Board members who want to be great stewards of the institutions they are entrusted to lead—today and into the future—must ensure two things: that they truly understand what the numbers say about their institution’s contributions to restoring opportunity in America and that they have capable leadership teams in place committed to aggressively expanding that contribution over time. In the end, it is a matter of leadership at every level.
The United States: Two Powerful Stories
As Americans, we tell each other—and the world—two very powerful stories about who we are as a nation. The first is that we are the land of opportunity. That, whether your parents were born in a village in México or in the hollers of West Virginia, you can become anything you want to be if you work hard enough.
The second is a story of constant, intergenerational advancement. That, through saving and hard work, each generation of American parents can secure a better education—and a better future—for their children.
These stories are powerful. They are pervasive. And they are fast slipping away.
Within the United States, income inequality has been rising. Over the past 30 years, annual earnings among families in the top 20 percent grew by 51 percent, with the top 5 percent seeing an even larger increase of 79 percent. Meanwhile, earnings among families in the bottom 20 percent actually declined: together, the bottom fifth of households today take home only 3 percent of national income. Now, instead of being the most equal nation on earth, the U.S. is one of the most unequal, with the third-highest income inequality among OECD countries. Only Chile and Mexico are worse.
Recent economic forces have hit African-American and Latino families especially hard. Median income for these families is less than 60 percent of the median for white and Asian families, and poverty rates are more than twice as high. There are big differences, too, in household wealth. The median wealth of white families is now 17 times that of African Americans and 13 times that of Latinos.
The issue is not just growing gaps in income and wealth, but growing problems with social mobility, as well. Of course, there have always been some Americans for whom opportunities are not equal. We were working on that as a nation, though, and the obstacles to upward mobility were getting smaller over time—until 1980. Since then, economic mobility has fallen precipitously.
Now, instead of being the country in which, if you’re born poor, you have the best chance of escaping poverty through hard work, the U.S. is essentially tied with Italy and Great Britain as the developed countries where the odds of escaping poverty are the worst. Indeed, in a sad irony, children born poor in Canada today are now more likely to realize the American Dream than those born poor in the United States.
What this tells us is that the rungs on the ladder upward in America are now getting further and further apart, and the upward climb is getting harder and harder.
Education: Not the Only Answer, But a Big Part
At the macro level, better and more equal education certainly isn’t the only answer to turning these patterns around and returning the United States to the principles we hold dear. There are many things that enlightened public policy could do to reduce inequality and smooth the path upward.
But at the individual level, quality education— especially a college education— is the only way up. The facts are brutal. Without a college degree, 45 percent of those born poor in the United States will remain poor as adults. But with a college degree, this rate plummets to 16 percent. As Bhashkar Mazumder of the Federal Reserve Bank of Chicago said in a recent report, “Among those who have finished four years of college, there is no racial gap in economic mobility: both whites and blacks in this group experience very high rates of upward economic mobility.”
For African-American males, the consequences of not getting an education are even starker. Without a high school diploma, these young men have a 68 percent chance of being imprisoned by age 34. With a high school diploma, imprisonment rates fall to 21 percent; with a college degree, they plummet to 7 percent.
But degrees have important consequences for young people of all sorts. College graduates earn more. They are less likely to be unemployed. They also stand out on other things that we as a society value. They are more likely to vote, more likely to volunteer, more likely to make choices that contribute to good health, and even more likely to have good mental health.
There is, in other words, essentially one road up in America today. And that road runs through education.
Over the past 40 years, we have made great progress on college access. As is clear in Figure 1, college-going rates are rising for every major racial and ethnic group. And they are going up for students at all income levels, as well. College-going among low-income high school graduates, for example, climbed from 23 percent in 1972 to 49 percent in 2013.
Despite this progress, low-income students today still enroll at a rate lower than high-income students did in the mid- 1970s. And, while Latino high-school graduates now enroll in college at the same or slightly higher rates than white students, college entry rates for African- American high-school graduates still lag behind.
There is also a serious question about access to what. For, as the data in Figure 2 show, Latino, African-American, and lowincome college students are more likely than other students to enroll in for-profit and two-year colleges, the very institutions from which they are least likely to emerge with that all-important bachelor’s degree— and, in the case of for-profits, most likely to end up with significant debt.
Access, of course, is only the first step. What do success rates look like? Not so pretty.
Among students who begin at fouryear institutions, six-year graduation rates for white students (63 percent) are more than 20 points greater than for African- American students (40 percent) and 11 points greater than for Latino students (52 percent). There are gaps, too, in the graduation rates of low-income students and their more-advantaged peers. Though the gaps within individual institutions are often smaller than in the sector as a whole—around 5.7 percent—Pell students graduate at a rate 14 points below non-Pell students.
