Balance of Financial Aid from Public Universities Tilts Away from Low-Income Students

Friday, September 13, 2013

Public colleges and universities used to be a reliable and affordable option for low-income students to receive a four-year degree. But these institutions have increasingly shifted their financial aid resources to wealthier students, leaving poorer students without the assistance they need to attend these schools.


This disturbing trend began in the mid-1990s.


In 1996, 34% of public college grants went to low-income students, while only 16% was given to higher-income students, according to data from the U.S. Department of Education analyzed by ProPublica.


By 2012, low-income students were still receiving a larger percentage of grants than wealthier students, but just barely. That’s because the share of aid going to poorer students had declined to 25%, while the portion going to higher income students rose to 23%.


“The most needy students are getting squeezed out,” Charles Reed, a former chancellor of the California State University system and of the State University System of Florida, told ProPublica. “Need-based aid is extremely important to these students and their parents.”


Not surprisingly, public colleges and universities are now educating fewer low-income students, according to an analysis of Pell-grant data by Tom Mortenson, a senior scholar at the nonprofit Pell Institute.


These students have had to turn to community colleges and for-profit universities for their higher education goals.


Public colleges defend their increased focus on more financially able students by arguing that it will leave them with more funds to support the needy ones.


“I don’t think that’s really the motivating factor,” Michigan State University’s College of Education dean Donald Heller told ProPublica. “The more dominant motivating behavior is interest in high-achieving students, which will help them with institutional prestige.”


One financial aid industry consultant concurred, telling ProPublica: “When public [universities] come to us individually now, they won’t admit it, but they’re all looking for the same thing—smart students who can pay.”

-Noel Brinkerhoff


To Learn More:

Public Universities Ramp Up Aid for the Wealthy, Leaving the Poor Behind (by Marian Wang, ProPublica)

Good Students from Low-Income Families Less Likely to go to Top Colleges (by Matt Bewig, AllGov)      

Student Financial Aid Sending More Money to Wealthy Families (by Noel Brinkerhoff, AllGov)


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