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"We all know about the correlations between test scores and family income. And think about the student writing a college essay and doing what every student does, which is asking his or her friends, parents, and older siblings to take a look at it. Well, imagine if they're all in families where there are graduates with advanced degrees, where there are thousands of books in the home. Then imagine if the parents, maybe, don't have English as a first language and finished their education at high school."
Guttentag says his office is constantly scrutinizing its recruiting and selection criteria; he's interested in "casting a wider net," as he puts it, and in understanding the context in which a particular applicant has performed. "One of the themes we talk about in our office is distance traveled: How much has the student done with the opportunities that he or she has been given?" In the most recent admissions cycle, Duke mailed information about its new financial-aid programs to about 1,000 high schools identified as having low-income students of high ability.
If higher education is paying more attention to affordability, that's in part a self-interested—or a preemptive—response to the anxiety attached to a slowing economy. A recent statement from NAICU said "the force behind colleges' efforts" in financial aid was "consumer concern about rising tuitions, exacerbated by family incomes that have steadily lost ground to the Consumer Price Index over the past decade." With the current squeeze on home values, the credit crunch, and the price spirals in the grocery store and at the gas pump, families may be finding it hard to make the parental contribution that's called for in the typical financial-aid formulas.
At the same time, student debt has been growing, notes Robert Shireman of the Institute for College Access and Success. According to data assembled by an offshoot of his organization, the Project on Student Debt, at private universities debt levels for graduating seniors with student loans nearly doubled from $11,356 to $22,125 over the past decade. Nearly two-thirds of students at four-year colleges and universities now graduate with student-loan debt; in 1993, less than one-half of college graduates had student loans. Shireman says there's evidence that loan-repayment burdens dissuade students from attending graduate school and from entering public-service careers. He says he's also concerned that debt discourages entrepreneurial activity; students may choose a secure job over a risk-taking path.
Student debt is one theme that, for years, has echoed through Congress. There have been tough questions about why colleges and universities enjoy tax-exempt status even as their endowments—along with their tuition rates—are growing. This past winter, the Senate Finance Committee sent a detailed survey to 136 of the nation's wealthiest institutions. The fact-finding letters, covering endowment-spending and financial-aid policies, were sent by Iowa Republican Senator Charles Grassley, who held hearings last fall on the growth of college endowments. "Tuition has gone up, college presidents' salaries have gone up, and endowments continue to go up and up," Grassley said. "We need to start seeing tuition relief for families go up just as fast."
Replying to Grassley's request on behalf of Duke, President Brodhead made a clear link between tuition and financial aid. In the interest of "providing access to a diverse socioeconomic population," he wrote, "Duke has long held a policy that increases in its tuition are accompanied by a greater rate of increase in financial aid."
Critics of higher education who are sympathetic to Grassley note that colleges relentlessly hike tuition in response to more than financial-aid demands. Brodhead's letter, in explaining Duke's tuition policy, referred to a "commitment to affordability" and also to "programmatic needs," "market factors (relative tuition ranking, strength of student demand)," and "alternative revenue sources," notably endowment income. As the critics see it, top-tier institutions pay out too modest a percentage of endowment earnings—particularly compared with the extraordinary rates of return that their endowments have enjoyed. "Covering the expenses of low-income and working-class students is expensive," says the Century Foundation's Kahlenberg, adding that it will require greater federal support and "will also require that universities make financial aid a higher priority."
In recent years, endowment growth has been a high priority, and a certainty: The endowments of seventy-six colleges and universities have reached $1 billion or more. Private foundations are required to spend a minimum of 5 percent of their endowments a year. Colleges and universities face no such requirement, and many—including some that have led with the recent financial-aid announcements—have lower payout rates. Over the last decade, the average spending rate for Harvard was 4.25 percent. For Princeton, it was 4.0 percent. For Duke, it was 4.04 percent.
The growth in Harvard's endowment last year, thanks to investment income as well as new gifts, was $5.7 billion—a sum larger than all but fourteen other universities' total endowments. (Harvard estimates the annual cost of expanding its financial-aid program to be $22 million, just a fraction of its annual earnings.) Fewer than 400 of the roughly 4,500 colleges and universities in the U.S. had even $100 million in endowments.
Those figures illustrate a wealth gap that is growing more appreciable in higher education, just as it is in society broadly. As Grassley's line of questioning suggests, it may be harder for the higher-education elite to argue that it can't afford to be more affordable.
Above all else, higher education's focus on access may reflect a social imperative—or recognition of demographic reality. Applications to selective colleges and universities reached new heights this year: up 19 percent at Harvard, 5 percent at Duke, and 2 percent at the University of Pennsylvania, in part because of an unprecedented swelling in the high-school population. But the next decade will bring a decline in the number of affluent high-school graduates, along with an increase in the number of poor and working-class graduates.
Demographers project a national decline of 10 percent or more in non-Hispanic white students, the population that traditionally is most likely to pursue higher education. They foresee a double-digit rise in the proportion of minority students, especially Hispanics, who traditionally have been less likely to attend college and to go into debt to fund education. Colleges and universities will be recruiting, then, from a different pool of applicants—one that won't look like the pool that Clotfelter scrutinized in the 1980s.
That applicant pool of the future inevitably will be needier, says Tom Mortenson, a higher-education policy analyst and senior scholar with the Pell Institute for the Study of Opportunity in Higher Education. (Mortenson identifies with Senator Grassley as a fellow higher-education watchdog; both are Iowans.) Families will be looking for strong signals that they can absorb college costs, seemingly approaching stratospheric levels. They're not likely to feel assured, he says, until higher education forges a fuller and more forceful social contract.
The rest of the world has been "furiously expanding educational opportunity and educational obtainment," in his view, even as the U.S. has stood still. "In this country we have seen income brutally reallocated according to educational attainment. I think we must expect that this will occur between countries as well. The question of who gets a college degree has everything to say about how socially healthy and vibrant and prosperous and cohesive and secure we are."
Low-income students are increasingly concentrated in community colleges, says Mortenson, even as the population of low-income young people is growing: The share of kindergarten-to-twelfth-grade enrollments approved for free and reduced-price school lunches has grown from about 30 percent in 1989 to 45 percent today. In a few years, if the trend continues, those needy students will form the majority of school populations. Will they then be drawn, say, to Duke?
According to Mortenson, the U.S. has been veering away from an opportunity-oriented society. The shrinking size of federal Pell Grants, declining allocations to state universities, and rising tuition levels across the higher-education landscape are prime indicators, he says. As an undergraduate at the University of Minnesota in the early 1960s, he paid $125 a quarter—an amount that he was able to fund through summer earnings and by becoming the university's very first work-study student.
In essence, he shaped his own financial-aid initiative. Today's students don't have that option.
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