Intro
Opportunity for Higher Education
in a Perfect Storm
The Inter-Ivy, First Generation College Student Network
Brown University
Providence, Rhode Island
February 28, 2015
Tom Mortenson
Senior Scholar,
The Pell Institute for the Study of Opportunity in Higher Education
Higher Education Policy Analyst,
Postsecondary Education OPPORTUNITY
The Perfect Storm
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Reality versus Policy
Demographics
Labor Markets
State Policy Choices
Federal Policy Choices
Consequences for (some) students
Is this class warfare?
The Perfect Storm
Realities:
• Stages of economic development:
• Primary: agriculture, natural resources
• Secondary: manufacturing
• Tertiary: human capital
• Dynamic demography
• Shrinking white/growing minority populations
• Growing shares of poor children in K-12 and higher education
• Aging population, living longer
• Globalization
The Perfect Storm
Federal policy choices:
• Progressive policy era: 1862 to 1980
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1862: Morrill Land Grant Act
1895: Second Morrill Land Grant Act
1944: Servicemen’s Readjustment Act
1957: National Defense Education Act
1965: Higher Education Act
1972: Pell Grant program
1978: Middle Income Student Assistance Act
• Regressive policy era: 1980 to present
• 1981, 1982, 1994: Pell Grant maximum award reduced
• 1987: Federal aid moves away from need-based grants
• Aging population, living longer
The Perfect Storm
State policy choices:
• Progressive policy era: to 1980
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Universal K-12 education
State teachers’ colleges
Junior colleges
Need-based grant aid
Increased funding efforts for higher education
• Regressive policy era: 1980 to present
• Cutbacks in state appropriations efforts
• Colleges and universities raise tuition charges to students
• Growth in merit based scholarship programs
The Perfect Storm
Institutional policy choices:
• Progressive policy era: to 1980
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Universal K-12 education
State teachers’ colleges
Junior colleges
Need-based grant aid
Increased funding efforts for higher education
• Regressive policy era: 1980 to present
• Enrollment management
• Prestige race (U.S. News)
• Revenue replacement: full pay versus institutional aid, nonresidents versus state residents
• Research versus instruction in public 4-year institutions
The Perfect Storm
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Reality versus Policy
Demographics
Labor Markets
State Policy Choices
Federal Policy Choices
Consequences for (some) students
Is this class warfare?
K-12 School Lunch Program
Change in Upper Limits for
First, Second and Third Family Income Quartiles
Between 1987 and 2013
Third
Quartile
7.8
Second
-1.8
Bottom
-9.5
-12
-10
-8
-6
-4
-2
Change (%)
0
2
4
6
8
10
Low Income Student Shares of
Total
The Perfect Storm
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Reality versus Policy
Demographics
Labor Markets
State Policy Choices
Federal Policy Choices
Consequences for (some) students
Is this class warfare?
Median Income for Males Age 25 and Over
by Educational Attainment
1958 to 2013
$100,000
$90,000
Advanced Degree
$80,000
Median Income (Constant 2013 $)
$70,000
Bachelor's Degree
$60,000
$50,000
1-3 Years of College
$40,000
High School Graduate
Some High School
$30,000
$20,000
Less Than 9th Grade
$10,000
$1958
Source: US Census Bureau
1963
1968
1973
1978
1983
1988
1993
1998
2003
2008
2013
Change in Median Income for Males
by Educational Attainment
1973 to 2013
Less Than 9th Grade
-$4,940
Some High School
High School Graduate
-$18,988
-$19,474
1 - 3 Years of College
-$15,571
Bachelor's Degree
-$7,152
Advanced Degree
-$25,000
$7,816
-$20,000
-$15,000
-$10,000
-$5,000
$0
Change in Median Income (Constant 2013$)
Source: US Census Bureau
$5,000
$10,000
Median Income for Females Age 25 and Over
by Educational Attainment
1958 to 2013
$70,000
$60,000
Advanced Degree
Median Income (Constant 2013 $)
$50,000
Bachelor's Degree
$40,000
1-3 Years of College
$30,000
High School Graduate
$20,000
Some High School
$10,000
Less Than 9th Grade
$1963
Source: US Census Bureau
1968
1973
1978
1983
1988
1993
1998
2003
2008
2013
Change in Mean Income for Females
by Educational Attainment
1973 to 2013
Less Than 9th Grade
Some High School
High School Graduate
$1,943
-$1,421
-$280
1 - 3 Years of College
$3,205
Bachelor's Degree
$10,080
Advanced Degree
-$4,000
$12,078
-$2,000
$0
$2,000
$4,000
$6,000
$8,000
Change in Mean Income (Constant 2013$)
Source: US Census Bureau
$10,000 $12,000 $14,000
The Perfect Storm
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Reality versus Policy
Demographics
Labor Markets
State Policy Choices
Federal Policy Choices
Consequences for (some) students
Is this class warfare?
