure student success.
- Solving information problems
Research suggests that providing information directly to students in an accessible and personalized format can raise aspirations, change application behavior, and shape enrollment decisions. Hoxby and Turner’s Expanding College Opportunities study illustrated how a low-cost college guide could lower rates of undermatching among low-income, high achieving students. Delaware is now implementing that model statewide.
These interventions are only as good as the data upon which they’re based, and data on cost and quality are often incomplete or entirely absent. Critical information for low-income consumers—the graduation rates of Pell Grant recipients, for instance, or graduates’ post-graduation earnings and employment rates—are still not systematically available. Better federal and state-level data collection could help guide consumers towards sound choices.
- Boosting the Supply of Quality Seats
The effect of “demand side” reforms to financial aid and information will ultimately depend on the supply of quality seats. If the capacity of good programs is basically fixed, then every low-income student who gets a seat will displace another who would have benefited.
Fortunately, we are starting to learn how to design post-secondary programs that set low-income students up for success, but it often requires fundamentally reforming how colleges are organized. For instance, new research suggests that immersive, structured programs with clear expectations for student performance and behavior can promote success.
Unfortunately, most colleges are perfectly content with business as usual. To start, the federal government could put colleges on the hook when students default on loans, giving colleges more incentive to make institutional changes.
But policymakers must also create space for options besides the traditional two- or four-year college that can provide additional pathways to the middle class. For instance, learning skills for a particular field may not require multiple semesters of fifteen-week courses, general education requirements, and the like, but rather short bursts of intensive, targeted instruction followed by opportunities to apply that learning on the job. Learners could repeat this sequence several times to keep up with industry demands, all while earning credentials that add up to a larger whole.
Existing colleges and universities can promote upward mobility, but they are not miracle workers. It is time to again redefine what post-secondary education looks like and who it should serve.
