Even at Private Colleges, Low-Income Students Tend to Go to the Poorest Schools

There’s a widespread belief that private non-profit colleges don’t serve low-income students. That’s not
true. Many four-year private colleges enroll a substantial number of students from
economically-disadvantaged families. However, these schools tend to
be the private colleges least-equipped to serve these students well because
they have the fewest resources.

As data that Stanford University
economist Raj Chetty and his research team collected for their study on social mobility in
higher education make
clear, the private colleges that most low-income students go to do a poor job of helping them move up the economic ladder. In contrast, the ones that do the
best job of helping low-income students improve their economic fortunes serve very few of them.

According to the Chetty data, the private colleges that
serve the largest share of low-income students are non-selective, meaning that
they admit most students who apply. At those institutions, about a quarter of
students in the Class of 2013 came from families in the bottom 40 percent of
the income scale – those with annual incomes below $37,000. These students
slightly outnumbered their more-affluent peers who came from families in the
top income quintile (those earning more than $110,000 annually). The average
family income of students at non-selective private colleges was about $91,000,
while the median was just under $70,000. Less than 1 percent came from
extremely wealthy families.

Non-selective private colleges
tend to be the poorest, with minuscule endowments. These institutions have
a difficult time supporting the large numbers of low-income students they
enroll, both financially and academically. As a result, financially needy
students are less likely to remain and graduate from these schools than at
richer institutions. The Chetty data bear this out. The lowest income students
at private non-selective colleges have only a 7 percent chance of making it
into at least the upper-middle class by the time they reach their early 30s.

Low-income students’ chances of moving up the economic scale
significantly improve as they attend more-selective colleges. But the most
selective schools are the least likely to enroll these students.

For example, the lowest income students who attended the 12
Ivy-Plus universities have a 42 percent chance of making it into the upper
middle class or higher, and nearly a 10 percent chance of striking it rich and
becoming a one-percenter. However, only 9 percent of students in the Class of
2013 came from families in the bottom 40 percent of the income scale, and just
4 percent came from families making under $20,000 annually.

These institutions resemble
wealthy country clubs, with nearly two-thirds of the students coming from
families that are in the upper middle class or richer. The average family
income of students attending these institutions in the Class of 2013 was about
$723,000, and the median was $177,450.  More than half of the students
came from families in the top 10 percent, earning $144,000 or more, and nearly
one-fifth were from the top 1 percent with family incomes of at least $631,000.

Part of the reason that low-income
students attending Ivy Plus schools are six times more likely to achieve social
mobility than those at non-selective private colleges has to do with the
students themselves. Low-income students who are admitted to an Ivy Plus school
are academic stars who have defied the odds to make it into one the country’s
top colleges. Low-income students who attend non-selective colleges tend to be
much less academically accomplished. In addition, as my colleague Kim Dancy
pointed out in an earlier post in this series, Ivy League
schools and other elite private colleges “provide opportunities for networking
and name-brand schooling that nonselective institutions can’t afford their
students.”

But another big factor is money.
Low-income students generally can’t afford to go to a private college without
receiving significant amounts of financial aid from the federal government and
the school they wish to attend. Ivy Plus universities are extraordinarily rich
and generally can afford to meet the full financial need of the low-income
students they enroll. These universities, in other words, are able to provide
these students with essentially free rides (although these students often have
to deal with hidden costs they hadn’t anticipated). In
contrast, non-selective private colleges and those that are only minimally
selective are often cash-strapped and struggling to keep their doors open. They
tend to offer deep discounts to try to lure in affluent students who
can pay full freight, while leaving their low-income students with large
funding gaps. As a result, these financially needy students often have to take
on large debt loads and engage in activities that could stymie their
educational progress, like taking on full time jobs and/or attending part time.

In addition, because of their
fortunes, Ivy Plus schools are able to provide academic support services to
struggling students that these poorer schools can only dream about. In
addition, low-income students who take on full-time work probably don’t have
much time to take advantage of these types of services.

Much as they do in elementary and
secondary education, low-income students who pursue a higher education tend to
go the colleges with the least resources, be they community colleges, regional
state schools, or non-selective or barely-selective private colleges. No wonder
that the odds of moving up the economic ladder are so stacked against
them. 

This is the eighth post in
a series we are running about new, groundbreaking research that looks at how
effective different colleges are in providing social mobility to their
students. To see previous posts, click here.