Helping Low-Income Students Enroll and Succeed in Higher Education June 2008 1
Preparation and Income of College- Qualified Young Adults Achievement SES Quartile Quartile Lowest Highest Highest 73% 90% Lowest 54% 84% High achievement indicates the completion of at least Trigonometry, low achievement indicates the completion of at least Algebra II. Source: Advisory Committee on Student Financial Assistance, Mortgaging Our Future, 2006. Table shows percentage of 1992 college-qualified high school graduates attending 4 year college by achievement test and socioeconomic status;. 2
Uneven Progress for Low-Income Young Adults The number of low-income students entering college immediately after high school has increased by over 60 percent since 1970. However, the percent of low-income students enrolled in four-year colleges has decreased: the percentage of Pell Grant recipients enrolled in four-year colleges and universities in 1973 was 63 percent but by 2006 it had shrunk to about 40 percent. Roughly three quarters of the students at highly selective colleges come from families in the top quartile of the socioeconomic scale, just 3 percent come from the bottom quartile. Data from a six-year national longitudinal study of students who began college in 1995-96 show: Of those who began higher education in a public four-year college or university in 1995-96, only 48 percent of low-income students earned their four-year degree within six years while 69 percent of high-income students did so. Among those who started in a public two-year college only 7 percent of low-income students earned a bachelors degree while over 26 percent of high income students did so. 6 in 10 high-income students who began higher education in 1995-96 earned a bachelor s degree within six years, only 1 in 4 low-income students did so. Source: Inside Higher Education, Access Without Support Is Not Opportunity, By Vincent Tinto, http://www.insidehighered.com/views/2008/06/09/tinto. 3
Poverty is concentrated in African American, Latino and American Indian youth and elderly Poverty Status in the last 12 Months by Race and Age Percent Below Poverty Level 2006 Pacific Islander/ Native Hawaiian American Indian Age White African American Latino Asian 0 to 17 years 13% 35% 28% 12% 22% 35% 18 to 24 years 20% 29% 23% 23% 22% 31% 25 to 34 years 11% 23% 19% 10% 13% 25% 35 to 44 years 8% 18% 17% 8% 13% 23% 45 to 54 years 7% 18% 14% 8% 11% 20% 55 to 64 years 7% 18% 15% 8% 10% 19% 65 to 74 years 7% 19% 18% 11% 9% 18% 75 years and over 10% 24% 22% 14% 15% 24% Total 10% 25% 21% 11% 16% 27% Source: U.S. Census Bureau, 2006 American Community Survey. 4
There are slightly more women in poverty than men across ethnicities Poverty Status in the last 12 Months by Race and Sex Percent Below Poverty Level 2006 Pacific Islander/ Native Hawaiian American Indian White African American Latino Asian Male 9% 23% 19% 10% 15% 24% Female 12% 27% 24% 11% 17% 29% Total 10% 25% 21% 11% 16% 27% Source: U.S. Census Bureau, 2006 American Community Survey. 5
The greater a person s education level the less likely he or she will be in poverty Poverty Status by Education Level: 2006 Percent below poverty Percent at or above poverty Less than high school graduate 24% 76% High school graduate (includes equivalency) 12% 88% Some college, associate's degree 8% 92% Bachelor's degree or higher 4% 96% Total 10% 90% Source: U.S. Census Bureau, 2006 American Community Survey. 24% of those that do not graduate from high school have incomes below poverty. 96% of those with a Bachelor s degree or higher are at or above the poverty level. 6
Families in the Lowest Quintile have less aggregate income than in 1970 Share of Aggregate Income Received by Each Fifth and Top 5 Percent of Households, All Races Year Share of aggregate income Lowest fifth Second fifth Third fifth Fourth fifth Highest fifth Top 5 percent 2006 3.4% 8.6% 14.5% 22.9% 50.5% 22.3% 1970 4.1% 10.8% 17.4% 24.5% 43.3% 16.6% Source: U.S. Census, Annual Social and Economic Supplement (ASEC), Table H2. Share of Aggregate Income 60.0% 50.0% 40.0% 30.0% 20.0% 10.0% 0.0% Lowest fifth Second fifth Third fifth Fourth fifth Highest fifth Top 5 percent 2006 1970 7
Income Gaps vary substantially between states Greatest Income Inequality Between the Top and the Bottom Income Quintiles, Early 2000s Share of National State Enrollment 1. New York (6.6 %) 2. Texas (7.1 % 3. Tennessee (1.6 %) 4. Arizona (3.1 %) 5. Florida (5.0 %) 6. California (13.7 %) 7. Louisiana (1.1 %) 8. Kentucky (1.4 %) 9. New Jersey (2.2 %) 10. North Carolina (2.8 %) Total Share of National Enrollment (44.6 %) Share of National Enrollment is for Fall 2005 enrollment in degree granting institutions (National Center for Education Statistics, 2006 Digest of Education Statistics, Table 193). Source: Jared Bernstein, Elizabeth McNichol, and Andrew Nicholas, Pulling Apart: A State-By- State Analysis of Income Trends, Center on Budget and Policy Priorities and Economic Policy Institute, April 2008. 8
