“These actions fly in the face of national goals to increase access to higher education and help more students earn high-quality degrees,” Stephen Burd, a senior policy analyst at New America, wrote in the report. “For years, colleges complemented the government’s efforts by using their financial aid resources to open their doors to the neediest students. But those days appear to be in the past.”
Burd examined government data on the average net price — what students pay after factoring in scholarships and grants — students from low-income families paid at more than 1,400 four-year colleges in the 2013-2014 academic year. He found the financial hurdles are the highest at private nonprofit colleges. Seventy-two percent of those schools charged an average net price over $15,000 to the lowest-income students, while 30 percent charged more than $20,000.
A good number of private colleges have small endowments and cannot afford the level of financial support low-income students need. Yet many schools still manage to find money to offer merit-based scholarships to wealthier students, with the assumption that a little aid might entice families that can afford to pay the balance.
Still, the worst offenders are the universities with the means to keep costs low for the needy students they admit but choose not to do so, the study said. Burd found 102 schools with endowments of more than $250 million that still charged students with the greatest need over $10,000. Tulane University, a school with a $1.2 billion endowment, expected poor students to pay $29,089 a year after grants and scholarships. Needy students at American University in the District, meanwhile, were left with an average $28,524 bill in the 2013-2014 academic year.
To be sure, there are wealthy private schools, including Columbia University, Grinnell College and Amherst College, using their considerable endowments to make sure needy students pay less than $10,000 to attend, the report said. Even schools with modest means, like Our Lady of Holy Cross College in Louisiana or Baptist Memorial College of Health Sciences in New York, are managing to keep costs down for students with the greatest need.
Burd also found dozens of private colleges that enroll a relatively small share of low-income students but offer them generous support. While only 10 percent of students at Washington and Lee University were needy enough to qualify for federal Pell grants, those students pay no more than an average $353 a year to attend the school in Lexington, Va. At Georgetown University, the 13 percent of its students who were Pell eligible in 2013-2014 paid no more than $9,638 a year on average.
On the other hand, the 13 percent of needy students Johns Hopkins University enrolled that year were expected to pay an average $10,049 to attend. Catholic University in the District eclipsed that number by asking low-income students to pay $29,820.
“Many of these colleges use merit aid as part of a broader strategy to build their prestige and raise their rankings,” Burd wrote in the report. “And while many of the institutions strive to compete with the most-elite institutions for top students, their endowments, while substantial, tend to pale in comparison. As a result, these institutions often have to rely heavily on tuition dollars to finance their operations, giving them a significant incentive to use their institutional aid to attract full-pay students as well.”
While needy students have a lower chance of facing five-figure funding gaps at public universities and colleges, the practice is escalating as state schools adopt the same enrollment tactics as private universities, using merit-based aid to draw wealthy students. State budget cuts have squeezed public colleges, which have in turn have raised tuition or gone after out-of-state students with merit aid to offset the loss of funding.
Nearly half of the 591 public four-year colleges Burd examined now leave the most vulnerable students on the hook for more than $10,000 a year, whereas only a third of those institutions did the same thing in the 2010-2011 academic year.
As much as budget cuts have hurt a large share of public universities, there are schools that have the financial wherewithal to support lower-income students but still leave them on the hook for tens of thousands of dollars. Low-income students at the University of Pittsburgh, for instance, pay a net price of $21,233 a year, while the same population at Pennsylvania State University is asked to find $20,010 to cover a year of their education.
Other public universities simply admit very few low-income students. The College of William & Mary, where Pell eligible students make up only 12 percent of the population, is the least socioeconomically diverse public college in the country, but it only charges those students $5,136 on average. The University of Virginia is slightly better, with 13 percent of its students receiving Pell, according to the report. The University of Maryland at College Park, however, counts 20 percent of its student body as lower income and keeps their tab under $7,000 on average.
New America would like the federal government to reward schools that go out of their way to serve low-income students with more money to keep costs down for them, and require schools that neglect that population to match at least a share of the Pell dollars they receive.
“The retrenchment in colleges’ commitment to helping low-income students has barely registered in Washington,” Burd wrote. “Federal officials appear to be operating under the assumption that colleges are continuing to complement the government’s efforts, rather than increasingly undermining them. The time has come for policymakers to take notice.”
Want to learn more about the cost of college? Check out these stories: