Aid and Access: How Federal, State, and Private Policies Matter
USW 31,November 26, 2012
Theda Skocpol
Source: Michael Hout, Berkeley.
US COLLEGE GRADUATION TREND
Canada Korea Japan New Zealand Ireland Norway France Belgium Australia United States Denmark0
10
20
30
40
50
60
56 56
54
47
44
43
41 41 41 40 40
53
40
46
41
34
36
29
36
34
42
34
45
21
41
39
25
31
20
28
32
40
30
39
11
24
35
17
26
17
22
27
39
24
Percent of Adults with Associates Degrees or Higher by Age Group, Lead-ing OECD Countries and the U.S. (2007)
25-34 35-44 45-54 55-64
Source: OECD Education at a Glance, 2009.
U.S. Baccalaureate Degrees by Age 24 by Family Income, 1970-2002
0% 10% 20% 30% 40% 50% 60%
Lowest family income
Lower-middle familyincome
Above-middle familyincome
Upper and upper-middlefamily income
Percent with BA degrees by age 24
2002
1970
Source: Mortensen, New England Regional Assembly of the College Board, 2005, p. 61.
Bottom 2nd 3rd Top0
10
20
30
40
50
60
70
80
Figure 2. Estimated Percentage of U.S. Population with 4-yr. College Degree by Age 24, by Family Income Quartile, 1980-2007
1980
2007
Source: Tom Mortensen, Postsecondary Educational Opportunity.
U.S. Higher Ed Policies: From Opportunity to Elite Subsidies
19th-early 20th c.: Morrill Land Grant college system established; federal subsidies to agricultural colleges
WWII and after: federal research programs spread capacities to many universities and fund faculty projects
1944: GI Bill offers tuition and subsistence allowances 1958: National Defense Education Act establishes low-interest
student loans 1965, 1972: Higher Ed Act and its reauthorization create need-
based grants, Work-Study Program, Pell Grants, and matching grants for states that offered need-based student grants
After mid-1970s: value of Pell Grants declines then stabilizes, as college tuitions skyrocket
1990sff: federal legislation subsidizes/guarantees bank-offered student loans regardless of need and offers tax credits/ incentives to middle-class borrowers
1990s: Justice Dept outlaws agreements to prevent escalating “merit” offers – unless institutions offer purely need-blind aid (which only the richest can do)
U.S. Higher Education Act of 1965/1972 through 2008:Intended and Unintended Consequences for Student Aid
HEA (‘65, ’72) emphasis on need-based student aid via Pell Grants; allows subsidized loans for some in middle class, but not tax
credits
Equal Opportunity Era, 1966-80 Liberal Dems and bipartisan consensus Sallie Mae created in 1978 to enlarge private loan pool; middle class
access to grants and loans broadened Pell Grants boosted in this period, retaining the emphasis on broader
opportunity
Divisions and Contradictory Directions, 1981-94 GOP gains power via Reagan, eventually Congress Student aid trimmed, Pell Grants underfunded and not regularly
increased, even as college tuition rises 145% from 1980 to 2002 (with median family income increasing only 23%)
Republicans still stress fiscal responsibility and limit subsidies to lenders
Private lending with federal guarantees becomes profitable, and private interests organize to lobby for better opportunities
By early 1990s, loans for the middle class are emphasized more than aid to needy
Aid to the Privileged Comes to the Fore, 1995-2007
Supported by more right-wing Republicans, subsidies and guarantees to private lenders become more lucrative
Supported by President Clinton, tax credits greatly benefitting the middle class and privileged are added to federal college aid.
Grants to needy continue to erode in value, while loans and tax credits allow more privileged students to afford the rising tuitions, especially at selective colleges
Students end up with high debt burdens when (if) they graduate
Undergraduate Student Aid by Source (in Billions), 2009-10
SOURCE: The College Board, Trends in Student Aid 2010, Figure 2A.
Source: College Board.
Percentage Distribution of Education Tax Credits, 2008 by Adjusted Gross Income (AGI)
(and Average Tax Savings per Recipient)
SOURCE: The College Board, Trends in Student Aid 2010, Figure 12A.
Percentage Distribution of Savings from Tuition Tax Deduction, 2008
by Adjusted Gross Income (AGI), (and Average Tax Savings per Recipient)
SOURCE: The College Board, Trends in Student Aid 2010, Figure 12B.