State Fiscal Support for Higher Education
per $1000 of State Personal Income
FY2015
Wyoming
New Mexico
North Dakota
Alaska
Mississippi
North Carolina
Arkansas
Hawaii
Utah
Alabama
Illinois
Nebraska
West Virginia
Georgia
Kentucky
Idaho
Indiana
Oklahoma
California
Kansas
Tennessee
Iowa
Montana
Louisiana
Texas
Maryland
South Carolina
Minnesota
South Dakota
Delaware
Florida
Connecticut
New York
Maine
Wisconsin
Washington
Michigan
Nevada
Ohio
Virginia
Oregon
New Jersey
Missouri
Massachusetts
Arizona
Rhode Island
Vermont
Colorado
Pennsylvania
New Hampshire
0.00
Sources: Grapevine, Bureau of Economic Analysis
$1.82
2.00
$10.65
$10.38
$9.95
$9.78
$9.13
$8.95
$8.35
$8.31
$8.17
$8.14
$7.67
$7.66
$7.36
$6.89
$6.62
$6.51
$6.30
$6.25
$6.15
$6.13
$6.03
$5.94
$5.88
$5.75
$5.67
$5.62
$5.59
$5.46
$5.21
$5.12
$5.11
$5.01
$4.81
$4.75
$4.62
$4.50
$4.49
$4.49
$4.43
$4.20
$4.20
$3.82
$3.74
$3.58
$3.22
$3.15
$2.81
4.00
6.00
8.00
Dollars ($)
10.00
$12.15
$11.99
12.00
14.00
Average Tuition and Requred Fees in Public Institutions
In Constant Dollage
AY1964 to AY2013
9,000
$8,070
8,000
7,000
Tuition & Required Fees (AY2013$)
$6,495
6,000
$5,899
5,000
$4,625
$4,689
4-Year
All
Institutions
4,000
$3,262
$3,385
3,000
$2,147
2,000
$2,792
$2,716
$2,512
$1,825
$2,252
$2,200
$1,761
$1,696
$1,360
$1,378
1,000
$1,022
2-Year
$728
0
1964
1968
Source: 2013 Digest of Education Statistics
1972
1976
1980
1984
1988
1992
Academic Year Ending
1996
2000
2004
2008
2012
Need-Based Grant Share of State
Student Financial Aid
The Perfect Storm
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Reality versus Policy
Demographics
Labor Markets
State Policy Choices
Federal Policy Choices
Consequences for (some) students
Is this class warfare?
Need-Based Share of Federal
Student Financial Aid
Purchasing Power of Pell Grant
The Perfect Storm
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Reality versus Policy
Demographics
Labor Markets
State Policy Choices
Federal Policy Choices
Consequences for (some) students
Is this class warfare?
Share of Dependent 18 to 24 Year Old Enrollment
Enrolled in 4-Year Institutions
by Family Income Quartiles and Race/Ethnicity
2013
Hispanic
68.6
86.4
Top
Asian
77.7
Black
80.8
White non-Hispanic
Family Income Quartiles
61.0
74.0
Third
68.8
72.0
59.1
68.9
Second
72.0
67.2
49.3
68.8
Bottom
61.0
57.9
0.0
10.0
20.0
30.0
40.0
50.0
4-Year Enrollment Share (%)
60.0
70.0
80.0
90.0
100.0
Pell Grant Shares in 4-Year & 2Year
Tertiary Type-A Degree Attain 25-34 yr
olds OECD 2003
Projected Tertiary Type-A Degree attain
OECD 2020
The Perfect Storm
•
•
•
•
•
•
•
Reality versus Policy
Demographics
Labor Markets
State Policy Choices
Federal Policy Choices
Consequences for (some) students
Is this class warfare?
Contact Information:
Download this PowerPoint from:
www.postsecondary.org
Email to request PowerPoint from:
tom@postsecondary.org
Financial Need Analysis Model
Cost of Attendance
Tuition and fees
Room and board
Books and supplies
Personal and medical care
Transportation
Less: Expected family contribution
Income and assets
Family size
Number of children enrolled in college
Equals: Financial need
Gift aid: grants, scholarships, waivers
Earnings from work/study
Education loans: subsidized/unsubsidized Stafford, PLUS
Federal tax credits
Financial Resources & Barriers
Mean Unmet Financial Need by
Quartiles
Mean Student W/L Burden
Mean Net Price to Family
Mean Net to Family as a % of
Parents’ Income