The Dire Harms of Economic Segregation in Higher Education

Education, which is supposed to be, as Horace Mann famously declared, the “great equalizer” in America, has become a system for perpetuating privilege, according to a remarkable new report, Indicators of Higher Education Equity in the United States. This devastating analysis, published by the Pell Institute for the Study of Higher Education and the Alliance for Higher Education and Democracy at the University of Pennsylvania, depicts a system that remains economically and racially segregated and highly unequal. (Disclosure: I sit on the advisory board of the Pell Institute).

This segregation—in which low-income students are funneled into poorly resourced community colleges and wealthy students into amply funded selective four-year colleges—matters a great deal to the life prospects of young people. Researchers have established that one of the most likely paths to social mobility for a low-income student is to attend a selective four-year college. Raj Chetty, of Stanford University, and his colleagues found that low-income students who attend elite colleges have a greater than 50 percent chance of rising into the top income quintile as adults.

But selective colleges only admit a tiny number of low-income students—and, despite a lot of rhetoric and a slew of press releases, the numbers have barely budged in recent years. The percentage of low-income college students eligible for Pell grants in American higher education broadly increased from 32 percent in 2001 to 45 percent in 2014–15, but in a roughly comparable period, the percentage of students at the most selective colleges eligible for Pell hardly moved (from 15 percent to 16 percent).[1]

Meanwhile, the student populations at community colleges have grown poorer over time, according to a series of large-scale federal studies conducted over the course of three decades. In 1972, 29 percent of public community college students came from the wealthiest quarter of the socioeconomic distribution. By 2004, that proportion dropped to 18 percent.[2] The flight of upper-income students is bad news for other students in community colleges because it can mean a reduction of political capital when two-year institutions fight for their fair share of resources.

The 2018 Indicators report also contains a plethora of data on who enrolls in college, an issue that is increasingly marked not just by racial divides but growing class differences. Race is far more visible to the naked eye than class, and civil rights groups appropriately shine light on opportunity gaps. But the new report suggests class often matters more. In 2016, there was a fifteen-point gap between the percentage of white and black high school leavers who enrolled in college immediately after high school (66 percent vs. 51 percent).[3] By contrast, there was a forty-three-point gap between the percent of high-income and low-income African American high school leavers who did so (85 percent vs. 42 percent).[4]

What explains these enormous income gaps? One explanation may involve the inability of the Pell Grant to keep up with the rising costs of college. The report finds: “In constant dollars in 1980 the maximum Federal Pell Grant covered 68 percent of average college costs. In 2016-17, the maximum Federal Pell Grant covered 25 percent of average college costs.” What would it take for Pell to cover two-thirds of average college costs today as it did three decades ago? “In 2016-17, the maximum Federal Pell Grant would have been $15,471 rather than $5,815,” the report finds.

This disparity, and myriad other developments outlined in this disturbing report—the decline in state commitment to financing higher education, the growing wealth and income gaps in the larger society—add up to one deeply sobering bottom line. According to data from the Educational Longitudinal Study, high school students from low-income families are four times less likely to earn a bachelor’s degree within eight years of their scheduled high school graduation as students from high-income families (60 percent compared with 15 percent).[5]

More than 60 years ago, the U.S. Supreme Court recognized that separate institutions for Blacks and whites were inherently unequal; and today we know the same is true for rich and poor, in K–12 schooling and higher education. To remedy this inequality, we need new policies that provide incentives for selective colleges to enroll and graduate more low-income students, and we need to provide ways to attract more upper-income students to high-quality community colleges.

Higher education considers itself to be among the most enlightened segments in American society, but until it begins to tear down the steep walls erected between rich and poor, it will just remain a contributor to the death of the American Dream for millions of young people.

Editor’s note: a version of this commentary was published by The Century Foundation.

[1] Cahalan, M., Perna, L.W., Yamashita, M., Wright, J., & Santillan, S. (2018, May). Indicators of higher education equity in the United States: An historic trend report. Washington, DC:  The Pell Institute of the Council for Opportunity in Education and the Alliance for Higher Education and Democracy, pages 18 and 63.

[2] Indicators of higher education equity in the United States, page 61.

[3] Indicators of higher education equity in the United States, page 36.

[4] Indicators of higher education equity in the United States, page 37.

[5] Indicators of higher education equity in the United States, page 102.