Pell Grant Share of Undergraduates Enrollment at the 50 Best National Universities and

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1 Pell Grant Share of Undergraduates Enrollment at the 50 Best National Universities and A growing share of students in the K-12 pipeline headed for higher education come from low income families. This means that a growing share of the country's future workers, parents and citizens are growing up today in families with low incomes. However this is not true at the 50 best national universities (as defined by US News). Not only are there relatively few students from low income families on these best national university campuses but their shares of undergraduate enrollments are shrinking. America's best national universities have chosen to enroll primarily students born into high income families. More than 82 percent of their undergraduates have incomes high enough that they cannot qualify for federal Pell Grants that are targeted on low and lower-middle income students. The relative scarcity of students from low income families on these campuses is the result of institutional choice of admissions criteria that strongly favor students born into high income families. These 50 best national universities are highly academically selective. High school grades, SAT scores and ACT scores are strongly correlated with family income. Thus these highly academically selective universities effectively practice admissions based on social class. Children born into high income families are given the admissions edge to these universities by birth. This study assigned letter grades to the performance of these 50 best national universities for their enrollment of students from low income family backgrounds. For 2001 the following were the grades earned by these institutions: A or A- 3 B+, B or B- 2 C+, C or C- 3 D+ or D 0 F 42 This is a record of staggering failure to share the environment of America's best 50 national universities with students from the bottom half of the family income distribution. It is a record of shame and disgrace. But additional evidence presented here also suggests many of these institutions care little for reaching out to prospective low income students and supporting enrolled students from low income families. 24 of these top 50 best national universities have no federal TRIO programs on their campuses, although these 50 best national universities participate richly in the other Title IV programs of financial aid. The federal TRIO programs include Upward Bound, Talent Search, Student Support Services, McNair Scholars and Educational Opportunity Centers. They are targeted on students from families with incomes below 150 percent of the federal poverty level where neither parent graduated from college. There are 2,617 of these programs serving 859,000 students operated by colleges and universities throughout the country. Postsecondary Education OPPORTUNITY Page 1

2 However the 50 best national universities operate only 69 of these 2,617 programs. And 24 of our 50 best national universities do not operate a single TRIO program on their campuses. Most of these institutions are disengaged from federal programming designed for outreach to and support for students from low income/first generation families. Fortunately there are brilliant exceptions to this gloomy view of the role of our 50 best national universities' enrollment of students from low income families. On the West Coast of the United States are outstanding universities making serious commitments to the enrollment of students from low income families. Of the nine universities with the largest proportions of undergraduates with Pell Grants seven are located in California and one is located in Washington. These institutions with more than 20 percent of their undergraduates with Pell Grants in 2001 were: Univ of Calif/Los Angeles 35.1% Univ of California/Berkeley 32.4% Univ of California/Irvine 31.5% Univ of California/Davis 28.5% Univ of California/San Diego 28.3% Univ of Calif/Santa Barbara 24.8% Univ of Southern California 24.1% University of Florida 22.0% University of Washington 21.1% Notably all but one of these top universities are public. These universities have demonstrated that institutional excellence and commitment to enrolling students from low income families are mutually achievable. These universities put the poor records of best national universities in the rest of the country to shame. When we review other characteristics of these 50 best national universities, we begin to wonder if their continued eligibility for participation in federal student financial aid programs should be reconsidered. The student aid programs were created to serve financially needy students as a part of President Johnson's War on Poverty. If these elite institutions are not interested in helping students from low income families then the federal financial aid dollars could probably be better spent elsewhere, at institutions with serious commitments to serving low income students. In the private sector the excess of revenues over expenses is called profits and profits are taxed to finance needed government services. But in higher education the excess of revenues over expenses is called endowment and this is tax-exempt. These 50 best national universities are holding more than $119 billion in endowments. These institutions appear to be operating as profit-driven taxexempt businesses. Most are divorced from enrolling students who represent a vital and growing share of our nation's future workers, parents and citizens. Institutions that fail to serve these vital public interests should have their continued tax-exempt status reconsidered by the federal government as well. Postsecondary Education OPPORTUNITY Page 2

