Poorer families bearing brunt of college price hikes, data shows

By Holly K. Hacker and Jon Marcus, Dallas News

America’s colleges and universities are quietly shifting the burden of tuition increases onto low-income students. Yet many wealthy families are seeing their costs rise more slowly, or even fall, an analysis of federal data shows.

The trend could further widen the gap between the nation’s rich and poor, say financial aid experts and a growing number of university leaders. They worry about college degrees drifting beyond the economic reach of many students.

“We’re just exacerbating the income inequalities and educational achievement gaps,” said Deborah Santiago, vice president of Excelencia in Education, a nonprofit group that advocates for Latino and other students.

The shift runs contrary to an Obama administration push to make college more affordable for the less affluent.

Low-income students still pay less on average than wealthy students. Yet they’re expected to devote a greater share of their annual income to college costs. And the costs for low-income students are rising more quickly, based on an analysis of federal education data by The Dallas Morning News, The Hechinger Report and the Education Writers Association.

The analysis focused on net price: the total annual cost of tuition, fees, books, room and board, and other expenses, minus grants and scholarships from government sources or the institution.

Families pay for net cost through a mix of loans, outside scholarships, work and other means.

To help families explore the real cost of college, The News and its partners created an online tool called Tuition Tracker, at www.tuitiontracker.org.

The data covers the 2008-09 through 2011-12 school years.

At private universities, students in the lowest income group saw the biggest increase in average net price — from $16,300 in 2008-09 to $18,000 in 2011-12. That’s a jump of $1,700 in inflation-adjusted dollars.

Higher-income students paid more. But their average costs, adjusted for inflation, rose just about $800 for middle-income students (from $20,700 to $21,500) and $1,200 for top-income ones (from $30,500 to $31,700).

At the nation’s public four-year universities, students in the top income group saw the biggest dollar increases in average cost — about $2,000 after adjusting for inflation (from $17,600 in 2008-09 to $19,600 in 2011-12).

The dollar increase for the poorest students was smaller — about $1,400 (from $8,100 to $9,500). But as a percentage, it was the biggest jump.

In several states — Arizona, Connecticut, Delaware, Illinois, North Carolina, Ohio, South Carolina and Vermont — the poorest students saw the biggest hikes in both the average dollar increase and percentage increase.

Texas’ public universities, on the other hand, saw much smaller increases for low-income students compared with the national average.

Experts note that as tuition spirals ever higher, even wealthier families need help paying for it, making the situation far more complex.

At Austin College, a private liberal arts college in Sherman, the challenge is to make it affordable for students of varying means, while staying financially stable.

“We have to bring in enough revenue that we can keep the college open. Otherwise we wouldn’t be able to provide an education to anybody,” president Marjorie Hass said.

She added, “It’s equally important to make sure the children that fall in that vast swath in the middle are also able to access a high-quality education.”

Wealthier students still pay more for college on average. But colleges give them discounts that, according to critics, should go to lower-income classmates.

Channeling aid

Many colleges want to attract higher-income students to bolster enrollment and draw revenue. And since richer students tend to come from high schools with more resources, they have test scores and grade-point averages that make the colleges look better in annual rankings.

“Schools are talking out of both sides of their mouths. They say that they support access, but in general they’re giving more and more of their aid to higher-income students,” said Stephen Burd, a senior policy analyst at the nonprofit, nonpartisan New America Foundation.

Burd calls the practice “affirmative action for the rich.”

A Department of Education study found that public and private colleges are directing more of their financial aid toward middle- and high-income students, and less toward students whose families earn less than $30,000.

Colleges do this because dividing even a little money among several wealthy students means their families will pay the rest — filling more seats and bringing in needed revenue. Giving that same amount to a single poor student is a loss to the bottom line.

“As any rational actor, they’re making decisions in their own self-interest, but those are not necessarily in the public interest,” said Laura Perna, an education professor at the University of Pennsylvania and a national expert on higher-education finance.

Financial aid officials say wealthy families have learned to pit institutions against each other to negotiate for more discounts. That could be because, in part, they face their own financial pressures, experts note.

