Unmet Financial Need for Undergraduate Students

From the 2004 National Postsecondary Student Aid Study we have calculated unmet financial need for undergraduate students for the 2003-04 academic year. Unmet financial need is cost of attendance less expected family contribution less all financial aid received (grants, loans, work-study and other financial aid).

For all undergraduates in the U.S. total unmet need was $31.9 billion.

• Sectors: public 4-year: $8.6 billion; public 2-year: $9.8 billion; private 4-year: $8.1 billion; private less than 4-year: $0.4 billion; proprietary: $5.1 billion
• Status: dependent: $15.0 billion; independent: $16.9 billion
• Income quartile: bottom: $17.3 billion; second: $10.3 billion; third: $4.3 billion; top: $0
• States: California: $4.6 billion; Connecticut: $0.5 billion; Georgia: $0.9 billion; Illinois: $1.3 billion; Indiana: $0.5 billion; Minnesota: $0.4 billion; Nebraska: $0.05 billion; New York: $2.8 billion

Unmet financial need appears to be growing. College costs are rising (rapidly), family incomes are stagnant, the Pell Grant has been flat for too long, and loan limits have been stuck at ancient levels during several reauthorizations of the Higher Education Act. Over the last 25 years the federal government has lost its way in financial aid, most states have stuck their heads in the sand over the issue, and far too many institutions have concluded that if the federal and state governments no longer care about college affordability that they don't have to either.

The predictable result of large and growing unmet financial need is that the financial barriers to higher education opportunity that financial aid was created to remove are now re-emerging. Student enrollment decisions of access, choice and completion are increasingly limited by these financial barriers to higher education. And so we see students from low and lower-middle income families increasingly concentrated in the lowest priced institutions--our community colleges, and students from the highest income families increasingly concentrated in our elite public and private colleges and universities. If this isn't class warfare then I don't know what is.

College Participation Rates for Low Income Students

We have just updated through 2003-04 our calculations of college participation rates for students from low income family backgrounds. This rate is the ratio of dependent Pell Grant recipients by state of residence to 4th to 9th graders approved for free or reduced-price school lunches nine years earlier. The time series of available data span the years 1992-93 through 2003-04.

For the U.S. college participation rate for students from low income families was 27.1 percent in 2003-04. This was up from 24.7 percent in 2002-03 and 22.2 percent in 2001-02. In fact the 2003 rate was the highest over this time span.

The states with the highest rates were: Iowa (43.7%), North Dakota (43.2%), Montana (38.1%), Utah (37.7%), Nebraska (27.1%) and Minnesota (34.5%). This list affirms my long held view that life is so boring here in the upper Midwest that going to school is the highlight of the day for most children. Focusing attention on school is certainly helped by the absence of ocean beaches, ski slopes and big cities--especially when the temperature outside is below freezing for a good part of the school year.

The states with the lowest college participation rates for students from low income families in 2003-04 are: Louisiana (13.0%), Alaska (13.5%), Mississippi (14.6%), District of Columbia (15.1%), Texas (16.1%), Tennessee (16.5%) and South Carolina (16.8%).

Women, Higher Education, Student Loans and Babies

A demographic fact of life is that women need to average 2.1 babies over their reproductive lifespans. If they have more the population grows, and if they have less the population declines and eventually reaches extinction.

Currently American women are averaging less than 1.9 children each. This is down from 3.1 in 1976 and 2.1 in 1990. More important the average number of children declines with increasing levels of education. According to data just released from the Census Bureau the average number of children born to women 40 to 44 years old at different levels of educational attainment is:
Not a high school graduate: 2.5
High school graduate: 1.9
College, no degree: 1.8
Associate degree: 1.9
Bachelor's degree: 1.7
Graduate/professional: 1.6

It is hardly in this country's long term interest to program itself for extinction. Yet we burden young college educated women--like men--with very large educational loan debt that must be repaid in the decade following college. These are exactly the same years when women who want children should be starting their families. Our public policy today is not to forgive women any part of their educational debt repayment obligation. We say in our loan repayment policies that it is more important to get a job and repay educational loans than it is to reproduce the species. This is nonsense. Society has a far greater interest in perpetuating itself than it does requiring women with educational loans to repay them instead of starting families.

What we need is an educational loan repayment policy that provides college educated women with a window for child bearing and rearing while they are young enough to do so. Perhaps the federal government could treat the first four years of a child's life as if the mother were still in college and not require education loan repayment for this period. Or perhaps the federal government could make the loan payments for the mother during this period. These costs are likely to be substantial (as they are today for in-school interest payments to lenders), but extinction is a more serious consequence for society.

The Most Exclusive Gated Communities of Higher Education

By every measure I can find students from low and lower-middle income families are a large and growing share of K-12 and higher education enrollments. They represent a growing of the future workforce, voters, citizens, taxpayers and parents. How well we higher educate them is largely determining our country's future. And parts of higher education are clearly trying to serve these students.

But not in the most exclusive Gated Communities of higher education. On these campuses students with Pell Grants represent very small and usually shrinking shares of undergraduate enrollments.

• Out of 534 public 4-year college and university campuses, the four with the worst representation of Pell Grant recipients among their undergraduate students were all public campuses in Virginia: College of William and Mary (8.3%), University of Virginia (8.4%), University of Mary Washington (9.5%) and James Madison University (9.9%). Four more public colleges and universities in Virginia made the bottom 50 institutions by this measure of class exclusivity.
  
• Out of 1239 private 4-year colleges and university campuses, the 2 with the smallest shares of Pell Grant recipients among their undergraduates were also in Virginia: Washington and Lee University (3.6%) and University of Richmond (6.3%). Another private college in Virginia made the bottom 50 by this class exclusivity measure.

Virginia had 11 colleges and universities on our list of the most exclusive Gated Communities of higher education for 2003-04 out of the worst 100. Other states near the bottom of our list were: Massachusetts with 10, Pennsylvania had 9, Connecticut had 7, North Carolina and Maryland had 6 each. The geographic concentration of these class-based higher education institutions in the mid-Atlantic and New England regions is duly noted. (For further reading see my previous post on Five Questions for Enrollment Management and the December issue of OPPORTUNITY.)

Five questions for Enrollment Management

I am deeply troubled by the short-sighted, self-interest focus on revenues and prestige reflected in the enrollment management decisions of many selective admissions 4-year colleges and universities, both private and public. The public interest has been seriously short-changed by these self-serving institutional decisions. Here are five questions for enrollment managers (and their college presidents) to ponder:

1. Should states continue to provide financial support to public institutions that enroll small or declining shares of students from low income/first generation and/or under-represented minority populations?
2. Should institutions that enroll small or declining shares of students from low income/first generation and/or under-represented minority populations be placed on probation for continued participation in federal Title IV student financial aid programs?
3. Should private institutions with substantial endowments that enroll small or declining shares of students from low income/first generation and/or under-represented minorities continue to receive tax exempt status?
4. Is college admission too important to be left to the colleges to decide themselves?
5. Is your institution a part of the problem or is your institution a part of the solution?