3 In this analysis we critically examine the commitment of the country's 50 best national universities to the enrollment of students from low income families. We find the commitment adequate to outstanding in eight of the 50 best national universities. But we find the commitment utterly inadequate--failing--in the remaining 42 of the 50 best national universities. The Data The two key data sources used in this analysis are undergraduate enrollment and Pell Grant recipient data for the and academic years. We obtained these data from the U.S. Department of Education for every Title IV-eligible postsecondary institution in the United States and its territories. The fall 1992 and 2001 undergraduate enrollment data were collected in the IPEDS enrollment surveys by the National Center for Education Statistics. We obtained these data from Tom Snyder at NCES as an Excel spreadsheet and we will this spreadsheet to OPPORTUNITY subscribers upon request. The and Pell Grant recipient data were obtained from the Office of Postsecondary Education (OPE) at the U.S. Department of Education. These data are based on Pell Grant payments made to Title IV-eligible institutions. The data were provided to OPPORTUNITY by Steve Carter at OPE in two Excel spreadsheets. OPPORTUNITY will these two spreadsheets to subscribers upon request. In addition to these data we obtained and analyzed data on TRIO program participation from OPE at the Department of Education, and data on endowments recently reported by The Chronicle of Higher Education from NACUBO records. Graduation Rates for Pell Grant Recipients In January of 2000 OPPORTUNITY reported the results of our study of institutional graduation rates for Pell Grant recipients by institutional academic selectivity. This study used a data set compiled by Astin and his colleagues at UCLA's Higher Education Research Institute. This data set tracked college freshmen admitted in 1985 through graduation from the institution where they began their studies at 4, 6 and 9 years following entry. Astin's report from his analysis of these data is: Astin, A.W., Tsui, L., and Avalos, J. (September 1996). Degree Attainment Rates at American Colleges and Universities: Effects of Race, Gender, and Institutional Type. Los Angeles: Higher Education Research Institute, University of California, Los Angeles. Postsecondary Education OPPORTUNITY Page 3

4 Our analysis of this data set compared institutional graduation rates for Pell Grant recipients to students who did not receive Pell Grants. Additional controls were used for student SAT score and institutional academic selectivity. Our study showed that six-year institutional graduation rates (IGR) increased with SAT scores: 37.0 percent for those with SATs below 1000, 50.5 percent for those with SATs between 1000 and 1100, and 58.2 percent for those with SATs above When institutional academic selectivity was controlled Pell Grant recipients did better in more selective institutions than they did in less selective institutions: For Pell recipients with SATs of 1000 or less, IGRs were 32.3 percent at institutions practicing low admissions selectivity, 42.1 percent at institutions practicing medium selectivity, and 56.3 percent at highly selective institutions. For Pell recipients with SATs between 1001 and 1099, IGRs were 44.0 percent at institutions with low admissions selectivity, 52.2 percent at medium selectivity institutions, and 61.5 percent at highly selective institutions. For Pell recipients with SATs of 1100 or more, IGRs were 47.3 percent at institutions with low selectivity, 51.7 percent at medium selectivity institutions, and 69.6 percent at highly selective institutions. Thus we concluded that for Pell Grant recipients access to academically selective universities and 4- year colleges was essential to their graduation from college with a bachelor's degree. Pell Grant Shares In the fall of 2001 there were 576,963 undergraduate students enrolled in the 50 best national universities. Among these students 103,183 received federal Pell Grants for the academic year. Thus the share of undergraduates with Pell Grants was 17.9 percent in Across the 50 best national universities the share of undergraduates with Pell Grants ranged from 6.8 percent at Harvard University to 35.1 percent at the University of California at Los Angeles. The best national universities with less than 10 percent of their undergraduates with Pell Grants in 2001 were: Harvard University 6.8% Wake Forest University 7.0% Princeton University 7.4% College of William and Mary 8.0% Washington University 8.0% University of Notre Dame 8.0% University of Virginia 8.6% Northwestern University 9.5% Johns Hopkins University 9.6% Brown University 9.7% University of Pennsylvania 9.8% Postsecondary Education OPPORTUNITY Page 4

5 All of these universities, except the University of Virginia, are private institutions. On all of these campuses less than 10 percent of the undergraduates come from the bottom half of the family income distribution. The best national universities with more than 20 percent of their undergraduates with Pell Grants in 2001 were: Univ of Calif/Los Angeles 35.1% Univ of Calif/Berkeley 32.4% Univ of California/Irvine 31.5% Univ of California/Davis 28.5% Univ of Calif/San Diego 28.3% Univ of Calif/Santa Barbara 24.8% Univ of Southern California 24.1% University of Florida 22.0% University of Washington 21.1% All of these universities except the University of Southern California are public universities. On these campuses anywhere from 1 in 5 to 1 in 3 undergraduates come from the bottom half of the family income distribution. The above table highlights the west coast commitment to the enrollment of low income students at the best national universities. All but one of these campuses are in west coast states (the single exception is the University of Florida). Moreover all of the top seven best universities are California universities. Clearly best universities in California are committed to the enrollment of students from families with incomes low enough to qualify for federal Pell Grants. Between 1992 and 2001 the total number of undergraduates at these 50 best national universities increased by 45,561 or by 8.6 percent. The number of Pell Grant recipients also increased, by 6,530, or by 6.8 percent. Subtracting Pell Grant recipients from the total, the number on non-pell undergraduates increased by 39,031, or by 9.0 percent. Because Pell recipient enrollment increased slower than total undergraduate growth between 1992 and 2001 the share of undergraduates with Pell grants declined, from 18.2 to 17.9 percent. However, the decline was not uniform across all 50 best national universities. In 17 universities the share of undergraduates with Pell Grants actually increased between 1992 and The best national universities with the largest increases were: Univ of Calif/San Diego +7.5% Univ of Calif/Los Angeles +6.3% Univ of California/Berkeley +5.5% Univ of California/Irvine +5.0% Univ of Calif/Santa Barbara +3.6% Cornell University +2.1% Harvard University +2.2% Tufts University +2.1% Postsecondary Education OPPORTUNITY Page 5

6 At one of the 50 best national universities the share of undergraduates remained the same. This was Dartmouth College. At the remaining 32 best national universities the share of undergraduate enrollments with Pell Grants declined between 1992 and The largest declines were at: New York University -10.6% Case Western Reserve Univ -8.8% Carnegie Mellon University -8.6% University of Chicago -5.9% Emory University -4.9% Univ of Wisconsin/Madison -4.7% Univ of Illinois/Urbana -4.2% Massachusetts Inst of Tech -3.9% Georgia Inst of Technology -3.7% Pennsylvania State Univ/UP -3.5% University of Michigan/AA -3.4% University of Rochester -3.1% Changing Enrollment Patterns Institutional enrollments constantly fluctuate up and down. These fluctuations are caused by external and internal forces. External forces include demographic changes, economic conditions, and the success of institutional competition for enrollments. Internal forces include marketing, admissions, financial aid and retention practices of institutions. The result of these external and internal forces is the observed enrollment for an institution at a point in time. Analysis of these fluctuations offers insight regarding the enrollment management practices of individual institutions. In particular we are interested here in the mix between undergraduates from low income families (Pell Grant recipients), and the enrollment of students from upper income families (non-pell Grant recipients). The total undergraduate enrollment and Pell Grant recipient data used in this analysis provides a straightforward way of examining the changing mix of undergraduate students from lower and upper income families at each of the 50 best national universities between 1992 and Basically total undergraduate enrollment equals Pell Grant recipients plus non-pell Grant recipients. Or, change in total undergraduate enrollment between 1992 and 2001 equals the change in Pell Grant recipients plus the change in non-pell Grant recipients. For all 50 best national universities Pell Grant recipients increased by 6,530 students between 1992 and The enrollment of non-pell Grant recipients increased by 39,031 students during the same period. The total undergraduate enrollment increase was 45,561 students. Postsecondary Education OPPORTUNITY Page 6

