Study: Bachelor's degree gap furthers the income gap

Low income students stuck in a 'continuous cycle'

In the past 45 years, the degree-gap between children from high-income and low-income families has grown wider, which has furthered the wealth divide, according to a new study.

Researchers from the Pell Institute for the Study of Opportunity in Higher Education and the University of Pennsylvania Alliance for Higher Education and Democracy (AHEAD) examined the educational achievements of students 18-to-24-years-old from different income brackets based on federal education and population data.

In 2013, college students that came from the highest income brackets (those from households that earned $108,650 in 2012) were eight times more likely to earn a bachelor's degree than students from the poorest families (those from households earning less than $34,160 in 2012).

High school wealth best predicts college enrollment—and persistence

From 1970 to 2013, the rate of bachelor's degree attainment in the wealthiest families jumped from 40% to 77%, while the bottom quartile of earners has seen that rate barely grow from 6% to 9%.

The difference cannot be explained by college enrollment rates—the gap in that area has actually narrowed. Over the same time period, the difference of college participation in the wealthiest and the poorest households narrowed from 48 percentage points to 36.

The more likely driver is a gap in completion and graduation rates. In 2013, 99% of the wealthiest students enrolled in college earned a bachelor's degree—compared with 55% in 1970. Conversely, attainment remained at 21%—essentially the same rate as in 1970—for those from the lowest income bracket.

Who are the low-income students?

Compared with students that come from the nation's highest income brackets, the cohort of poor students is more likely to live at home, be older, balance competing responsibilities, receive less financial support from their family, and attend two-year institutions without transferring to earn their bachelor's, according to a 2008 Pell Institute report.

"We sometimes think that low-income students are taken care of because of the federal program. But you can see it covers so much less than when it was first established," says Margaret Cahalan, co-author of the new study and director of the Pell Institute.

How to drive low-income, high-ability student enrollment at elite schools

The report found low-income students were also underrepresented at top universities and colleges, which have better retention and graduation rates.

Tuition up, affordability down

Affordability has plummeted. From 2003 to 2012, state funding to university systems dropped and tuition increased. From 1970 to 2013, the average cost of tuition and fees more than doubled, according to the new report.

"The disinvestment of state funds for public colleges and universities occurring since the 1980s and the declining value of federal student grant aid have all aided in the creation of a higher education system that is stained with inequality," write co-authors Laura Perna, executive director of AHEAD, and Cahalan.

Federal aid only goes so far as well. Pell grants covered 67% of average college expenses in 1975, but just 27% in 2012.

"[N]owadays to get any decent job, you need a bachelor's degree," says first-generation college student Michael Kramer, 29.

However, for low-income students like himself, the cost can force a decision between higher education and basic needs like food and housing, creating a "continuous cycle," he says (Armario, AP/Boston Globe, 2/4; White, The Atlantic, 2/5).

The takeaway The growing cost of higher education has created a feedback loop: the poorest students struggle to earn their bachelor's degrees, which in turn keeps them from increasing their wages . Read more about how to support low-income, high ability students here.

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