USC Price School of Public Policy

Declining college affordability focus of Price Social Innovation seminar

March 10, 2016

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Sara Goldrick-Rab, author of “Paying the Price: College Costs and the Betrayal of the American Dream”
(Photo by Deirdre Flanagan) More photos from the seminar are available on Flickr »

By Cristy Lytal

In the 1960s, U.S. Sen. Claiborne Pell spoke of “the right of every youngster, regardless of their family’s financial circumstances, to obtain a post-secondary education.” Today, despite the federal need-based financial aid system of Pell Grants, college affordability is on the decline, as detailed by scholar and author Sara Goldrick-Rab during a seminar sponsored by the Sol Price Center for Social Innovation, which hosts researchers whose work is profoundly impacting the current understanding of urban poverty in America.

The center’s research seminar series seeks to catalyze a university-wide community of scholarship around social innovation.

Goldrick-Rab, a professor of educational policy studies and sociology at the University of Wisconsin-Madison, presented her six-year experimental study of students receiving need-based aid. The study is also the topic of her forthcoming book, Paying the Price: College Costs and the Betrayal of the American Dream.

“It is increasingly recognized that the best jobs in emerging industries in 21st century requires training beyond high school, and many of them require a bachelor’s degree,” said Professor Gary Painter, director of Social Policy at the Price Center for Social Innovation. “Figuring out ways to make higher education affordable is a pressing policy issue and has the potential to reduce inequality in the future.”

Effects on students

To study financial aid, Goldrick-Rab and her colleagues examined and measured the effects that grants – administered through the Fund for Wisconsin Scholars – had on various student outcomes. The Fund for Wisconsin Scholars, which was created by a $175 million gift from a private philanthropist, used a lottery system to award grants to low-income students at 42 public colleges and universities throughout the state. The fund offered $1,800 per year to students at two-year institutions, and $3,500 per year to students at four-year institutions, for up to five years.

The researchers began tracking 3,000 grant recipients and non-recipients — including their enrollment statuses, grades, credits, and financial aid applications and packages. The researchers also fielded extensive surveys and interviews.

The grants had little or no effect on retention rates from the first to second years, transfer rates from two- to four-year institutions, or credits accumulation over three years. However, for the four-year university students, the degree completion rate within four years rose from 16 to 21 percent.

Goldrick-Rab’s team found many factors that might have limited the impacts of the grants. First, the students typically did not receive the full $1,800 or $3,500 amount, because they didn’t have enough “room” left in their financial aid packages after assuming loans. Only 38 percent of the four-year university students received at least $1,000; the rest received less. And the two-year college students didn’t receive much money at all.

“If you want to give somebody money, it is not a good idea to do it through the federal financial aid system,” said Goldrick-Rab. “Things do not work out as planned.”

The students also struggled with the eligibility requirements of the grants. For example, if their parents got new jobs, their grades dropped below a C average, or they enrolled in fewer than 12 credits at a time, they lost their eligibility.

Lastly, the students were generally confused by the program, as well as by the financial aid system in general.

Systemic troubles

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As Goldrick-Rab explained, “Essentially, what our current financial aid system says to students is: think that you can afford college, ignore the price, choose your college, decide to go to college, show up for college, then we’ll tell you the price. Trust us. And then by the way, we’ll only show you the first year price. We don’t know what it’s going to be for the second year, third year or fourth year. It’s a highly untrustworthy system.”

When this system fails students, they’re left balancing the demands of making money and obtaining good grades. Sixty-two percent of students in the study worked an average of 18 hours a week, and 20 percent worked multiple jobs. Their work hours interfered with both school and sleep — 83 percent had a job between 9 a.m. and 6 p.m., 61 percent between 6 and 9 p.m., 16 percent between 10 p.m. and 2 a.m., and 11 percent between 2 and 8 a.m. Meanwhile, 50 percent of the students were looking for jobs.

“The research indicates that more than 15 hours [of work] a week is associated with poorer outcomes in college,” Goldrick-Rab said.

Students’ financial troubles extend well beyond paying tuition. One in three students in the Wisconsin study felt obligated to financially support their parents. Furthermore, in a national survey of 4,000 students at 10 community colleges, Goldrick-Rab found that 20 percent are classified as hungry, and 13 percent are homeless. Hunger and homelessness also plague students at four-year institutions, though to a lesser extent.

After all of these struggles, less than 50 percent of students finished a degree of any kind within the six years of the study, and only 14 percent completed a bachelor’s degree within four years. Fifty-five percent of the dropouts left college with debt but no degree.

To address these pervasive problems, Goldrick-Rab made several suggestions for reform, such as requiring schools to provide more accurate costs of attendance and improving the availability of work-study. She also argued that the time has come for universal free public higher education.

“It’s time to make college affordable,” she said. “And I don’t know how I could spend the time that I spend with students like these and not work really hard to figure out the best ways to do that.”