7 We have replicated this gross calculation for each of the 50 best national universities and then assigned these universities to one of four groups of universities: Group 1: Increased both Pell recipient and non-pell recipient enrollments (19 universities). Group 2: Increased non-pell but decreased Pell recipient enrollments (19 universities). Group 3: Decreased non-pell enrollments but increased Pell recipient enrollments (7 universities). Group 4: Decreased both Pell recipient and non-pell recipient undergraduate enrollments (5 universities). These universities are identified in the table on the following page. Group 1. These 19 universities increased their non-pell recipient enrollment by 18,718 undergraduate students between 1992 and They also increased their Pell Grant recipient enrollment by 8,818 students during the same period. Sixteen of these 19 universities increased their non-pell enrollments by more than their Pell Grant recipients enrollments. But three of these 19 universities increased their Pell Grant recipient by more than their non-pell recipient enrollment. These were: University of California/San Diego, University of California/Santa Barbara and Lehigh University. Group 2. These 19 universities increased their non-pell recipient undergraduate enrollment by 24,669 students between 1992 and At the same time these universities decreased their enrollment of Pell Grant recipients by 5,826 students. The 19 best national universities that shifted their enrollment mix from low-income to high-income students the most during this period were: New York University (5,622), Pennsylvania State University/ University Park (3,922), University of Illinois/Urbana (3266), University of Michigan/Ann Arbor (3,237) and University of Wisconsin/Madison (2,984). The Group 2 universities concern us the most. These 19 universities appear to be practicing enrollment management with objectives of revenue maximization and improved ranking among US News best national universities. They are clearly moving purposefully and aggressively away from enrolling the growing share of the country's population coming from low family income backgrounds. These institutions appear to have lost contact with demographic reality. Group 3. These seven best national universities have each lost enrollment of non-pell Grant undergraduate students and increased enrollment of Pell Grant recipient students. Their non-pell undergraduate enrollment decreased by a total of 3,310 students between 1992 and Their enrollment of Pell Grant recipients increased by a total of 4,312 students during this period. Group 4. These five best national universities lost both non-pell and Pell Grant recipient undergraduate enrollment between 1992 and Their non-pell undergraduate enrollment declined by 1,043 students, and their Pell Grant recipients declined by 764 students. Postsecondary Education OPPORTUNITY Page 7

8 Change in Pell and non-pell Undergraduate Enrollments in 50 Best National Universities 1992 to 2001 Non-Pell Enrollment (first number) Increase Decrease Pell Grant Recipient Enrollment (second number) Increase Group 1 National Universities: University of Florida (+5583,+758) Univ of California/Irvine (+2034,+1941) Univ of California/San Diego (+868,+1888) Univ of California/Davis (+2525,+1317) Univ of Calif/Santa Barbara (+508,+939) University of Washington (+2377,+1251) Yeshiva University (+778,+94) Rensselaer Polytechnic Inst (+772,+21) Tulane University (+674,+52) Washington University (+675,+23) Vanderbilt University (+575,+1) Univ of Southern Calif (+388,+186) Tufts University (+174,+124) Dartmouth College (+249,+30) Georgetown University (+181,+18) Lehigh University (+76,+102) Brandeis University (+154,+14) Brown University (+66,+27) Princeton University (+61,+32) Group 3 National Universities: Univ of Calif/Los Angeles (-387,+2068) Univ of Calif/Berkeley (-129,+1691) Johns Hopkins University (-338,+74) Duke University (-36,+109) Yale University (-10,+12) Cornell University (-1041,+206) Harvard University (-1369,+152) Decrease Group 2 National Universities: New York University (+4707,-915) Penn State University/Univ Park (+3333,-599) Univ of Michigan/Ann Arbor (+2776,-461) Georgia Inst of Technology (+1708,-153) University of Virginia (+1219,-69) Carnegie Mellon University (+1125,-290) Emory University (+984,-173) Columbia University (+743,-10) University of Chicago (+821,-111) University of Notre Dame (+655,-57) Univ of North Carolina/CH (+691,-142) Stanford University (+468,-5) University of Pennsylvania (+610,-162) University of Illinois/Urbana (+2332,-934) Wake Forest University (+390,-21) Univ of Wisconsin/Madison (+1627,-1357) College of William and Mary (+200,-52) California Inst of Technology (+42,-12) Case Western Reserve Univ (+239,-313) Group 4 National Universities: Rice University (-51,-26) Northwestern University (-143,-155) Massachusetts Inst of Tech (-92,-215) Boston College (-299,-62) University of Rochester (-458,-306) Postsecondary Education OPPORTUNITY Page 8