At two-year colleges, the numbers are worse. Far fewer Latino (18 percent), Native-American (18 percent), and African-American (13 percent) freshmen in our community colleges earn a certificate or degree within three years than white students (24 percent) or Asians (28 percent). And if you ask the all-important question—how many of the students who begin in two-year colleges with a goal of earning a bachelor’s degree actually earn that degree?—the answer is a dismal 14 percent.
One of the reasons that the dream of a college education as a path to the middle class is eroding is the skyrocketing price of each year of college. Certainly, a significant cause for rising tuition at public colleges and universities is declining state funding for higher education relative to expenditures incurred. Since 1989, state support per FTE (full-time equivalent) has declined 24 percent, and students are picking up more of the costs once largely covered by the taxpayer. The causes in the independent sector are different, including shrinking subsidies. But in both sectors, many students have to take out large loans. Borrowers in the class of 2013 owed an average of $28,400 in federal and private loans, and student loan debt is now hovering at $1.3 trillion.
Burdens fall particularly heavily on students from low-income families. Even after grant aid from all sources is included, they must find a way to finance an amount equivalent to 76 percent of their family income, while the highestincome students have to set aside only 17 percent of their family income.
Add it all together and what you end up with is very different degree-acquisition rates for different groups of young Americans. For every 100 white kindergartners, roughly 90 end up with a high school diploma and, of those, 40 get at least a bachelor’s degree. But the bachelor’s numbers for African-American students are roughly one-half those of white students, and they’re even worse among Latinos. In 2014, 15 percent of Latinos and 22 percent of African Americans ages 25–29 held at least a bachelor’s degree.
There is also a large gap in degree attainment by family income. Students from high-income families are roughly three times as likely as students from low-income families to obtain a bachelor’s degree 8 years after leaving high school. While 54 percent of young people from the highest income quartile are able to earn a bachelor’s degree, only 17 percent of young people from the bottom income quartile do the same.
This story of unrealized aspirations has devastating consequences, both for students and for our country. Left unchecked, these patterns threaten the very health of our democracy. But even for those who don’t spend a lot of time worrying about democratic participation and social cohesion, we should all worry about these numbers, given which demographic groups are growing and which are not.
Already, there has been huge growth among the groups we in higher education have long called “underrepresented minorities,” with these students now a majority in many states. But there is more change to come. By 2050, Latino youths are projected to grow by 137 percent (an increase of 31 million), Asians by 96 percent (4.4 million), and African Americans by 15 percent (2.3 million). Meanwhile, the population of white youths is projected to shrink by 9 percent (5.5 million).
These patterns begin to explain why the United States, long number one in the world in the percentage of all adults with at least a bachelor’s degree, has fallen to fifth. And among young adults, our international position drops to eleventh (Figure 3).
What’s Behind These Patterns?
There are many within higher education who would like to believe that these patterns are mostly about two things: lousy high schools and stingy policymakers.
It is important to acknowledge that they are not all wrong. Low-income students and students of color continue to be herded disproportionately into low-quality schools where we spend less on their education ($1,200 less per student in high-poverty districts and $2,000 less per student in high-minority districts), expect less of them, deliberately teach them less, and assign them our least-experienced and least-well-educated teachers.
While we have made progress in recent years in turning around longstanding achievement patterns in our elementary schools, substantially shrinking gaps among groups, we have not yet turned the corner in our high schools. In other words, poor preparation is part of the problem.
So, too, are short-sighted decisions among federal and state policymakers. College costs, as most governing board members know, have been going up very fast—far faster than inflation and family income. And the Pell Grant, long the mainstay of college affordability for lowincome students, just hasn’t kept up. That grant once covered about three-quarters of the cost of attendance at a four-year college; today, it covers only about one-third.
What’s important to understand, though, is that this is not because the federal government isn’t spending a lot more money on student aid. Actually, government spending on aid has gone up at close to the rate of college costs. What has changed is who those dollars are spent on, with a growing fraction of aid dollars—especially in the tax programs— spent not on low-income students but on students from families much higher up on the income ladder. And the same is true of state spending on student aid, as well, with growing fractions of aid dollars spent on students with little or no financial need. So, yes, government policies are part of the problem.
Institutions Shrink Opportunities, Too
What is critical for every board member to understand, however, is that colleges and universities themselves—through the choices they make, and the actions they take—turn out to be critical actors in this drama of shrinking opportunity as well.
For one thing, most colleges and universities have their own aid dollars—often referred to as “institutional aid.” And the shift here—away from students with the most need to those with less need or no need at all—has been more pronounced than the shift in government aid.
In 2011, the most recent year for which full data are available, four-year public and independent nonprofit colleges spent a total of $21 billion in institutional-aid dollars. And they spent a lot of those dollars on students with no financial need whatsoever.
Back in 1995, public institutions spent considerably more aid dollars on students in the bottom quintile of family income than they did on students from the top quintile of family income. Today, they spend more on their wealthiest students than their poorest: $869 million vs. $809 million. The same pattern is true in independent, nonprofit institutions, which used to spend more on their poorest students than their richest, but now spend more than 50 percent of aid dollars on their wealthiest students.
