Class War: Higher Education

Today in class war, Jordan Weissmen for Atlantic Wire has an article on how colleges are charging low-income students more than their wealthy peers. Take a minute for that to ruminate.

The article begins with a fun fact that reads: “If the federal government were to take all of the money it pours into various forms of financial aid each year, it could go ahead and make tuition free, or close to it, for every student at every public college in the country.”

#IHateEverything.

Anyway, back to the article. Weissmen began his article this way because wanted to remind everyone of an article he previously wrote about the money subsidizing expensive tuition at dubious private institutions. He had singled out the for-profit college industry (as many of you know I hate them), which devours federal aid dollars, while charging poor students obscene prices. Weissmen then apologizes to the University of Phoenix and its elk because, wait for it, plenty of non-profit colleges are sucking the system dry too! I’d like to state again, #IHateEverything.

Stephen Burd of the New America Foundation released a report on the state of financial aid in higher education. It shows how the poorest undergrads are asked to pay obscene costs while the same institutions lavish discounts on the children of wealthy families to lure them to campus. It happens at hundreds of institutions. Burd argues that many colleges are playing an “elaborate shell game” relying on federal funds to cover the costs of poor students while using their own funds to provide aid to wealthier undergrads. Burd wrote, “With their relentless pursuit of prestige and revenue, the nation’s public and private four-year colleges and universities are in danger of shutting down what has long been a pathway to the middle class for low-income and working-class students.”

You don’t say. Burd’s paper doesn’t indict the whole higher education establishment, just most of it. The worst offenders are the small, private colleges with meager financial resources, or public schools concentrated in a handful of states like Ohio, Pennsylvania, and South Carolina, which have moved to the “high tuition, high aid” model. The theory is that when state budgets tighten, you can charge wealthy students more and then charge poor students reasonably. Shockingly, this hasn’t worked out well. Burd explains now, it is more common for colleges to hand out aid packages based on “merit” rather than financial need. Anyone know what “merit” is? It is a fluid concept we use to set people apart.

Sometimes, colleges are just competing to outbid each other for star students, but there are economic incentives at play as well. Burd writes, “After all, it’s more profitable for schools to provide four scholarships of $5,000 each to induce affluent students who will be able to pay the balance than it is to provide a single $20,000 grant to one low-income student.”

Burd’s study notes, according to the Department of Education’s more recent study, that 19% of undergrads at four-year colleges received merit aid despite scoring under 700 on the SAT. WTF.

Full disclosure, I received merit aid and aid because I was low-income/working class, but my merit aid increased overtime when I stayed in school and my GPA continued to improve year after year. Additionally, I was sixth in my high school class (a college prep school), and while my SAT score wasn’t great it was about 1300 (this was before they had a writing portion). Cleveland had a scholarship program for low-income residents. They provide you a small amount of aid the first year, and it increases every year you stay in school and your GPA goes up. Eventually, they gave me $10,000 for my final semester (I graduated early to save money). I paid about $500 that semester out of pocket, which by the way was hard to come by. I also have undergraduate loans, which suck. They are nothing compared to my graduate loans with their shitty interest rate, but I’ll be paying all of these for a long time. Twenty years of loan debt is the price of attempting to class jump.

Weissmen notes there isn’t anything wrong with providing tuition breaks to the middle class or the rich, but the problem is that is happening at the expense of the poor. At 89% of the 479 private colleges Burd examined, students from families earning less than $30,000 a year were charged an average of more than $10,000 (this was the “net price” being the full annual cost of attendance minus all the institutional and government aid). It is what a student can expect to pay. At 60% of the private colleges the net price was more than $15,000. So, poor students are asked for more than half of their family income to send them to a private college for a year. This is why my sister dropped out. CSU told her our parents could pay her tuition if they pulled my other sister and me out of school. Obviously, my parents weren’t willing to do that given the state of Cleveland public schools. Additionally, the message it would have sent us as younger siblings. Finally, that wasn’t the deal, our parents paid for private school, we’re on our own for college.

Many of these institutions enrolled large numbers of poor students, with the federal money. Burd noted 287 private colleges where more than one quarter of the student body received federal Pell Grants, which go to low-income and working class families. Weissmen pulls a list from The New York Times which shoes many of the “high-Pell, high-net-price” schools provide generous amounts of merit aid to undergrads. He noted three:

• “At Georgia’s Berry College, 30 percent of students receive Pell Grants, and low-income students pay an average net price of $16,174. Yet 25 percent of its freshmen also receive merit aid, averaging more than $10,000 apiece.
• “At Wabash College in Indiana, 28 percent of students receive Pell Grants, and low-income students pay an average of $15,480. Yet 12 percent of its freshmen get merit aid, averaging $15,393 each.
• “At Case Western Reserve [Ohio!], one of the better known institutions among the high-Pell, high-net-price schools, 23 percent of students receive Pell Grants grants, and low-income undergrads pay $18,381 on average. And yet 19 percent of freshmen also receive merit aid, averaging $18,359 each.”

So schools taking government funds to make college accessible for low-income students, but they are still getting charged extravagantly. While they hand out aid to wealthier students because of high test scores (racist, sexist, classist, etc. test scores) or extra revenue. Weissmen does not that it is possible that these institutions are charging their low-income students less than the data suggests because the net-price takes room and board into account, but a survey by Sallie Mae suggests 40% of four-year private college students live at home. The data suggests that many institutions are undercutting the intent of the Pell program, if not abusing it outright. This problem appears to be less severe at public colleges. About three-quarters of the state schools Burd examines showed low0income students paid a net price of under $10,000. Half of those where they paid more were in eight states where experiments with “high tuition, high aid” model ran wild.

So let’s get Sen. Warren’s plan through for education debt, and then pass education reform that result in free higher education. That way we can just shut this shit-show down.