9 Low Income Equity Index Our analysis of the share of undergraduates with Pell Grants at each of the 50 best national universities includes here an indexed measure of that effort. This index compares the share of undergraduates with Pell grants at the institution to the share of undergraduates with Pell Grants in the state where the university is located. We have calculated this index score for every Title IV-eligible postsecondary institution in the United States. These scores are currently being prepared for posting to OPPORTUNITY's website on the State Reports page. Low Income Equity Indices have a mean value 100, meaning that an institution's share of undergraduates with Pell Grants matches the state share of undergraduates with Pell Grants. An index score below 100 means that the institution enrolls a smaller share of Pell Grant recipients than the state average, while an index score above 100 means that the share of institutional enrollments with Pell Grants is above the state average. Then, mainly to get institutions to understand the seriousness of their efforts, we have assigned letter grades to each institution based on their Low Income Equity Index score. The grading curve is: 140 and over A to A- 130 to B+ 120 to B 115 to B- 110 to C+ 90 to C 85 to 89.9 C- 80 to 84.9 D+ 70 to 79.9 D below 70 F Using this grading scale and the calculated Low Income Equity Indices for each of the 50 best national universities for 1992 and 2001, the following grades resulted: Grade A or A- 5 3 B+, B or B- 2 2 C+, C or C- 4 3 D+ or D 7 0 F Postsecondary Education OPPORTUNITY Page 9

10 This is to say the among the 50 best national universities as identified by US News 64 percent received failing grades in 1992, and by 2001 this had increased to 84 percent. Only three universities that had A grades in 1992 still held these grades in These three universities are: University of California/Los Angeles, University of California/Berkeley and University of California/ Irvine. Two universities dropped their A grades. The University of California/Davis dropped from an A grade in 1992 to a B grade by The University of Southern California dropped from an A grade in 1992 to a C grade by Only one of the 50 best national universities increased its grade between 1992 and The University of Washington increased its grade from D+ to C-. The number of the 50 best national universities receiving failing grades for their enrollment of students from low income families increased from 32 in 1992 to 42 by As a group the 50 best national universities received the F grade in both 1992 and While the proportion of postsecondary students in the United States with Pell Grants increased from 27.5 to 29.7 percent between 1992 and 2001, the proportion of undergraduates with Pell Grants in the 50 best national universities decreased from 18.2 to 17.9 percent. Pell Recipient Enrollment Targets We have calculated for each of the 50 best national universities the number of additional Pell Grant recipients each institution would have to enroll to get its Low Income Equity Index up to 100. That would earn the institution a solid C grade for enrolling its fair share of students from low income families in the state in which it was located. Only seven of the 50 best national universities exceeded their fair share efforts enrolling Pell Grant recipients in All are universities located in California. They are (with Pell enrollments beyond their fair share): Univ of Calif/Los Angeles +3,287 Univ of California/Berkeley +2,404 Univ of California/Irvine +1,672 Univ of California/Davis +1,358 Univ of Calif/San Diego +1,086 Univ of Calif/Santa Barbara +476 Univ of Southern California +322 For the remaining 43 of the 50 best national universities their Low Income Equity Indices fall below 100. None of the 43 institutions are enrolling the state share of Pell Grant recipients. Thirty of these universities would have to more than double the number of Pell Grant recipients to raise their Low Income Equity Indices to 100, and several would have to quadruple their enrollment of Pell recipients to reach an index of 100. Postsecondary Education OPPORTUNITY Page 10