Ten-Year Trend in Student Aid and Nonfederal Loans per FTE Used to Finance Postsecondary Education Expenses
in Constant 2009 Dollars, 1999-2000 to 2009-10
SOURCE: The College Board, Trends in Student Aid 2010, Figure 1.
Percentage Distribution of Pell Grant Recipients
by Family Income and Dependency Status, 2008-09
SOURCE: The College Board, Trends in Student Aid 2010, Figure 14A.
Total Pell Expenditures (in Billions), Maximum and Average Pell Grant (Constant 2009 Dollars, in Thousands), and Number of Recipients (in Millions), 1976-77 to 2009-10
SOURCE: The College Board, Trends in Student Aid 2010, Figure 13A.
U.S. PELL GRANTS: Recipients and Expenditures, 1976-77 to 2009-10
0
5
10
15
20
25
30
1976
-77
1978
-79
1980
-81
1982
-83
1984
-85
1986
-87
1988
-89
1990
-91
1992
-93
1994
-95
1996
-97
1998
-99
2000
-01
2002
-03
2004
-05
2006
-07
2008
-09
2009
-10
Ex
pe
nd
itu
res
(b
illi
on
s o
f 2
00
9 d
oll
ars
)
0
1
2
3
4
5
6
7
8
9
Mil
lio
ns
of
stu
de
nt
rec
ipie
nts
Source: College Board from U.S. Dept. of Education
Ave. grant in 1976-77 = $2,862 (in 2009$)
Max grant = $5,280
Ave. grant 2009-10 = $3,646 (max $5,350)
Ave. grant 2008-09 = $2,909 (max $4,632)
Maximum Pell Grant as a Percentage of Tuition and Fees and Room and Board (TFRB),
1990-91 to 2010-11
SOURCE: The College Board, Trends in Student Aid 2010, Figure 13B.
Median Debt Levels of 2007-08 Bachelor’s Degree
Recipients Borrowed and Percentage with Debtby Dependency Status, Family Income, and Type of Institution
SOURCE: The College Board, Trends in Student Aid 2010, Figure 9.
Need-Based and Non-Need-Based State Aid Grants per Full-Time Equivalent (FTE) Undergraduate Student in Constant 2009 Dollars, 1969-70 to 2008-09
SOURCE: The College Board, Trends in Student Aid 2010, Figure 15.
Source: College Board.
State Grant Dollars per Full-Time In-State Undergraduate Student and Percentage Receiving State Grants, by
Dependency Status and Income, Selected States, 2007‑08
SOURCE: The College Board, Trends in Student Aid 2010, Figure 16.
Low-Income Undergraduates at Leading U.S. Universities, 1983-2006(percent receiving Pell Grants)
0% 5% 10% 15% 20% 25% 30% 35% 40%
U of North Carolina
U of Michigan
UCLA
UC Berkeley
Columbia
Cornell
Stanford
Princeton
Yale
Harvard
1983
1993
2004
2006
Source: Journal of Blacks in Higher Education 1/22/08
Harvard University Applications and Admission Rates
Classes admitted 2003 through 2011
0
5,000
10,000
15,000
20,000
25,000
30,000
35,000
40,000
1 2 3 4 5 6 7 8 9
Ap
pli
cati
on
s
0.0%
2.0%
4.0%
6.0%
8.0%
10.0%
12.0%
Pe
rcen
t a
ccep
ted
2007 2008 2009 2010 2011 2012 2013 2014 2015Class of:
Very generous financial aid, up to $180K per year
Obama Administration Higher Ed Policies
• Remove banks as middlemen with guaranteed profits from student loan programs, and use some of the savings to increase Pell Grants and improve loan terms.
• Expand and improve levels of Pell Grants. (Should we also make sure students know they have them?)
• Give more aid to community colleges – and strengthen their ties to area employers.
• Simplify information about college funding and make it available earlier in high school.
• Push colleges to limit tuition hikes, improve graduation rates, and make more information available.
Relevant SSN BriefsAvailable at <www.scholarsstrategynetwork.org>
• Suzanne Mettler,”How the GI Bill Built the Middle Class and Enhanced Democracy.”
• John Dorrer, “Why America Needs to Regulate Career Programs that Burden Taxpayers and Break Promises to Students.”
• Sara Goldrick-Rab, “Pell Grants are America’s Investment in Needy Yet Promising College Students – Why Not Tell Them?”
• John D. Skrentny, “Affirmative Action and Its Future.”