Many public colleges and universities expect their poorest students to pay a third, half or even more of their families’ annual incomes each year for college, a new study of college costs has found.
With most American students enrolling in their states’ public institutions in hopes of gaining affordable degrees, the new data shows that the net price – the full cost of attending college minus scholarships – can be surprisingly high for families that make $30,000 a year or less.
The numbers track with larger national trends: the growing student-loan debt and decline in college completion among low-income students.
Because of the high net price, “these students are left with little choice but to take on heavy debt loads or engage in activities that lessen their likelihood of earning their degrees, such as working full time while enrolled or dropping out until they can afford to return,” Stephen Burd wrote in a recent report for the New America Foundation, a nonpartisan group that examines the effects of rising inequality and other trends. The federal government has increased its spending on Pell grants for the neediest students. Still, the high net prices show that the grants go only so far.
Burd, a senior policy analyst for the foundation’s education-policy program, looked at data that the U.S. Department of Education has required public and private colleges and universities to provide for the past few years. The latest average net-price figures are for the 2010-11 school year.
The net price and much more information about all colleges and universities nationwide is on the department’s College Navigator website.
The foundation’s report argued that many private colleges use their own scholarship money to bring in top students from more affluent families in order to boost their position in the U.S. News & World Report annual rankings.
“While the problem is not as extreme among public universities, it is rapidly getting worse,” the report noted.
At public institutions, the loss of state financial support and a rise in tuition play a big part in the trend of higher net prices, Burd said in an interview.
But Burd said school documents showed that “the drive for prestige is very strong as well.”
The Pennsylvania State University and the University of Missouri-Kansas City were among the most expensive public schools for low-income students. At Penn State, the net price for the lowest income group was $16,000 to $18,000 at schools in the statewide system; at UMKC, it was $16,798.
Officials at both schools said those numbers didn’t tell the whole story.
Twenty-eight percent of Penn State’s students receive federal Pell grants. Full grants, worth $5,500 this year, go to low-income families. Partial grants go to people generally with incomes of around $50,000 or less.
Penn State doesn’t admit students based on ability to pay or deliberately offer aid packages that don’t meet the need, said Lisa Powers, the director of the school’s Department of Public Information. But tuition and state aid are the school’s only source of money, she said, and state appropriations last year were the same as they were in 1996, when the school had 15,000 fewer students.
“The fact is, Penn State does not enroll enough ‘full pay’ students to produce the revenue needed to lower the net price for all low-income students,” Powers said, calling the school’s scholarship fund “modest at best.”
At the University of Missouri-Kansas City, Jennifer DeHaemers, the associate vice chancellor for student affairs, said the net price data for two years ago was accurate but no longer relevant.
“UMKC recognized several years ago that our net price for the lowest-income students was higher than it should be, and we crafted a new approach,” she said.
As of the 2011-12 school year, the school effectively waived tuition costs for full-time students who receive Pell grants and maintain good grades. The result is that the school is moving in the direction of making a college education more affordable for Missouri’s poorest students, DeHaemers said.
Penn State and Missouri weren’t alone, however, in showing high prices for poor students, according to the latest College Navigator data.
The average net price, for instance, for the lowest-income students was $15,415 at South Carolina State University; $11,071 at Winthrop University in Rock Hill, S.C.; and about $11,000 at the University of Southern Mississippi and at Mississippi State University.
Tuition at public universities in Illinois in the 2010-2011 school year averaged $10,508 for the state’s poorest students, ranging from $15,065 at Northeastern Illinois University to $7,432 at the University of Illinois at Urbana-Champaign.
At the same time, some states, including North Carolina, Florida and California, charged low-income students about $5,000 to $6,000 on average.
High net prices for the neediest students are most prominent at private nonprofit schools. Burd found that nearly two-thirds of the 479 private colleges and universities that he studied charged students from families that made $30,000 or less a net price of more than $15,000 a year.
The report used the University of Miami as an example of a private school that had shifted to more non-need-based aid to attract talented, and wealthier, students. Federal data shows that students whose families make $30,000 or less paid, on average, $21,415 after scholarships at the University of Miami.
“We agree that at the University of Miami we should strive to help our needy students attend college,” spokeswoman Liz Amore said.
She said the school was shifting money from non-need-based, or “merit,” aid to need-based aid and was raising money for scholarships for low-income students.
“I’m hoping this report shows the importance of the net price number,” Burd said. “Because colleges, when they know a certain number is important, tend to work toward improving that number.”