11 The 43 national best universities with numeric deficits of Pell Grants recipients compared to their state shares tend to be the largest universities. Very often these are public institutions. These 43 national universities with their Pell Grant recipient deficits for were: University of Florida -4,003 New York University -3,724 Pennsylvania State Univ/UP -3,544 Univ of Michigan/Ann Arbor -3,293 Cornell University -2,986 Univ of Wisconsin/Madison -2,826 Georgia Inst of Technology -2,767 Univ of North Carolina/CH -2,627 Univ of Illinois/Urbana -2,580 University of Pennsylvania -2,251 University of Virginia -2,182 University of Notre Dame -1,784 Tulane University -1,783 Emory University -1,615 Columbia University -1,587 Vanderbilt University -1,439 Washington University -1,427 Northwestern University -1,382 Harvard University -1,300 Duke University -1,218 University of Washington -1,021 Rensselaer Polytechnic Inst -1,002 Boston College -950 Wake Forest University -942 Carnegie Mellon University -933 University of Rochester -930 College of William and Mary -920 Princeton University -893 Johns Hopkins University -840 Georgetown University -801 Brown University -798 Lehigh University -764 Stanford University -754 Yeshiva University -688 Case Western Reserve Univ -613 University of Chicago -494 Rice University -490 Tufts University -471 Dartmouth College -459 Yale University -418 Massachusetts Inst of Tech -332 Postsecondary Education OPPORTUNITY Page 11

12 Brandeis University -208 California Inst of Tech -64 TRIO Programming An independent measure of the commitment of universities to the support of students from low income families is their engagement with federal TRIO programs. Currently there are 2,617 TRIO programs serving 859,228 low income/first generation students in the U.S. Title IV of the Higher Education Act of 1965 authorizes federal initiatives to increase higher education enrollments for students from low income families. The major and most visible part of Title IV authorizes most federal students financial aid programs including Pell Grants, Supplemental Educational Opportunity Grants, Work-Study, and the several federal educational loan programs. The other portion of Title IV authorizes of early outreach and supportive services programs. These are called TRIO programs and all are targeted on students from families with incomes below 150 percent of the federal poverty level where neither parent graduated from college with a bachelor's degree. These programs are: Talent Search. To identify and encourage people between the ages of 11 and 27 to complete high school and pursue postsecondary education and to provide financial aid information. Mainly for junior and senior high school students. Upward Bound. To provide instruction, counseling, academic advice, exposure to cultural events and academic programs, career options, etc. For people between 13 and 19 years, but mainly those in 9th through 12th grades. Student Support Services. To increase college retention and graduation rates, transfer rates, foster institutional climate supportive of low income and first generation students. For undergraduates enrolled in college. Educational Opportunity Centers. To provide financial and academic information and assistance to people college. For adults 19 and over who are not enrolled in postsecondary education. McNair Scholars. For undergraduates to help prepare them for doctoral studies. Currently there are 2,617 TRIO programs providing outreach and educational services to 859,228 participants, according to the Office of Postsecondary Education. The data by program are as follows: TRIO Program Programs Students Talent Search ,241 Upward Bound ,324 UB/Math-Science 123 6,093 Student Support ,387 McNair Scholars 179 4,118 Educ Oppo Cntr ,065 Total 2, ,228 Postsecondary Education OPPORTUNITY Page 12

