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Colleges drop the ball in aid to poor students

Wealthy institutions should do more to educate needy students.
University Business, Jan 2005

Colleges and universities have dropped the ball in aiding lower-income students. According to a report from the federal Advisory Committee on Student Financial Assistance, using data from the National Center for Educational Statistics, up to 140,000 qualified students from low-income families are not attending college simply because they can't afford it. The Century Foundation, according to a recent Pittsburgh Post-Gazette report, found last year that the poorest quarter of the U.S. population comprised only 3 percent of the student bodies at the 146 most selective schools. And recipients of Pell Grants--federal aid targeted to the neediest students--are getting harder to find on wealthy college campuses.

Why, when colleges and universities are exceedingly privileged institutions? Our institutions of higher education receive state and federal support either directly or indirectly through financial aid to our students. We're exempt from most taxes. Our benefactors get a tax reduction for their gifts to us.

Historically, this has been a good deal for the country, since our graduates serve as the engine of economic growth. But a close look at the downward trend of aid to needier students indicates we are no longer fulfilling our promise to make higher education accessible to all.

Surprisingly, the wealthiest public and private colleges and universities in the country are under-performing in this area, measuring by the prevalence of Pell Grant recipients. (Typically these are given to students with family incomes below $40,000 per year.)

In 1992, Pell Grants were awarded to 27.5 percent of college students, and the percentage rose to 29.7 in 2002. Yet the percentages of Pell Grant students at a selected list of wealthy institutions most often declined, and on the average remained well below the average 29.7 percent.

Recipients of Pell Grants are
getting harder to find
on wealthy college campuses.

Let's look at the publics first. In the 1992-93 academic year, the University of Michigan gave Pell Grants to 28 percent of its students. Nine years later, in 2001-02, Michigan awarded Pell Grants to 12.5 percent of its students. The University of Wisconsin awarded Pells to 16.7 percent in 1992-93, declining to 11.7 percent almost a decade later. Penn State? It awarded Pells to 22.2 percent of its students in 1992-93 and dropped to 18.7 percent in 2001-02.

Private colleges did somewhat better. Harvard and Cornell raised their numbers by about 2 percent but only to 6.8 percent at Harvard. Cornell did much better by moving up to 16.3 percent. New York University's Pell awards dropped from 29 percent to 18.4 percent, Columbia's dropped by nearly 2 percent in the same 1992-93 to 2001-02 and the worst performance went to Washington & Lee which dropped from a dismal 5.3 percent to an even lower 3.4 percent.

To be fair, Pell Grants aren't the only test of an institution's commitment to educating lower-income students. Some cover costs for these students through institutional resources--and wealthy colleges and universities have, in general, been willing to cover 100 percent of demonstrated need. Princeton, for example, has replaced loans with grants for low-income families.

Colleges with fewer resources and more significant numbers of low-income students often are not able to cover full demonstrated need. But many private institutions have joined the Independent 529 Consortium--a prepaid tuition plan that provides a guaranteed price for future tuition below today's cost. Tellingly, many of the wealthiest institutions have not been willing to assist parents in this way. Conspicuously missing from the consortium are Cornell, Columbia, Harvard, Lafayette, Penn, Washington & Lee, and Yale. Princeton, Notre Dame, Vanderbilt, Rice, Stanford, and Amherst are among the group's 245 members.

Short of a mass epiphany among the nation's wealthiest institutions, the situation isn't likely to change--that is, unless foundations and individual donors redirect their financial support to institutions that are doing their fair share in educating lower income students.

Every college and university in the nation markets itself as a pathway to success for anyone who passes through their gates. If a significant portion of young people in search of a top education are barred from their dreams by affordability issues, then our educational institutions are in the business of dashing dreams, not fulfilling them.

Thomas R. Kepple Jr. is the president of Juniata College in Huntingdon, Pa., a member of the Independent 529 Plan.

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