Introduction

In its pursuit of higher-paying out-of-state students, the University of Maine’s flagship campus has taken to the highways. For the past several years, the university has placed billboards on turnpikes in many Northeastern states, as well as in California and Illinois, urging students to “GO TO UMAINE.”¹ The billboards promise that students from these states who qualify for admission will receive a scholarship that will allow them to attend Maine’s top public university at the in-state cost in tuition and fees of their state’s public flagship university.² The non-need-based scholarship program is a moneymaker for the university because the flagships in these states charge higher tuition and fees for in-state students than it does.³ In addition, these students will also have to pay the university the full price for non-tuition expenses, such as room and board, books, and food.⁴

The University of Maine’s aggressive out-of-state marketing campaign is in many ways a Hail Mary pass. The Orono campus, like many other public colleges and universities in the state, has been struggling for nearly a decade. In response to the national financial crisis, the state of Maine slashed spending on higher education, leaving the university in dire straits, with a $75 million budget deficit.⁵ Even worse, the state, which has the oldest population in the country, is graduating fewer and fewer high school students. A sharp drop in the birth rate in the state has some experts predicting that the number of potential college-goers will drop by nearly a quarter by 2029.⁶

“There had been red ink before,” James Page, chancellor of the University of Maine system, told The Chronicle of Higher Education in February. “But there was always a sense that there was some cycle to it, and then you’d come back and make it up. And it became clear that wasn’t going to happen.⁷

“Past levels of state support weren’t likely to come back, and, more worrisome, neither were past levels of enrollment.”

The University of Maine introduced its “Flagship Match” program during the 2015–16 academic year. In the years since, the university has nearly tripled the amount of money it spends on financial aid for students without financial need (more popularly, if often inaccurately, known as “merit aid”) and doubled the share of non-needy freshmen who receive it, from about 15 to 29 percent.⁸ The university’s generosity to well-to-do out-of-state students has paid off. The proportion of students from other states has nearly doubled over the past two years, to 36 percent of the student body.⁹

But the school’s generosity to affluent students has come at the expense of students from Maine who can’t afford to attend without the school’s help. Low-income students were already paying a high average net price — the amount of money that students and their families have to pay after all grant and scholarship aid is deducted from the listed price—of $12,638 when the program started. Since then, the university has significantly reduced the share of financial need it covers, leaving low- and moderate-income students with a larger gap to fill to meet their costs.¹⁰ As a result, the average net price that the lowest-income freshmen must pay is on the rise.¹¹

The school’s generosity to affluent students has come at the expense of students from Maine who can’t afford to attend without the school’s help.

Regrettably, the shift in the way that the University of Maine spends its institutional aid dollars is becoming increasingly common at four-year public universities across the country. These schools are increasingly using their limited financial aid budgets to compete fiercely for the students they most desire – the best and brightest and those wealthy enough to pay full freight (or close to it) – rather than for meeting students’ financial need. Low-income students are paying a high price for these policies.

This report examines U.S. Department of Education data showing the average net price for students from families that annually make $30,000 or less at 584 four-year public colleges and universities in the 2015–16 academic year. The analysis finds that more than half of these state-supported institutions (52 percent) expect the neediest freshmen to pay over $10,000, an amount that equals more than a third of their families’ yearly earnings. About 8 percent expect these students and their families to pay more than $15,000.

This report follows up on three previous papers that New America has published that examined the net price data for the 2010–11¹², 2011–12¹³, and 2013–14¹⁴ academic years. In each of these publications, the share of public institutions charging low-income students an average net price over $10,000 has grown.

In our previous volumes, we examined average net price data at both public and private nonprofit four-year colleges. This report, however, focuses exclusively on public institutions. We left out private colleges in this volume because there hasn’t been much change in the results in this sector year after year. Since the 2011–12 report, the share of private colleges charging freshmen with family incomes of $30,000 or less an average net price over $10,000 has remained strikingly high to the detriment of low-income students at around 94 to 95 percent.¹⁵

While there is some variation in terms of which private colleges are charging freshmen the highest and lowest average net prices, the overall results have been consistent. Overall, the vast majority of private colleges, which have provided affluent students with hefty amounts of non-need-based aid for decades, are leaving low-income students with extremely high amounts of unmet need, requiring them either to borrow high-interest private loans or have their parents take on large federal Parent PLUS loans to attend them.¹⁶ The exception to this rule are some of the country's most elite private liberal arts colleges and universities, like Harvard and Amherst, which are rich enough to fill the full financial need of the high-achieving, low-income students they enroll.¹⁷

In contrast to private colleges, the share of public colleges and universities charging the lowest-income, in-state freshmen an average net price over $10,000 has steadily grown with each report. In 2010–11, only about a third (34 percent) of public institutions examined charged these students that much. That share increased to 39 percent in 2011–12 and jumped to 47 percent by 2013–14. And now for the first time, more than half are. Meanwhile, nearly three-quarters of these schools charged the lowest-income students a higher average net price in 2015–16 than in 2010–11, even after adjusting for inflation.

The vast majority of private colleges are leaving low-income students with extremely high amounts of unmet need.

Our finding that public four-year schools are generally becoming less affordable for low-income students is consistent with a separate analysis we conducted last year in which we found that the majority of these institutions have also become less accessible.¹⁸ Using data from the Equality of Opportunity Project,¹⁹ we found that nearly two-thirds of selective public universities have reduced the share of students they enroll from families in the bottom 40 percent of the income scale since the late 1990s. At the same time, these schools increased the share of students they enroll from the top 20 percent.²⁰

Most notably, at more than half of public institutions (54 percent), the increase in affluent students came at the direct expense of low-income ones. In other words, these schools increased the share of students in the top 20 percent at the same time that they reduced the share from the bottom 40 percent.²¹

That our public higher education system is increasingly becoming less accessible and affordable for low-income students flies in the face of national goals to increase access to higher education and help more students earn high-quality degrees. Fifty years ago, the federal government committed itself to removing the financial barriers that prevent low-income students from enrolling in and completing college. Policymakers have sought to achieve this goal primarily through the Pell Grant program, which spent about $27 billion in the 2016–17 academic year to help more than 7 million financially needy students pay for college.²²

For years, public universities and state colleges complemented the government’s efforts by providing a low-cost education to students in their home states. In so doing, these schools offered students from low-income and moderate-income families a gateway to the middle class. But those days are fading away.²³

Over the last 20 years, state disinvestment and institutional status-seeking have worked together, hand in hand, to encourage public colleges and universities to adopt the enrollment management tactics of their private college counterparts. For many of these schools, that has meant using their institutional aid dollars strategically in order to lure affluent out-of-state students to their campuses, rather than spend these funds on in-state students who can’t afford to go to college without the help.²⁴

Overall, too many public colleges and universities are failing to help the government achieve its national college access goals. They are, instead, adding hurdles that could stymie the educational progress of needy students or leave these students with substantial debt after they graduate.

The doors of too many public universities and state colleges are closing to low-income and working class students. It’s time for federal and state policymakers to take notice and work together to reverse these troubling trends before it is too late.