13 The 50 best national universities had a total of 69 TRIO programs among them. 24 of these universities had none. Among the remaining 26 universities with at least one TRIO program, the leaders were: Pennsylvania State Univ/UP 7 Univ of California/Berkeley 6 University of Pennsylvania 6 Univ of California/San Diego 5 Univ of Southern California 5 University of Washington 5 Univ of California/Davis 4 What stands out here are the 24 best national universities partaking generously in the Title IV student financial aid programs, but completely absent engagement in the other Title IV programs of outreach to and support of students from low income families. These universities appear to be in Title IV for the federal money only and lack any apparent institutional commitment to also provide Title IV outreach and supportive services for low income students. Every one of these 24 universities received an F grade for Low Income Equity Index measuring their commitment to the enrollment of students from low income families in their state. These 24 universities are: Brown University, Rhode Island California Inst of Tech, California Carnegie Mellon Univ, Pennsylvania Coll of William and Mary, Virginia Cornell University, New York Dartmouth College, New Hampshire Duke University, North Carolina Emory University, Georgia Georgetown University, Dist of Col Georgia Inst of Technology, Georgia Harvard University, Massachusetts Johns Hopkins Univ, Maryland Lehigh University, Pennsylvania New York University, New York Northwestern University, Illinois Princeton University, New Jersey Rensselaer Poly Inst, New York Rice University, Texas Tufts University, Massachusetts Univ of Michigan, Michigan Vanderbilt University, Tennessee Wake Forest Univ, North Carolina Yale University, Connecticut Yeshiva University, New York Postsecondary Education OPPORTUNITY Page 13

14 Endowments Collectively these 50 best national universities held $119,637,000,000 in endowments in 2002, according to the Chronicle of Higher Education (23 January 2004). On the whole these are the wealthiest universities in the United States. In 2002 these 50 universities held 54 percent of the total of $222 billion in endowments. The remaining 667 institutions held the remaining 46 percent of institutional endowments. The best national universities with the endowments of more than $2 billion at the end of 2002 were: (000,000) Harvard University $17,170 Yale University $10,524 Princeton University $8,320 Stanford University $7,613 Massachusetts Inst of Tech $5,359 Emory University $4,552 Columbia University $4,238 Univ of California/Berkeley $4,199 Washington University $3,517 University of Pennsylvania $3,393 Univ of Michigan/Ann Arbor $3,376 University of Chicago $3,255 Northwestern University $3,023 Rice University $2,940 Duke University $2,927 Cornell University $2,854 University of Notre Dame $2,554 Dartmouth College $2,187 Univ of Southern California $2,131 Vanderbilt University $2,020 Of these 20 best national universities with the largest endowments all but two received F grades based on their Low Income Equity Index. The exceptions were California universities: UC/Berkeley and USC. Recent Initiatives Several of these 50 best national universities--all eastern universities--have recently announced initiatives to assist students from low income families to pay college attendance costs at their institutions. These include: Princeton University. Announced in January of 2001 that it would replace all loans with grants for undergraduates on financial aid. Postsecondary Education OPPORTUNITY Page 14

15 University of North Carolina/ Chapel Hill. Announced the Carolina Covenant in September 2003 that low income students will graduate debt-free if they work 10 to 12 hours per week. Financial need will be met with grants and scholarships. Harvard University. Announced in February 2004 that EFCs would be zero for students from families with incomes below $40,000, and reduced for students from families with incomes up to $60,000. Few published details yet. University of Virginia. Announced in February 2004 that it would cap loans for students from families with incomes below 150 percent of the poverty level at 25 percent of the cost of education. Other universities, particularly the West Coast universities, appear to have been practicing these initiatives for many years. Most of the recent initiatives have focused on financial aid, which aids those enrolled, but not admissions which could increase the number of students from low income families. Harvard's initiative is broader, including recruiting, admissions and a high school summer academy. Conclusions As a group the 50 best national universities received an F for their enrollment of students from low income families in of the 50 best national universities received F grades. Most of these universities are highly exclusive, class selective enclaves for students who were born into families with very high incomes. Most of these universities are ivory towers in both academic and social meanings of the term. As a group these best national universities also received an F for their efforts in of these 50 best national universities received F grades in All 32 retained their F grades between 1992 and Ten additional universities reduced their grades from C or D to F between 1992 and The overall efforts of the 50 best national universities to enroll students from low income families deteriorated between 1992 and While the share of all undergraduates in the U.S. with Pell Grants increased by 2.2 percent between 1992 and 2001, the share of undergraduates with Pell grants at the 50 best national universities decreased by 0.3 percent. Most of these universities were disengaged from enrolling students from low income families, and they have become even more so. The demographic reality of the country and nearly every state is that a growing share of the children headed for higher education come from low income family backgrounds. The proportion of K-12 school children approved for free or reduced price school lunches under the National School Lunch Program increased from 37.4 percent in FY1993 to 40.8 percent by FY2001. These children live in families with incomes below 185 percent of the federal poverty level. Postsecondary Education OPPORTUNITY Page 15

