SPECIAL REPORT

Pell Grants: The Cornerstone of African-American Higher Education

The federal Pell Grant program provides more than $4 billion to African-American college students each year. Without the Pell Grant program, hundreds of thousands of young blacks would not be able to afford college.

While the Pell Grant program has been enormously successful in leveling the playing field in access to higher education, the number of Pell Grant recipients at the nation’s highest-ranked colleges and universities remains low. But the most recent data suggests that progress in increasing the number of low-income students on these campuses is beginning to take place.

Efforts to make college more affordable are of special and urgent concern to African Americans. The reasons are many:

•  The median income of black families in the United States is only 62 percent of the median income of white families.

•  The typical black family holds only one tenth the wealth of the average white family.

•  Blacks are three times as likely as whites to be poor.

•  African Americans are twice as often out of work as whites.

•  Many families use the equity in their home to finance their children’s higher education. But fewer than half of all black families own their home compared to more than three quarters of all white families.

Over the years these huge disparities in income and wealth have been a major factor in the extreme differences between the races in enrollments in higher education.

In an effort to level the playing field for African Americans seeking higher education, the importance of the federal Pell Grant program cannot be overemphasized. This federal grant program for low-income students is the life-blood for hundreds of thousands of African Americans seeking higher education. Without this important program, many black students would not be able to enroll in higher education. Hundreds of thousands of other blacks would have to go deeper into debt or hold down a job while attending college if it were not for the Pell Grant program.

Since 1976 federal Pell Grants, named after Rhode Island Senator Claiborne Pell who championed the cause of making college more affordable, have provided money for tens of millions of low-income students.  Pell Grants are awarded to undergraduate college students by the federal government based upon calculations of family size, income, and assets that could be used to finance education as well as projected tuition costs. About 90 percent of the 5.5 million Pell Grant recipients come from families with incomes below $40,000.

In the 2008-09 academic year, nearly 6.4 million students received Pell Grants. While students from the lowest income levels are eligible for awards of up to $5,350, the average Pell Grant in 2008-09 was $2,842. All told, the federal government gave out more than $18 billion in Pell Grant awards.

About 46 percent of all African-American undergraduate students receive federal Pell Grant awards. They account for approximately one quarter of all Pell Grant recipients. It appears that blacks received more than $4.5 billion in federal Pell Grants during the 2008-09 academic year. This is a huge sum of money that greatly eases the financial burden faced by more than 1 million black students each year.

Pell Grant Awards at Our Nation’s Leading Universities

For several years now JBHE has been tracking the percentage of low-income students at the nation’s leading colleges and universities. We believe that it is important to track the progress being made by these educational institutions in enrolling more low-income students as an indication of their overall commitment to increase diversity on their campuses.

There was a time in the early years of the nineteenth century when admissions officials at most Ivy League schools tended to have as much interest in the economic and social pedigrees of applicants as in their academic merit. Prior to World War II at America’s most selective private colleges and universities, there was little or no outreach for promising students from low-income and working-class families. But Harvard president James B. Conant, working in combination with the post-World War II G.I. Bill, brought this to an end. Harvard’s solid reputation for leadership in the education of low-income students was established by Conant’s famous paper, “Education in a Classless Society,” which was delivered as the Charter Day address at the University of California at Berkeley on March 28, 1940. Two decades later Yale president Kingman Brewster delivered solid support for Conant’s policies. In the mid-1960s, Brewster announced to the world that Yale would only become a first-class educational institution when it ceased to become “a finishing school on Long Island Sound” for the children of the nation’s economic elite.

In 1998 another landmark decision forever changed the opportunities for low-income students at the nation’s highest-ranked universities. That year Princeton University revolutionized college financial aid in the United States when it decided to provide full-tuition scholarship grants for all students from families with incomes below $40,000 a year. Soon afterward Princeton eliminated loans for all students on financial aid and replaced those loans with scholarship grants. A sea change has occurred at Princeton since the new program was announced. For the 1998 entering class at Princeton which graduated in 2001, 38 percent of the students received need-based financial aid. This fall 60 percent of the entering students at Princeton qualified for need-based financial aid.

