Exploring the Real Price of College

by Heather L. Fox / May 10, 2016

Would lowering the price of college support higher levels of college attainment for low-income students?

The connection between the price of college and access to degrees is hard to overstate. For low-income populations the price can act as both a gatekeeper providing access to educational opportunity for students who would otherwise not be able to afford it and a critical support of low-income students’ efforts to reach their educational goals (Graham & McCambly, 2015). Financial aid is currently the main mechanism used to reduce the price of college. Two challenges faced by community colleges in regards to financial aid are that as many as 44% of their students do not (or cannot) complete a Free Application for Federal Students Aid (FAFSA) and as a result are ineligible for financial aid, and that of the students who do complete a FAFSA most are faced with high levels of unmet need (Choitz & Reimherr, 2013). Nearly all students within the lowest quartile of family income enrolled at community colleges in 2007-2008 were faced with an average unmet need that ranged from $3,349 for part-time dependent students to $10,181 for full-time independent students (Choitz & Reimherr, 2013). As community colleges look for ways to improve students’ outcomes, it is natural in light of the critical role of financial aid and the levels of unmet need faced by their students to ask, would more effectively lowering the price of college support higher levels of college attainment for low-income students? And perhaps to specifically ask, would expanding the level of Pell grants provided to low-income students—or even making community college free-- lead to improved program of study completion?

This was the topic explored by Dr. Sara Goldrick-Rab in her recent presentation to an audience of scholars at the University of Illinois sponsored by The Forum on the Future of Public Education. During this presentation Goldrick-Rab shared how through the Wisconsin Scholars Longitudinal Study, a six-year-long multi-method experimental study, her team of researchers strived to learn if increased financial aid led to improved academic outcomes for low-income students. As a result of what was learned through this study, Goldrick-Rab encouraged the scholars in the room to think systemically and critically about the issues of financial aid. Goldrick-Rab described the challenges faced by low-income students, including supporting families (including their parents, siblings, and children), holding multiple part-time jobs, working third shift, homelessness, hunger, and living in impoverished communities. Using a randomized experiment, she found that when private grants substantially reduced the price of college, as they did for university students in the study, on-time rates of bachelor’s degree completion rose. However, after three years the study showed no significant impact associated with the funds provided by the Fund for Wisconsin Scholars to community college students. This was despite that fact that over half of the students in the study dropped out of the study prior to earning a degree, most frequently because of the costs associated with college.

While this finding might seem to contradict the students’ need for aid, Goldrick-Rab pointed out that there were many factors that minimized the potential impact of this new funding for community college students. Specifically, she illustrated how systemic issues within the financial aid system created barriers that have a disproportionate impact on low-income students. Key issues she highlighted about the financial aid system included the displacement of funding, where students’ net increase from the new funds was greatly decreased by the financial aid ceiling. The debt ceiling is based on tuition and fees, both of which are traditionally lower at community colleges.  However, as she noted, the overall financial aid package was also typically lower. Community college recipients of the grants faced high levels of unmet need, where on average they saw a reduction in their net costs from $9,800 to $8,000 per year.  In the cases where the grant funding reduced the amount of loans they students took out, Goldrick-Rab shared how they typically saw a reduction in the student’s subsidized loans and not their unsubsidized loans. Timing of financial aid also created barriers for low-income students.  Some students unfamiliar with the financial aid process lost financial aid because they completed the FAFSA process late in the cycle. Others received their financial aid packages so late that they had already missed key milestones in their coursework or had dropped out.

Goldrick-Rab then provided a brief overview of some of the key points from her upcoming book, Paying the Price: College Costs, Financial Aid, and the Betrayal of the American Dream, that is scheduled to be released in September of this year. In this book she explores college affordability, expanding beyond the federal definition of the cost of attendance to a more holistic understanding of the real price of attending college. In her presentation she highlighted the increased spending on Pell grants and the decreased purchasing power of that investment.  She also highlighted the detrimental effects on low-income populations of reduced state support for higher education and rapid expansion of tuition costs. Goldrick-Rab concluded that higher education is increasingly unaffordable, not just for the growing population of low-income individuals, but also for middle-income individuals as well. USCPrice Sol Price Center for Social Innovation provides a short video of Goldrick-Rab describing her new book.

Goldrick-Rab, who describes herself as a scholar-activist and educational optimist, is not comfortable simply conducting research and reporting it through scholarly channels. Instead she promotes the idea of using translational research.  In 2013, with funding from the Great Lakes Higher Education Guaranty Corporation, she launched the Wisconsin HOPE Lab with the goal of helping “policymakers and practitioners (a) accurately state the costs of attending college, (b) ensure that families and students understand these costs, and (c) find effective ways to cover these costs that enhance degree completion rates as well as the personal and societal benefit of postsecondary education” (Wisconsin HOPE Lab, 2016). Dr. Goldrick-Rab ended her presentation with an appeal to the audience advocating for an open discussion about the costs and benefits of universal college, which would lower the price of college without requiring students to apply for financial aid. She stated that in order to gain stable living-wage employment in this country, a college credential is necessary, and further that we are all served by a well-educated populace. Goldrick-Rab chose not to advocate for a specific model of universal college, instead inviting the audience to be part of that debate.  She has, however, previously published her views on universal college, one example of which is Redefining College Affordability: Securing America’s Future with a Free Two Year College Option, published in April 2014 by the Lumina Foundation.

This begs the question. How can we make college affordable for everyone who is committed to getting a postsecondary education? Do you support universal college? If so, what model do you feel would have the most benefit? If not, what are your concerns about free college? Tell us what you think would lead to better educational equity for all, and what role you think we should take.