16 Recent projections of high school graduates by WICHE show that the number of white non- Hispanic high school graduates will decline by 11 percent between 2002 and During this time frame the number of Hispanic high school graduates will increase by 103 percent, blacks will increase by 10 percent, Asian/Pacific Islander will increase by 73 percent and American Indians will increase by 27 percent. These minority groups typically have median family incomes about half those of the white non-hispanics they are replacing in the population. Changing demographics require higher education to adapt to these newer populations from lower family incomes. Our national economic and social health require this. The continuously escalating educational attainment requirements of the American economy require special efforts to reach out and serve these lower income populations to meet our need for a college educated workforce to support the Human Capital Economy. The same argument applies to institutions: their exclusion policies and practices homogenize student bodies and segregate their students from the diversity opportunities and challenges that they will face when they leave the academic enclaves. The opportunity to learn in an enriched and diverse environment is diminished in these segregated communities. Most of our best 50 national universities are disengaged from this national imperative to reach out and include students from low income families on their campuses. Instead of reaching out to these new lower income populations our best 50 national universities are turning away from enrolling these students. Fortunately the west coast universities--particularly in California--have shown that it is possible to be both excellent and economically inclusive. Apparently only west coast universities understand and practice social inclusion: the only universities with Low Income Equity Indices greater than 100 are six campuses of the University of California plus the University of Southern California. The next two universities are the University of Washington and Cal Tech. The practice of social inclusion among our best national universities is limited to the west coast states of the United States. In the rest of the United States our best national universities practice social exclusion. The next question is: In whose interest are these universities operating? Is it a public interest? Or are these exclusive universities run more like private businesses? In our view these exclusive national universities are so divorced from the public interests of demographic inclusion and expanding human capitalization that they are, at best, only marginally socially relevant. They operate more as businesses focused on profits (called endowments in higher education), with sophisticated enrollment management operations designed to maximize institutional revenues and improve institutional rankings in the U.S. News ranking of American colleges and universities. A fundamental investment principle is return-on-investment. Resources, which are always limited, are allocated to maximize economic or other returns to the investor. Businesses allocate resources to maximize investment returns to the business. Individuals do the same. The same return-on- Postsecondary Education OPPORTUNITY Page 16

17 investment principle applies to social investments. Government resources must be carefully targeted to maximize returns on these investments to society. We think that most of the best national universities are so focused on their own welfare and profits and are so divorced from serving public demographic and human capitalization interests that their continued eligibility for social investment should be reconsidered by governments. Specifically we believe: State governments should reallocate higher education investments to target state resources on institutions and programs that are serving the new demographics of their states and that increase the state's human capital. The federal government should reconsider institutional eligibility for federal student financial aid programs at those institutions that serve the fewest students from low and lower middle income families. The limited dollars available should be focused on institutions that serve students that need these resources to finance their higher educations. Both state and federal governments should revoke tax-exempt status for institutions that operate mainly as for-profit businesses and have accumulated excessive endowments while failing to enroll significant numbers of low income students. Postsecondary Education OPPORTUNITY Page 17

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