PAYSCALE: Rich Kids Graduate From College, Poor Kids Don’t

Career College Central Summary:

  • Getting a college education increases a person's income earning potential. In 2013, Americans whose households made over $108,650 in 2012 were more than eight times more likely to have graduated from a bachelor’s-degree program than Americans whose households made less than $34,160. Go back to 1970, and the higher-income group was five times more likely to have earned a bachelor's degree. The trend indicates that a college education has become more and more important to financial health and success. The problem is that the high cost of education makes finishing a bachelor's degree much harder for the nation's poorest students.
  • Who Goes to College

    • The good news is that more economically disadvantaged students are entering college. According to a Pell Institute report on higher education, in 1970 only 28 percent of Americans in the lowest income range mentioned above and between the ages of 18 to 24 attended college. By 2012, that number increased to 45 percent. This is less than half, but an improvement. The problem seems to be, however, that they are not graduating with a bachelor's degree.
  • Equity Indicators

    • The Pell Institute report found six indicators of inequity that contribute to lack of attainment of a bachelor's degree by the less wealthy.
    • 1. Who enrolls in postsecondary education?

      • As we've discussed above, rich kids are more likely to enroll. This may be for the obvious reason that higher education is expensive, and wealthier parents are more likely to be able to help pay tuition. 
    • 2. What type of postsecondary educational institution do students attend?

      • Lower-income students are more likely to attend either for-profit or public two-year institutions; higher income students are more likely to attend doctoral granting institutions. If the lower-income students graduate with an associate's degree, they may or may not choose to enroll as an upper-division student at a four-year university in order to attain a bachelor's degree. 
    • 3. Does financial aid eliminate the financial barriers to paying college costs?

      • The report found that average tuition and fees at colleges and universities in the U.S. more than doubled in constant dollars since 1970, rising from $9,625 in 1970 to $20,234 to 2012-13. Relative to the average cost of attendance, the maximum Pell Grant peaked in 1975 when the maximum Pell Grant covered two-thirds (67 percent) of average costs. The maximum Pell Grant covered only 27 percent of costs in 2012, the lowest percentage since 1970. So financial aid is less and less helpful, therefore making a college education less and less attainable for the less wealthy. 

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PAYSCALE

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