So it’s not just lousy high schools and stingy policymakers. Colleges and universities themselves have a big impact on who enrolls and who doesn’t.
Institutional choices also turn out to have a significant impact on who graduates and who doesn’t. Our organization has spent the last eight years studying graduation rates from American colleges— and building a tool, College Results Online, that board members and others can use to see how their institution performs compared to other institutions that serve the same kinds of students.
What have we learned from all of this? It’s true that things like selectivity, student academic preparation, and family income matter. But when you compare institutions that serve exactly the same kinds of students, some consistently outperform others in terms of completion rates, both overall and for particular groups of students. Indeed, among otherwise similar institutions, graduation rates can vary by as many as 20 percentage points, and graduation rates for Latino or African- American students by even more.
Institutions that prioritize student success do better. Period. And those that focus particular energy on underrepresented groups of students do better by them.
So What Can Concerned Trustees Do?
Below are 10 questions that board members can ask to understand whether their institution is an engine of opportunity—or an engine of inequality, with very few students from working-class or low-income families.
1. How well do our entering freshmen reflect state (or regional) demographics? Every board member should understand whether the students enrolled in their institutions represent the racial and economic diversity of their regions. Campus administrators should be asked to provide data comparing first-year students with the demography—both racial and economic—of the previous year’s high-school graduating class.
2. How well do our entering transfer students reflect local demographics? Generally, entering transfers can be compared either with local community college enrollments or, even better, with the population of young adults with at least a high-school diploma. These data are typically readily available from public sources.
3. What do trend data tell us? Are we getting closer over time? Often, moreselective institutions will have some distance to go. Board members will want to make sure both that their institutions have goals to close any gaps and that they are directing resources to that end.
4. What do our graduation data look like? In isolation, it is difficult to tell if an institution’s graduation rate is “good” or “bad.” We suggest you ask for comparative data from similar institutions. Or, if you want some independent data, take a look at College Results Online, which provides data for the institutions “most similar” to yours.
5. What about graduation rates for different groups of students, especially Latino, African American, Native American, and Pell Grant recipients? On average, graduation rates for these students lag behind those of other students. But many institutions across the country have tackled those longstanding patterns and reduced their gaps to zero, while also expanding access. Your institution should be working on that.
6. What do our year-to-year retention data look like for different student groups? Even more important, how many of the students returning for a second year are returning with sophomore status? College leaders don’t change their four- or six-year graduation rates by focusing on their graduation rates. They focus on success— and especially credit accumulation— all along the way. Raising the numbers of students completing 30 credit hours that first year is the fastest route to better on-time graduation rates.
7. How many of our students—both overall and by group—are taking more than four years to graduate, and why? The current propensity to report six-year graduation rates has obscured an expensive problem, both for students and for universities. Focused efforts can drive those numbers down.
8. Do particular courses contribute disproportionately to student failure? Which courses have the highest D, F, and withdrawal rates, and what are we doing to improve student success? Though most institutions offer hundreds (or thousands) of undergraduate courses, research by the National Center for Academic Transformation has found that the 25 largest courses account for 35 percent of undergraduate enrollments—and the lion’s share of student failures. But by redesigning those courses and keeping standards high while focusing on student success, campus leaders have been able to radically reduce failure rates.
9. Do administrators and faculty have ready access to real-time data to help them improve student success? Data are extremely important in aiding decision making and intervening immediately when students are going off-track. But most institutions spend more energy organizing data for compliance than they do to support student success. The latter must be a high priority.
10. How are we spending our institutional- aid dollars? How does the burden on our lowest-income families compare with the burden on our highest-income families? Ability to pay can be a significant hurdle to college access, student persistence, and degree completion. Board members should ask what percentage of institutional aid is need-based. After accounting for all grant aid, how much money do lowincome students still have to come up with—from loans, work, or parental contributions—and how does that stack up against their average annual household income? That is, do they have significant levels of unmet need? How does the net price that lowincome students pay compare to what more affluent students pay?
Getting answers to these 10 questions won’t tell you everything you need to know about whether your institution is expanding opportunity in America or simply reinforcing current inequities. But it will give you a good start. Beyond the numbers, though, you’ll want to assess the commitment and energy that your campus leaders are bringing to these issues.
Improving student success is not mostly about adding a few programs here and there. It’s about creating a culture that prioritizes student success. Over the years, we have learned that what institutional leaders across the country do matters greatly in creating that culture. Presidents and provosts are particularly important. Those who put student success at the top of their agenda and engage faculty as problem solvers will likely move both access and success numbers in the right direction. And, if a culture that prioritizes student success is nurtured and embraced, then these values will endure far beyond any one president or provost who comes and goes.