The Century Foundation recently published a new analysis tracking how some southern states fail to properly distribute student financial aid, finding that a high share of state grant dollars go to students from high-income families.
According to the Century Foundation’s research, one of the worst states when it comes to effectively distributing financial aid is Mississippi, the state with the highest share of Black residents. In Mississippi, some 87 percent of students in the top income quartile and 75 percent of those from the upper-middle quartile receive some form of state grant aid. In comparison, only 44 percent of students in the lower-middle quartile and just 30 percent of those in the bottom quartile receive financial aid from the state. Furthermore, just 28 percent of Black students in Mississippi receive state grant aid, compared to 78 percent of their White peers.
Although not as stark as those in Mississippi, similar disparities were found in Georgia, another state with a high share of Black residents. In Georgia, 80 percent of students from the top quartile of household income receive aid, compared to 62 percent of students from the bottom quartile. Among students from different racial backgrounds, 53 percent of Black students receive state financial aid, compared to 69 percent of Hispanic students, 72 percent of Asian students, and 78 percent of White students.
In contrast, the Century Foundation report identified three southern states that provide more state grant aid to students from the bottom half of household income levels than to those from the top half. In Virginia, North Carolina, and Texas, low-income students and Black and Hispanic students are significantly more likely to receive state financial aid than their peers from high-income backgrounds and White students.
Notably, the report also outlines how state aid fails to support students attending HBCUs, which enroll a significantly higher share of low-income students. At HBCUs, 51 percent of students are from the bottom quartile of household income, compared to 28 percent of students at non-HBCUs. Despite these significant differences in low-income student enrollment, there is virtually no difference in the share of enrolled students who receive state grant aid at HBCUs and non-HBCUs (44.7 percent versus 43.1 percent). Additionally, only 3 percent of HBCU students have grants that exceed federal need, compared to 13 percent of students at non-HBCUs.
As a result of these disparities, HBCU students and their parents are more likely to take on debt compared to students at other institutions. At HBCUs, 73.2 percent of students receive Title IV loans (including Parent PLUS loans), compared to 53.5 percent of students at non-HBCUs.
“HBCUs are essential for providing affordable, high-quality education to underserved students, thereby advancing college access and narrowing racial and economic equity gaps,” the report authors write. “Despite their critical mission, HBCUs face ongoing funding disparities. To ensure these institutions have the necessary resources to thrive, policymakers must implement reforms that address historical underinvestment, including reforming state aid to ensure that it serves the students with the most need.”