After Princeton took the lead, Harvard, the University of Virginia, and the University of North Carolina at Chapel Hill soon eliminated student loans and greatly increased their financial aid packages for low-income students. This trend of eliminating student loans in favor of scholarship grants and increasing financial aid packages for low- and middle-income students has greatly accelerated in the ensuing years. Most highly rated universities and colleges have made significant changes to their financial aid programs in order to keep pace with efforts of the most wealthy institutions to attract more low-income students.

Low-Income Students Today at High-Ranking Universities

The latest data from the U.S. Department of Education shows that low-income students have a small presence on the campuses of most of the nation’s highest-ranked universities. At the University of California at Berkeley and the University of California at Los Angeles, low-income students make up more than 31 percent of all students. At none of the other universities ranked in the top 30 academically in the nation do low-income students make up as much as 17 percent of the student body.

Among the 30 highest-ranked universities, Washington University in St. Louis has the lowest percentage of students who receive Pell Grants. Wake Forest University, the University of Virginia, and the University of Notre Dame all have student bodies where less than 9 percent receive Pell Grants.

In the Ivy League, Columbia leads the way. At Columbia, 15.9 percent of the undergraduates received federal Pell Grants. Harvard is close behind at 15 percent. The University of Pennsylvania has the smallest percentage of low-income students in the Ivy League.

But the question is, Have these new financial aid programs been successful in increasing the number of low-income students on the campuses of our nation’s highest-ranked universities? A reasonable person would conclude that because these universities have made the cost of higher education more affordable for low-income students there would be a growing, if not surging, body of low-income students on these campuses. But this has not been the case.

A 2007 JBHE study found that at 25 of the 30 highest-ranked universities the percentage of the student body that came from low-income families declined from the 2003-04 academic year to the 2006-07 academic year. Remember that this was in a period when these universities had revamped their financial aid programs to make them more attractive to low-income students.

But finally these efforts to attract more low-income students seem to be having a positive impact. Since our last report 23 of the nation’s 30 highest-ranked universities have shown an increase in their percentage of low-income students. Two universities had the same percentage as was the case two years ago and only five showed a decline in the percentage of low-income students. The largest gains were at Harvard University, Emory University, MIT, and Stanford University.

Over a longer, five-year period from the 2003-04 academic year to the 2008-09 academic year, only seven of the top 30 universities have shown an increase in low-income students. Harvard shows the largest gain. In 2004, 9.4 percent of Harvard undergraduates were from low-income families. During the 2008-09 academic year, the figure had increased to 15 percent. Princeton, MIT, and Emory University also posted significant gains over the five-year period.

Tracking the Progress of Low-Income Students at the Highest-Ranked Liberal Arts Colleges

During the 2008-09 academic year Smith College in Northampton, Massachusetts, had the highest percentage of low-income students among the 30 highest-ranked liberal arts colleges.

It is important to note that in 2008-09, the most recent academic year for which Pell Grant data is available, the three liberal arts schools with the largest percentages of low-income students were all women’s colleges. Five of the top seven with the highest percentage of low-income students on campus were women’s colleges.

The women’s colleges that lead the nation’s highest-ranked liberal arts colleges in educating low-income students tend to have programs encouraging young single mothers to return to school to earn a college education. Undoubtedly, many of these women have low incomes and would readily qualify for federal Pell Grants.

Washington and Lee University in Lexington, Virginia, has the lowest percentage of Pell Grant recipients among the 30 highest-ranked liberal arts colleges. At this school, only 4.5 percent of the undergraduates qualified for federal Pell Grants. At Davidson College, Colby College, Kenyon College, Bates College, Colgate University, and Scripps College, fewer than 9 percent of the student body received federal Pell Grants.

But once again the most important question is, Is progress being made? JBHE’s survey shows that over the past two years, 21 of the 30 highest-ranked liberal arts colleges have increased their percentage of low-income students. Carleton College in Minnesota posted the biggest gain from 8.1 percent to 11.2 percent. Haverford, Williams, Grinnell, Amherst, and Vassar all posted gains of at least two percentage points over the past two years.

Nine liberal arts colleges showed declines over the past two years. The schools with the most significant losses were Scripps College, Swarthmore College, and Smith College. But we remind the reader that despite its drop in low-income students, Smith remains the overall leader by a wide margin.

