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Report Sheds Light on Higher Education, Income Mobility

There is plenty of data suggesting that education, particularly a college or university degree, leads to higher incomes. Less is known about the impact of higher education — and specific schools — on socioeconomic mobility, that is, moving from one “rung” of the income ladder to another.

A new study by The Equality of Opportunity Project sheds valuable light on this question: Which colleges in America contribute the most to helping students climb the income ladder?

Many Elite Colleges Have Chosen Affordability Over Access

Researchers found that poor students who attend top (i.e. selective or elite) colleges do about as well in terms of income as their rich classmates, but many fewer lower income students attend these institutions. According to a New York Times article on the study, “at 38 colleges in America, including five in the Ivy League – Dartmouth, Princeton, Yale, Penn and Brown – more students come from the top 1 percent of the income scale than from the entire bottom 60 percent.”

Further, less than one-half of 1 percent of children from the bottom fifth of American families attend an elite college; less than half attend any college at all.”

As Danny Yagan, one of the study authors, noted, “Free tuition only helps if you can get in.”

The authors of “Mobility Report Cards: The Role of Colleges in Intergenerational Mobility” tracked more than 30 million students born between 1980 and 1991, linking anonymized tax returns to attendance records for almost every college in America.

There are a number of interesting reflections on higher education policy that emerge from the interpretation of this data. The New York Times reports, “These patterns are important because previous research has found that there are many highly qualified lower-income students who did not attend selective colleges—and because the low- and middle-income students who do attend top colleges fare almost as well as rich students.”

Put a different way, “lower-income students end up earning almost as much on average as affluent students who attend the same college.”

The New York Times also concluded, “most Americans remain on a similar place on the income distribution graph from their late 30s through the end of their careers.”

College Mobility Rate Measures Graduates Movement Up Income Ladder

The researchers in the new study also developed a new data point — a college’s mobility rate – which combines a college’s share of students from lower-income families with its success in moving them into a higher permanent level on an income earning’s chart. A disparate collection of mainly mid-tier public colleges, including California State University – Los Angeles and the City University of New York System — and not the Ivies — have the best college mobility rates.

Of course, any number of factors can come into play to affect these conclusions. Most Ivies are mid-sized institutions, for example, so the impact that they have on national rates reflects the aggregate number of students that they contribute to the national findings.

Still, the findings raise important policy questions as American higher education continues to evolve and re-invent itself. For example:

  • Do elite colleges have a special mission to educate broadly across all income levels as the justification for their continuing status as non-profits?
  • If so, should they be held any more or less accountable for their ability to do so given their sticker prices, the size of their endowments, and their published statements on institutional mission?
  • What is more important: affordability or access?
  • It is widely accepted that public colleges typically educate the most first-generation students and those from the lowest socioeconomic class. In the race for students, do public and private colleges and universities really educate different students by income level or is the pool of applicants from which they select similar in 2017?
  • Is there differentiation by income between public and private “flagship” research universities or between the research universities and four-year predominantly undergraduate institutions?
  • Do non-elite institutions serve students from lower socioeconomic classes successfully?
  • If so, given the level of preparedness affecting the social, familial, cultural, psychological, and financial challenges that these students face, should different standards apply to admission, retention, and graduation rates across colleges and universities?
  • In fact, should a college’s accountability be measured more fairly against the challenges that the college faces when working with students who require more attention than similar students at highly selective colleges?
  • Is it the money that matters most in the “free” college tuition plans now being proposed, when retention and graduation rates do not support greater student success if only the financial barriers are lessened?
  • Is a partial solution to design policies that better reflect institutional missions, intentions, and projected outcomes?
  • Should state and federal governments set education, including higher education, as a much higher priority in planning and funding cycles given rising income inequality in America?

For the past several years, consumer and political polling have relied on high tuition sticker prices, rising debt, and anecdotal personal stories to shift the blame of higher education’s failures on to America’s colleges and universities.

There is plenty of blame to go around with a good share of it borne by higher education. But politicians and their policy planners must also accept their own failures to read the research, understand and anticipate the demographic shifts, and assess the impact of technology on American society.

There is a persistent and growing problem with income inequality in the United States.

Rather than police American higher education, perhaps our political, social and economic leadership should find a way to partner with colleges and universities on developing solutions. It begins by doing the homework necessary to ask the right questions.