College gap fosters inequality

“Our nation is moving toward two societies, one black, one white — separate and unequal,” the National Advisory Commission on Civil Disorders, better known as the Kerner Commission, said in a report that made headlines in 1968. A report today could say we are moving toward two unequal societies based on family income — one college-educated, one not.

College graduation rates in the U.S. differ dramatically by income. A 2014 White House report gives this disturbing statistic, “While half of all people from high-income families have a bachelor’s degree by age 25, just 1 in 10 people from low-income families do.”

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This huge college graduation gap perpetuates poverty from one generation to the next. Another White House report issued in July says that a person with bachelor’s degree typically can expect to earn $1 million more than a high school graduate over the course of his or her working life.

As a result, the income and inequality gap between the college-educated and other Americans is growing. There has been an increasing concentration of assets in the hands of the wealthy, and intergenerational income mobility has reached a new low point.

According to a 2014 study by the National Bureau of Economic Research the share of wealth held by the richest one-tenth of 1 percent of Americans more than tripled from 7 percent in 1979 to an astounding 22 percent in 2012. Put another way, the study found that the wealthiest one-tenth of 1 percent of U.S. families owned nearly as much as the bottom 90 percent of families.

 When it comes to students enrolled at highly selective colleges and universities, which can be a springboard to high-level and high-earning jobs, the gap between income groups is enormous.

A study this year by the Jack Kent Cooke Foundation, which I head, revealed that at elite colleges students from families with the lowest 25 percent of incomes make up a mere 3 percent of enrollment. In contrast, students from families with the highest 25 percent of incomes account for 72 percent of the enrollment at these colleges.

State colleges have also played a role in expanding the higher education divide. The average cost of attending an in-state public college rose by more than 40 percent in the past decade after adjusting for inflation. State colleges have been forced to raise tuition because state legislatures across the nation have drastically reduced their support for all forms of higher education.

According to a study by the American Academy of Arts & Sciences: “Between 2008 and 2013, states cut appropriation support by more than 20 percent per full-time equivalent student in the median public institution, and cut support to the median public research university by more than 26 percent.”

We have arrived at this sorry state largely because colleges are focusing more on attracting the wealthy than the strivers. In fact, only roughly 100 colleges out of approximately 4,200 higher education institutions nationally — less than 3 percent — are “need-blind,” meaning they don’t consider a student’s ability to pay when making admissions decisions.

A particularly harmful practice is when colleges award so-called “merit aid” to well-to-do students in order to induce them to enroll. This reduces the overall amount of financial aid available to genuinely low-income students and directs more aid to the affluent.

Some colleges buck the trend and are working effectively to give academically qualified low-income students the equal educational opportunity they deserve. 

Last year my foundation gave Vassar College the $1 million Cooke Prize for Equity in Educational Excellence for its extraordinary efforts to find, educate and graduate outstanding low-income students. Currently almost a quarter of Vassar students are eligible for Pell Grants, the federal government’s annual stipend of up to $5,815 for low-income students.

This year we gave the Cooke Prize to Amherst College for its extraordinary efforts in accommodating low-income students. The other finalists that distinguished themselves included Davidson College, Pomona College, Rice University and Stanford University. All these schools have shown a strong commitment and demonstrated innovative strategies in assisting and graduating outstanding low-income students. Their actions should inspire others. 

Unfortunately, the vast majority of colleges do not do enough for students with big minds and small wallets. If colleges are to continue receiving tax-exempt status, they need to earn it by admitting many more smart and talented low-income students. If they do not, higher education-inspired social mobility will be headed for near extinction.

American educator Horace Mann said in 1848, “Education then, beyond all other devices of human origin, is a great equalizer of the conditions of men – the balance wheel of the social machinery." This remains true today. If we want America to be one society, united and equal, colleges need to admit more students based on academic merit instead of parental money. And colleges, government and others need to provide the financial aid to make this possible.

Former New York City Schools Chancellor, Harold O. Levy is executive director of the Jack Kent Cooke Foundation, which has awarded about $147 million in scholarships to more than 2,000 high-achieving students from low-income families and $90 million in grants to organizations that serve such students.


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