Higher education is reinforcing not reducing inequality

by Suzanne Mettler, Cornell University, published in News and Observer, March 8, 2014.

Is higher education actually making inequality worse?

When the GI Bill of Rights of 1944 made colleges accessible to veterans regardless of socioeconomic background, Robert Maynard Hutchins, the president of the University of Chicago, worried that it would transform elite institutions into “educational hobo jungles.” But the GI Bill was only the first of several federal student aid laws that, along with increasing state investment in public universities and colleges, transformed U.S. higher education over the course of three decades from a bastion of privilege into a path toward the American dream.

Something else began to happen around 1980. College graduation rates kept soaring for the affluent, but for those in the bottom half, a four-year degree is scarcely more attainable today than it was in the 1970s. And because some colleges actually hinder social mobility, what increasingly matters is not just whether you go to college but where.

The demise of opportunity through higher education is, fundamentally, a political failure. Our landmark higher education policies have ceased to function effectively, and lawmakers – consumed by partisan polarization and plutocracy – have neglected to update them.

More Americans than ever enroll in college, but the graduates who emerge a few years later indicate that instead of reducing inequality, our system of higher education reinforces it. Three out of 4 adults who grow up in the top quarter of the income spectrum earn baccalaureate degrees by age 24, but it’s only 1 out of 3 in the next quarter down. In the bottom half of the economic distribution, it’s fewer than 1 out of 5 for those in the third bracket and fewer than 1 out of 10 in the poorest.

That’s before we even begin differentiating by type of college. Higher education is becoming a caste system, separate and unequal for students with different family incomes. Where students attend college affects their chances of graduating and how indebted they will become in the process.

Private nonprofits, schools like Stanford or Vassar, list the highest “sticker prices,” but the average student pays less than half of full fare. Some nonprofits provide generous need-based aid to low- and middle-income students, supplementing their federal aid. Others devote their resources instead to merit-based aid, courting students with high SAT scores, typically from higher-income backgrounds.

Nearly three-quarters of U.S. college students attend public universities and colleges, historically the nation’s primary channels to educational opportunity. These institutions still offer the best bargain around, yet even there, tuition increases have bred inequality. For those from the richest fifth, the annual cost of attending a public four-year college has inched up from 6 percent of family income in 1971 to 9 percent in 2011. For everyone else, the change is formidable. For those in the poorest fifth, costs at State U have skyrocketed from 42 percent of family income to 114 percent.

The worst problems, though, occur at for-profit schools like those run by Apollo Group (which owns the University of Phoenix), Education Management Corp. or Corinthian Colleges. These schools cater to low-income students and veterans, but too often they turn hopes for a better life into the despair of financial ruin.

Nearly all of their students take out loans to attend, and the amounts are staggering. Among holders of bachelor’s degrees, 94 percent borrow. They take on median debt of $33,000 per student, compared with just $18,000 at the nonprofits and $22,000 at the publics. The for-profit graduates have trouble finding jobs that pay enough to afford their debts, and 23 percent of borrowers default within three years, compared with just 7 percent from nonprofits and 8 percent from publics.

Just when having a highly educated citizenry is more important than ever, how could we be failing so miserably at achieving it? It’s not as simple as politicians’ terminating laws or gutting funding. Federal student aid has actually increased considerably since 2007. But government has abdicated its leadership role.

• First, federal student aid has become less effective in promoting opportunity. In the 1970s, the maximum Pell grants for low-income students covered nearly 80 percent of costs at the average four-year public university, but by 2013-14 they covered just 31 percent. Presidents beginning with Bill Clinton introduced costly new tax policies to help with tuition, but these have failed to improve access for the less well off.

• Second, state governments, burdened by the growing cost of Medicaid, K-12 education and prisons, let higher education funding dwindle. Spending per full-time public student fell by an average of 26 percent in real terms between 1990-91 and 2009-10.

• Third, Congress, by loosening regulations, permitted for-profit colleges to thrive on the government’s dime. These schools, which enroll nearly a 10th of college students, use nearly a quarter of federal student aid dollars allocated through Title IV of the Higher Education Act of 1965, and they account for nearly half of all student loan defaults.

Ordinary young Americans who hoped college could be their route to a better future are the victims of a perfect storm of political winds. It began with existing public policies that required routine maintenance being left to wither.

Plutocratic governance intensifies the dysfunction, as powerful industries still have the strength to bring politicians together across the aisle in a parody of true bipartisanship. The effect of polarized plutocracy is epitomized by Congress’ support for the for-profit colleges. In the House of Representatives, where Democrats and Republicans agree on almost nothing, they have united to protect $32 billion in taxpayers’ money for the for-profit college industry.

Is this who we are as a nation? Tougher regulations of the for-profits, long overdue, are the quickest way to help the poorest Americans who seek college degrees. Unless we can claw back polarization and plutocracy enough to restore opportunity in higher education, the United States will become a society in which rank is fixed and our ideal of upward mobility but a memory.

The New York Times

Suzanne Mettler is a professor of government at Cornell University.