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It's Time for a Debt-Free Guarantee

By Ethan Senack
Higher Education Advocate

This blog originally appeared on HuffPost Education.


As a nation, we've long believed that education is a gateway to greater opportunity.

In keeping with that priority, we've taken significant steps toward a broad vision of affordability and access. Compared to 1970, almost 10 million more students were enrolled in college in 2014 - a 250% increase (total U.S. population only increased 150% in the same period).

However, while this progress is certainly laudable, our higher education system is failing those who stand to benefit the most from it. Among a host of potential indicators, here are two that are particularly illustrative:

Attainment: No matter how you slice it, there's a massive college attainment gap between students coming from the highest income bracket and those coming from the lowest.

This occurs from initial college enrollment – the Pell Institute found that high school graduates from high-income families were 27% more likely to continue into college than students from low-income families – and continues throughout a low-income student's college career as they face financial challenge after challenge.

Since 1970, the percentage of dependent 24 year-olds in the top income bracket that hold a Bachelor's degree has nearly doubled - from 40% to 77%.  Students in the second highest income bracket are achieving Bachelors degrees at 2.26 times the rate they were in 1970.

At the same time, though, the percentage of dependent 24 year-olds with Bachelors degrees in the bottom income quartile has only increased 1.5 times. That may not seem much different than the upper brackets, but that change is only 3% growth – from 6% in 1970 to 9% in 2013. Compare that to the 37% growth in the top bracket.

Affordability: After accounting for all federal and state financial aid grants, the net cost of a year of college is, on average, 84% of the yearly income of a low-income student's family.  That's compared to just 15% of the yearly income for a family in the top income bracket.

Even after you account in all other forms of financial aid (scholarships, loans, etc.), and you subtract the federally calculated amount that a student or their family are expected to provide, an average student in the lowest income bracket is still short $8,000 per year.

To put that in context, a family in that bracket makes less than $34,000 per year - meaning that even after their expected contribution, the financial gap is still a quarter of their entire annual income. In contrast, the amount of financial aid available to students in the top income bracket has consistently exceeded their need by more than $10,000.

These staggering numbers make one thing clear - our higher education system needs dramatic changes if we're going to deliver on the promise greater opportunity for all.

We need a re-prioritization - a reinvestment in making higher education more accessible - not through broad strokes, but by returning to a system where strategically targeted programs direct aid to those who need it most, rather than further subsidizing those who don't.

That's why the idea of a "debt-free guarantee" makes sense. Debt-free college means directing state and federal resources to cover the insurmountable financial gap faced by students and families in lower income brackets. It means making college more accessible for low-income families, it means making it easier for those students to stay enrolled, and it means cutting their financial burden after graduation. 

In coming weeks, we'll talk more about this, but simply put: if higher education is a gateway to opportunity, it's our responsibility to make sure the doors are fairly open to all.

 

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Please see the report "Indicators of Higher Education Equity in the United States," published by the Pell Institute and PennAhead in 2015, for the figures included in this blog. http://www.pellinstitute.org/downloads/publications-Indicators_of_Higher...