Wealth and Income Inequality are Increasing According to the Survey of Consumer Finances collected by the Federal Reserve Bank, aggregate household net wealth grew from $25.9 trillion in 1995 to $50.1 trillion in 2004 (both in 2004 dollars). Nearly 90 percent of the net gains occurred only among the top quartile of households in the wealth distribution. Wealth is defined as all assets net out all debts. Annual household income distribution in 2004 shows the top quartile having a share of 65 percent of total aggregate income while the bottom quartile had a 4.4 percent share. The bottom 28 million households had an average household income of $12,688, the top 28 million households had $177,265. Income distributions have widened between 1995 and 2004. The gap was $12.5 thousand in 1995 but grew to $16.5 thousand in 2004 (both measured by average income in 2004 dollars). Wealth distributions were much more unequal than income distributions and the gap has grown even more between 1995 and 2004. Source: Zhu Xiao Di, Growing Wealth, Inequality, and Housing in the United States, Joint Center for Housing Studies, Harvard University, February 2007. 9
Poor families spend a much greater share of family income on college Net Price of College as a Percent of Family Income Public Four-Year Institutions Average Family Income (2005) Families in the Bottom 40 % of Income (2002) Public Two-Year Institutions Average Family Income (2005) Families in the Bottom 40 % of Income (2002) National Average 31% 46% National Average 24% 36% Most Affordable States: Most Affordable States: Utah 18% 26% Hawaii 17% 26% Hawaii 21% 32% Idaho 18% 26% Idaho 21% 30% Utah 18% 25% Least Affordable States: Least Affordable States: Ohio 42% 62% New York 33% 49% Vermont 41% 31% Vermont 31% 46% Pennsylvania 39% 59% Maine 30% 46% Rhode Island 39% 58% Rhode Island 30% 45% New Jersey 37% 54% West Virginia 30% 45% Source: National Center for Public Policy and Higher Education, Measuring Up 2006, http://measuringup.highereducation.org/ 10
Borrowing at all levels has increased substantially Total Average Amount Borrowed from Federal and Private Sources by Full-Time Dependent Undergraduates* in Constant (2006) Dollars Year 1992-1993 2003-2004 PUBLIC FOUR-YEAR $3,973 $5,385 PRIVATE FOUR-YEAR $5,066 $7,317 PUBLIC TWO-YEAR $2,374 $3,179 FOR-PROFIT $4,707 $6,751 * Excludes PLUS loans. Source: College Board Trends Report, Student Aid Tables. 11
The number of students graduating from High School varies across states Educational Pipeline 2000 State For every 100 Ninth Graders Graduate from High School Enter College Are Still Enrolled Their Sophomore Year Graduate within 150% Time United States 100 67 38 26 18 Top Performing Graduation States New Jersey 100 86 55 40 24 North Dakota 100 84 58 42 24 Utah 100 84 32 21 16 Nebraska 100 84 50 38 22 Minnesota 100 84 53 38 25 Iowa 100 83 54 37 28 Bottom Performing Graduation States South Carolina 100 51 34 23 14 Georgia 100 52 32 21 12 Tennessee 100 55 34 23 14 Florida 100 55 32 23 14 Mississippi 100 56 36 23 13 Louisiana 100 56 33 22 12 Source: NCHEMS, Student Educational Pipeline Data, http://www.higheredinfo.org/analyses/ 12
Part I: Strategies for Increasing Educational Attainment Strategy 1: Improve Productivity in the Educational Pipeline A. Preparation of 18- to 24-Year-Olds 1. Increasing High School Rigor 2. Gauging College Readiness 3. Teacher Quality 4. Acceleration B. Preparation of Nontraditional College-Age Students C. Persistence and Completion of 18- to 24-Year-Olds 13
Strategy 1: Improve Productivity in the Educational Pipeline D. Persistence and Completion of Nontraditional College- Age Students 1. Financial Incentives 2. Incentives for Reentry E. Encouraging Articulation and Transfer 14
Strategy 2 : Redesign Policies to Enhance Educational Productivity A. Removing State Subsidies from Unproductive Majors B. Reengineering Curricula and Courses 1. Redesigning the Curriculum 2. Reengineering Delivery of Large Courses 15
Strategy 2 : Redesign Policies to Enhance Educational Productivity C. Targeting Academic Policies to Improve Quality and Efficiency 1. Reducing Rework 2. Creating Incentives for Degree Completion D. Creating Policies that Reward Demonstration of Academic Proficiency 1. Assessment and Test-Out Provisions 2. On-the-Job Learning 16
Strategy 3 : Use and Expand Facilities to Meet State Goals A. Ensuring an Adequate Supply of Undergraduate Teaching B. Promoting Collaboration Among Colleges and Universities C. Supporting Year-Round Operations D. Creating New Educational Providers 17
Part II: Levers for Policy Leadership Levers for Policy Leadership A. Planning and Leadership B. Finance 1. Allocations to Institutions 2. Tuition Policy 3. Student Financial Aid C. Regulatory Policies 1. Improve Productivity in the Educational Pipeline 2. Redesign State/Campus Policies to Enhance Educational Productivity 3. Use and Expand Facilities to Meet State Goals 18
Levers for Policy Leadership D. Accountability 1. Measures of Access 2. Progression/Completion Measures 3. Assessments of Direct Learning Outcomes 4. Evidence from the Workplace E. Governance 19
Policy Leadership Strategies for Planning Increasing and Finance Regulation Accountability Governance Educational Leadership Attainment Alignment 1.Improve Productivity in the Educational Pipeline 2.Redesign Policies to Enhance Educational Productivity Consistency 3.Use and Expand Facilities to Meet State Goals 20