If we take a longer look back over five years, we find that only 13 of the 30 highest-ranked liberal arts colleges have posted gains in their percentages of low-income students. Over the past five years, Williams and Amherst have posted the most significant increases. Scripps, Oberlin, and Wellesley have seen the largest decreases in their percentages of low-income students over the past five years.

Why Progress Has Been Slow in Increasing Low-Income Students

The standard thesis is that “if you cut the price to zero, the students you want will come.” But JBHE’s data shows that at both the high-ranking universities and the most selective liberal arts colleges this does not hold true. The question is, Why?

One of the main reasons is that the new financial aid packages targeting low-income students do nothing as such to increase the chances of these students winning admission to the selective colleges and universities. The money is there for these students if they gain admission, but, on average, students from low-income families are still having difficulty competing for spaces at these institutions.

Another factor is that many of our most selective institutions have also beefed up financial aid for middle- and upper-middle-class families. For example, at Harvard University, 40 percent of all financial aid recipients come from families with an annual income of more than $100,000. At Harvard, students who come from a family with an annual income of $180,000 are expected to pay only $18,000 of Harvard’s $50,000 annual comprehensive fee. At Yale, students from families with incomes of more than $200,000 are eligible for “need-based” financial aid. As a result, more students from these upper-middle-income families are applying to these selective colleges and universities, and these students tend to have better test scores and grades than students from low-income families.

Here are some other factors that make it difficult for high-ranking colleges and universities to attract students from low-income families.

• Cultural factors at some universities may dampen the number of applicants from blue-collar or low-income communities. Perceptions of institutional elitism or snobbery are often incorrect. Nevertheless, academically gifted sons or daughters of, say, a steelworker in Detroit may not see an Ivy League college as the right place for them to be.

• It is well established that each year many thousands of low-income high school students have sufficiently high SAT scores to meet the requirements of the most selective universities. Yet, on average, low-income students tend to have lower SAT scores than moderate or upper-income students. Always there is a direct correlation between SAT scores and family income levels. This SAT effect tends to restrict the number of qualified applicants from poor families.

• Selective colleges are not dedicating sufficient effort to visiting high schools in rural and urban areas.

• Even when a student qualifies for enrollment without any payment of tuition, the mere fact that the most selective colleges and universities post fees of almost $50,000 a year for its regular students may produce so-called sticker shock that discourages applications from highly qualified students from low-income communities.

• Admissions officers at many colleges and universities may not be willing to make necessary adjustments for high potential “late bloomers” in urban or rural high schools for fear of bringing down the mean SAT score of an entering class and thereby eroding the college or university’s U.S. News & World Report ranking for selectivity.

•  In urban and rural areas and in other low-income communities there may be little or no tradition of sending students to top colleges. High school guidance counselors may steer students with good academic qualifications to state-operated universities and community colleges that post lower costs.

The only sure conclusion is that money alone will not do the job to increase the economic diversity on the campuses of our most selective colleges and universities. Particularly, measures such as aggressive recruiting are necessary. University and college admissions officials need to set more extensive plans for personal visits to public high schools in a wide range of working-class communities.

Pell Grant Recipients at the Nation’s Flagship State Universities

Now let’s turn to the performance of the so-called flagship state universities in enrolling low-income students. Data obtained by JBHE from the U.S. Department of Education shows that, in general, during the 2008-09 academic year the flagship universities did a better job in enrolling low-income students than did the nation’s highest-ranked academic institutions. This is expected because tuition and fees at these schools are generally far lower than those at the highest-ranked private institutions.

But there was a very large disparity in performance among the flagship state universities in enrolling low-income students. Among the large flagship state universities, the best performance was at the University of New Mexico. At the University of New Mexico, 9,550 students received Pell Grants in the 2008-09 academic year. They made up 35.8 percent of the undergraduate student body at the flagship university and its satellite campuses. In New Mexico there are large numbers of low-income Hispanic and American Indian families, and it appears that many of them are enrolled at the state’s flagship educational institution. Hispanic students make up 35 percent of total enrollments at the university. Seven percent of the students are American Indians and 3 percent are black.