“If you’re making $120,000 a year and you’ve got a couple of kids, you do have financial need, so it becomes much more complicated,” said Sandy Baum, an economist and College Board consultant who tracks financial aid trends.

Baum said too many advocates for poor students ignore problems facing working-class kids.

“We shouldn’t have to pick between people from $30,000 families and people from $60,000 families,” she said. “They all need help.”

Real price

There are limitations with the federal data. Most notably, it takes into account only full-time, beginning students who received federal financial aid. As such, the data is more representative of lower-income families. Students who don’t apply for federal loans or other aid, and whose families pay full price, aren’t included.

Still, the data offers the most comprehensive look over time at what students have paid.

The biggest spikes in net price for poor students were at private research universities, a group that includes many of the nation’s most elite schools. Many of these schools charged high prices to begin with.

At Hofstra University in New York, the net price for low-income students rose from $24,800 in 2008-09 to $26,800 in 2011-12. The price rose for middle-income kids, too, though not by as much.

Hofstra’s high-income students saw their net price fall from $32,800 to $31,600.

Advocates for low-income students say it’s unfair to expect poor kids to pay almost as much as their wealthier classmates.

But Hofstra, as with several other private universities, said it awards merit-based aid to raise its academic standing.

“As an institution with a rising academic reputation and building selectivity, we do use merit strategies to employ scholarship dollars,” said Melissa Connolly, a Hofstra spokeswoman.

Washington and Lee University in Virginia nearly quadrupled its net price for the poorest students — from about $3,800 to $13,700 — while lowering it for the richest. Spokesman Jeffery Hanna said it has started a program to give free tuition to students from families with incomes under $75,000 and is trying to raise $160 million for financial aid.

“What can be frustrating is having to defend our commitment to access for low-income students at precisely the time when we are working harder and harder to make it possible for any qualified student to attend, regardless of their family’s ability to pay,” Hanna said.

Public universities

As states have cut spending on higher education, public universities have raised tuition to make up the difference. In some cases, those increases have fallen disproportionately on low-income students.

At North Carolina’s public universities, the average net price for poor students surged by more than $3,000, from about $3,700 in 2008-09 to nearly $7,000 in 2011-12. No other group of students saw such a big jump. Some advocates worry that the state’s tradition of college affordability is eroding.

In Arizona, spiraling costs are evident at the biggest public school, Arizona State in Tempe. Students in the bottom income group saw a much bigger jump in net price ($4,400) than those in the middle and top income groups ($2,400).

But as some states and individual campuses show, it doesn’t have to be that way.

In California, where state funding for higher education has been deeply cut, the wealthiest students are being asked to shoulder the lion’s share of the net price hikes — an average increase of $3,500. The poorest students, by contrast, saw their net price go up by less than $1,000.

Several Texas public universities had among the nation’s smallest net prices for lower-income students.

Nick Mills, a junior at the University of North Texas in Denton, said he has to pay only about $1,000 out of pocket to attend.

He and his twin brother, Drew, received Emerald Eagle scholarships from UNT. They cover tuition and fees for students who are academically motivated and whose families earn less than $40,000. The twin brothers also received state and federal grants.

Mills, a graduate of McKinney High School, said searching for colleges and figuring out how to pay for them was daunting. “I didn’t know what I wanted to major in. I didn’t know anything about loans or grants,” he said. He said his mother learned about UNT’s scholarships while researching colleges on the Internet.

For Nick, UNT ended up being the most affordable option — and it had one of the top programs for his major, applied behavior analysis. Drew received a $30,000 scholarship from Baylor University, but UNT was cheaper for him, too.

Nick said his younger brother, a senior at McKinney High, wants to attend UNT, too.

Nor are all private universities going in the same direction. Several are raising money to endow financial aid for low-income students, for example.

“The people who make important contributions to the world are not all coming from well-to-do families,” said Mark Wrighton, chancellor of Washington University in St. Louis. The school brought down net price for low-income students — though it still has a relatively small share of them — from $18,500 to $6,600 over the years of the analysis.

“The country has a growing income gap,” said Wrighton, who was the first in his family to go to college. “We need to turn that tide.”

Jon Marcus is higher-education editor at The Hechinger Report, a nonprofit news organization that focuses on education journalism.

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