• Increasing stratification, separate and unequal tiers
• In many ways reinforcing, and in some ways widening, inequality
 Political failure

Estimated Percentage of U.S. Population with
4-yr. College Degree by Age 24, by Family Income
Quartile, 1970-2011
100
90
80
70
60
50
40
30
20
10
0
6
10 11
15 15
30
40
71
1970
2011
Bottom 2nd 3rd Top
Source: Thomas G. Mortenson, “Family Income and Unequal Educational Opportunity, 1970-2011,” Postsecondary Education
Opportunity, 245 (2012), www.postsecondary.org

For-Profits
Private
Nonprofits
Stratification of Colleges
(Sources: College Board)
Published
Tuition &
Fees
(“Sticker
Prices”)
2012-2013
$15,172
Percentage of First-Time
Full-time
Students
Seeking BA who earn it within 6 years
22%
Percentage of Students
With Federal
Loans, 2007-
2008
94% (BA)
97% (AS)
Median
Student
Debt
(among
2007-08 graduates)
$32,700 (BA)
$18,800 (AS)
$29,056 65% 69% $17,700
Default
Rates
Among
Borrowers, after 3 years
(2009)
23%
7%
Publics $8,655 (4 yr)
$3,131 (2 yr)
(in-state)
55% 58% (BA)
33% (AS)
$22,400(BA)
$7,100(AS)
8% (BA)
18% (AS)

• Can’t just blame the colleges/universities
• History of government support for higher education

Percentage of Students Who Received 4 Year College
Degree or More, by Test Scores and Income, 2000
74 80
70
60
50
51
47
40
30 29
30
21
20
10
7 8
3
0
Low income Middle income High income
Source: U.S. Department of Education, National Center for Education Statistics, National Education
Longitudinal Study of 1988 (NELS: 88/2000), "Fourth Follow-up," unpublished data.
Low score
Middle score
High score

• Analysis of government documents, historical record
• Interviews with policymakers
• Statistical analysis of historical data on state spending and revenues

• POLICYSCAPE
– A political terrain that is densely cluttered with policies created at earlier points in time
– Requires maintenance & updating
• If left untended, problems ensue :
• Policy design effects
• Unintended consequences
• Lateral effects

• To what extent do policymakers manage existing programs?
Contemporary Obstacles:
• Polarization
• Plutocracy

I. Diminishing Opportunity in Federal Student Aid

$7 000
$6 000
$5 000
$4 000
$3 000
$2 000
$1 000
$0
Pell Grants Fall Behind and Student Borrowing Soars as
Tuition Rises at 4-Yr Public Universities (2010 Dollars)
$8 000 $25 000
$20 000
$15 000
$10 000
$5 000
$0
Tuition, 4 Yr Publics, 2010 Dollars Average Pell Grant, 2010 Dollars Avg. Student Loan Debt at Graduation, 2010 $
Sources: U.S. Department of Education; Digest of Educational Statistics; FinAid.org

Rising Polarization in Congress 
Demise of Effective Lawmaking for Federal Student Aid
1,2 100
1
0,8
0,6
0,4
0,2
GI Bill
(1944)
0
NDEA
(1958)
HEA
(1965)
Pells
(1972)
40
20
0
-20
80
60
House, degree of overall partisan polarization (DW-Nominate)
Senate, degree of overall partisan polarization (DW-Nominate)
Sources: Voteview.com; authors’ analysis of roll call votes

Growing Partisan Gaps in Support for
Amendments to Higher Education Laws, 1971-
2008
70
60
60
51
50
40
29
31
37
30
House
Senate
20
13
10
0
1971- 1980 1981-94 1995 -2008
Source: Author’s analysis of roll call votes on amendments. N=65 in House, 26 in Senate

Tuition Relief Through the Tax System:
Costly Alternatives…With Less Impact
• Hope, Lifetime Learning
Tax Credits, 1997
• American Opportunity
Tax Credit, 2009
– Largest share goes to families with household incomes between
$100,000-$180,000
*Such policies fail to expand access to college.
*As of 2013, they cost the
U.S. $16.7 billion—44% of the cost of Pell Grants
($38.2 billion).

II. Sinking Support for Public
Universities and Colleges
• 73% of American college students attend
• State spending per student declined 26%
(real),1990 to 2010
• Tuition rose by 113%
(real), 1990 to 2010
• Declining graduation rates

The Unequal Impact of Rising Tuition Costs
Fig. 4.1 Percentage of Family Income Required to Pay Cost of
Attending Public Four-Year Institutions, by Income Quintile,
114
1971 and 2011
120
100
80
60
42
46
40
20
29
19
13
10
19
0
Bottom Second Middle Fourth
Source: Donald E. Heller, "Trends in the Affordabilityof Public Colleges and Universities," in Donald E. Heller, ed., The States and Public Higher Education, (Baltimore, MD: Johns Hopkins
University Press: , 2011), p. 22. Updated with College Board . 2012. "Trends in College Pricing" http://trends.collegeboard.org/college-pricing. U.S. Census Bureau "Table F-3 Mean Income Received by Each Fifth and Top 5 Percent of Families" http://www.census.gov/hhes/www/income/data/historical/families/.
6
9
Highest
1971
2011

Higher Education Squeezed Out As Mandatory
Costs Take a Larger Share of State Budgets
$3 000
$2 500
$2 000
$1 500
$1 000
$500
$0
1950 1960 1970 1980 1990 2000 2010
Tax Revenues
K-12
Medicaid
Higher Ed
Prison
Sources: Centers for Medicare and Medicaid Services; Center for the Study of Education Policy; State and Local Gov’t Finance Data Query System; Urban-Institute Brookings Tax Policy Center; U.S. Census
Bureau; Kaiser Family Foundation

For-Profit Colleges: Promoting
Opportunity?
• Low graduation rates: 22%
• 94% of students borrow for BA degree, and borrow highest median rates of any sector
($33,000)
• Account for 47 percent of student loan defaults; 23% default within 3 years

70%
Total Enrollment in Degree-granting Postsecondary
Institutions by Race and Institution Type, 2012
(Source: Digest of Education Statistics)
63%
61%
60%
54%
50%
47%
40%
30%
29%
White
Black
Hispanic
Other
20%
12%
8%
16%
11%
12%
15% 15%
20%
11%
10%
15%
9%
0%
Private Non-profit Public 4-yr Public 2-yr For-Profit

Each permitted by law to received up to 90 percent of revenues from Higher
Education Act’s Title IV; on average, receive 86 percent.
Attended by 10 percent of students; use $1 in $4 of
Higher Education Act’s
Title IV, 37% of Post 9/11
GI Bill, and 50% of DOD ed programs.

From Bipartisan Efforts for Reform…
(1950s – 1992)

…to Bipartisan Protection of the
Industry (1995-present)
• Deregulation:
– 85/15  90/10
– End of 50% on campus requirement
• Watering down gainful employment rules

Restoring the Public Purposes of
Higher Education