There are three other flagship state universities where at least 30 percent of all students qualify for federal Pell Grants. They are the University of Montana, the University of Idaho, and the University of California at Berkeley. In Montana and Idaho, many students from middle- and upper-income families go out of state to attend more selective and academically prestigious colleges and universities. At Berkeley there are large numbers of students from low-income Asian families.

The large majority of flagship state universities fall into a range where between 15 and 23 percent of all undergraduate students come from low-income families.

There are only 10 flagship universities where the Pell Grant percentage falls below 15 percent. Among these 10 flagships are the high-ranking University of Virginia, the University of Michigan, and the University of North Carolina at Chapel Hill. These three schools all have taken steps to make higher education more affordable to low-income students. However, financial aid assistance for low-income students has not had a major impact on the ability of these Pell Grant recipients to gain admission to these selective universities.

There is a direct correlation between family income and scores on standardized tests for college admission. Therefore, low-income students in Virginia, Michigan, and North Carolina tend to have difficulty competing for places at these highly selective flagship institutions. In states such as Idaho, Montana, New Mexico, and South Dakota, admission to the state’s flagship university is nowhere near as competitive or selective as in Viginia, Michigan, or North Carolina. Thus, many low-income students are able to gain admission to the flagship institutions in these mostly rural, less-populated states.

The University of Delaware has the lowest percentage of Pell Grant recipients of any of the flagship universities. Only 8.1 percent of all undergraduate students at the university qualify for Pell Grant awards. The University of Delaware attracts a large percentage of its student body from other states. Most students from out of state are not from low-income families, and they are obliged to pay higher tuition costs than Delawarians. Thus, low-income students from surrounding states are more likely to stay put in order to take advantage of their state’s lower costs rather than travel to Delaware where costs are considerably higher. However, students from middle- and upper-income families in surrounding states are attracted to the University of Delaware because of the institution’s academic reputation and its tuition costs, which are well below most private colleges and universities in the region.

In addition, a large percentage of low-income families in Delaware are black. Students from these families have tended to gravitate toward, or be funneled to, Delaware State University, a historically black institution. Only 6 percent of the students at the University of Delaware are black.

At Black Colleges and Universities, Pell Grant Students Are the Norm

At the nation’s historically black colleges and universities an entirely different story emerges concerning the enrollment of students from low-income families. In 2008 more than 155,000 students at the nation’s historically black colleges and universities received federal Pell Grants for low-income students. In fact, at a majority of all black colleges, two thirds or more of all enrolled students receive federal Pell Grants. There are eight HBCUs at which more than 90 percent of all students receive Pell Grants. At Arkansas Baptist College 96.8 percent of all undergraduate students qualify for federal Pell Grants, the highest percentage among the black colleges and universities. Lane College, Morris College, Mississippi Valley State University, Miles College, Texas College, Benedict College, and Allen University each have a student body of which 90 percent or more receive Pell Grant awards.

There are another nine black colleges and universities where more than 80 percent of the students are Pell Grant recipients. These include Tougaloo College, Livingstone College, Voorhees College, and Alcorn State University.

There are only 13 HBCUs at which low-income students are not a majority of all students. Among these schools are many of the nation’s more selective black colleges and universities. Spelman College and Morehouse College in Atlanta have less than 40 percent of their undergraduate students who qualify for Pell Grant awards. Hampton University in Virginia has the lowest percentage of Pell Grant recipients among the HBCUs. Hampton is the only HBCU where low-income students make up less than one third of the undergraduate student body. Howard University, the highly regarded historically black university in the nation’s capital, has the second-lowest percentage of Pell Grant recipients among the HBCUs. At Howard University, only 35.3 percent of all undergraduates received federal Pell Grants in the 2008-09 academic year.

The fact that such a large percentage of all students at the nation’s historically black colleges and universities come from low-income families demonstrates the continuing need for increased financial support from the federal government for these institutions. With so many students from impoverished families, there is a tremendous need for student financial aid. Also, the fact that so many students come from low-income families makes it extremely difficult for these schools to raise significant endowment funds because parents and alumni are predominantly from lower socioeconomic groups.

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