| Despite Surging Endowments, High-Ranking Universities and Colleges Show Disappointing Results in Enrolling Low-Income Students
 In recent years, the endowments of the nation’s most prestigious colleges and universities have soared. Many of these institutions are committing substantial funds in efforts to enroll more students from low-income families. Results have been disappointing over the long and short terms. The percentages of low-income students at almost all of the highly selective colleges and universities have declined.
 In recent years the top-tier university endowments in the United States have shown dramatic growth. Spectacularly strong investment performance has been achieved at the so-called “Ivy-Plus” schools, a group that includes all eight Ivy League universities as well as such highly selective and prestigious institutions as Stanford, MIT, Northwestern, Emory, and the University of Chicago.
As of June 30, 2007, Harvard University’s endowment, the nation’s largest, stood at nearly $35 billion. This represents an increase of more than $13 billion, or 62 percent, in the past three years alone. Yale’s endowment now stands at $22.5 billion. Stanford University’s endowment is $17.2 billion and the funds at Princeton University have reached $15.8 billion. Harvard, Yale, Stanford, and Princeton each achieved annual investment growth of at least 23 percent in the year ending June 30, 2007. Since 1986 the combined value of the 20 largest university endowments has grown nearly eightfold.* The total endowment of the 10 wealthiest institutions now exceeds $140 billion.
Surging endowments of the Ivy-Plus universities have encouraged many institutions to allocate more resources to student financial aid. Yet many critics, both in and out of government, contend that spending on student financial aid is paltry compared to the huge investment returns earned by these institutions. The latest figures from the U.S. Department of Education show that Harvard spent about $82 million on financial aid in 2006. That, of course, is a huge amount of money. Yet the sum was equivalent to only 0.3 percent of its endowment value that year. Yale spends 0.3 percent, Stanford 0.4 percent, and Princeton 0.5 percent of their endowments on financial aid. Keep in mind that these financial aid expenditures of three to four tenths of one percent per year compare with annual endowment yields ranging from 15 to 20 percent or more.
Led by Republican Senator Charles Grassley of Iowa, pressure has been building in Congress to press wealthy institutions to spend more money to help college-bound students from low-income and working-class families.
*Data reported in the annual survey conducted by the National Association of College and University Business Officers.
Measuring the Success in Enrolling Low-Income Students
Now let’s examine how specific American universities have fared in their efforts to increase the number of low-income students on their campuses.
Our conclusions are based on unpublished data which we have received from the U.S. Department of Education. This data shows the percentages of all undergraduates who received federal Pell Grants at the so-called Ivy-Plus universities with the 10 largest endowments. Here we also publish the same Department of Education data on the percentage of low-income students at 20 other high-ranking universities. Finally, we present the government data on the nation’s 30 highest-ranked liberal arts colleges.
The issue of greater equity in college and university admissions has been a subject of constant attention by this journal. Over the past 15 years, we have accumulated an arsenal of data that goes back nearly a quarter-century. This gives us the ability to track both long-term and short-term progress at various universities in their efforts to achieve greater economic diversity in their student bodies.
As mentioned, our statistics are largely based on so-called Pell Grants for college students. Pell Grant awards are reserved for students from families typically with incomes below $40,000. Although sometimes flawed or misread, U.S. Department of Education statistics on Pell Grants have become accepted as a standard measure of the percentage and number of low-income students at a particular institution.
Let’s first take up short-term results. Unfortunately, the latest data available is for the year 2006. At nine of the 10 universities with the largest endowments, the percentage of low-income students has declined in the 2004 to 2006 period. The exception is at Harvard where the percentage of all undergraduate students receiving Pell Grants increased from 9.4 percent in 2004 to 11.9 percent in 2006. At the other nine Ivy-Plus schools with the largest endowments, the percentage of students receiving Pell Grants declined in the 2004 to 2006 period. In some cases the declines were modest. But at three of the 10 universities with the largest endowments there were significant percentage point declines in just two years.
In reporting results for such a short, two-year time span, we must caution that data for any particular institution may be a statistical anomaly. Accordingly, the figures may not be of great value as an indication of a long-term trend. Yet when this point is conceded, the most troubling fact is that, over the long term of 23 years since 1983, eight of the 10 universities with the largest endowments have shown a decline in the percentage of low-income students. (See the chart on the opposite page)
Only Emory University and Stanford University showed small increases in their percentages of low-income students in the 23-year period from 1983 to 2006. The fact that, with only two exceptions, the nation’s most prestigious universities have shown a long-term decline in percentages of low-income students is a matter of concern and disappointment.
But now let’s shorten the period to be measured. Instead of 23 years, let’s consider the results of the 13-year period from 1993 to 2006. We find that among the 10 universities with the largest endowments only Harvard and Princeton have boosted their percentages of low-income students during this 13-year span. All of the other eight universities with the nation’s largest endowments show a decline in low-income students in this period.
In conclusion, if we examine the trend over the long term, the intermediate term, and the short term, the results are nearly identical. In each instance, the trend at almost all of the nation’s 10 wealthiest universities shows a decline in the percentages of low-income students.
Measuring Economic Diversity in the Student Bodies at a Larger Group of 30 High-Ranking Universities
Now let’s expand our view to include 20 additional universities. The count embraces highly ranked schools mostly with substantial endowments. In recent years these universities also have been remarkably successful in increasing their endowment wealth. Currently, in 2007 there are 62 colleges and universities in the United States that have hit the $1 billion mark in endowment value.
According to our Pell Grant data collected from the Department of Education, over the past 23 years only 10 of the nation’s 30 highest-ranked universities have shown progress in increasing the percentage of low-income students enrolled in undergraduate programs. The University of California at Berkeley and the University of California at Los Angeles have posted the largest gains. Since 1983 the percentage of all undergraduates at UCLA who received federal Pell Grants increased from 21.5 percent to 35.8 percent. At Berkeley there was a similar increase. In 1983, 19.7 percent of all undergraduate students at Berkeley received Pell Grant awards. By 2006 the figure had increased to 31 percent.
But here is the most important point. Of the entire group of 30 high-ranking universities in the nation, 20 showed a long-term decline in enrollments of low-income students. As usual, percentages of decline vary. Columbia, Carnegie Mellon, and the University of Michigan showed the sharpest declines. Going back to 1983, more than 29 percent of all Columbia University undergraduate students received Pell Grant awards. Yet 23 years later in 2006, the most recent data available, only 15.3 percent of all Columbia University undergraduates received Pell Grants. Despite this major decline, Columbia still leads the Ivy League in enrolling the largest percentage of low-income students.
At the University of Michigan the percentage of all students who received federal Pell Grants declined from 21.8 percent in 1983 to 12.7 percent in 2006. At Carnegie Mellon University in Pittsburgh, the 2006 percentage of all undergraduates receiving Pell Grants was exactly one half the rate that prevailed in 1983.
Recent Trends Are More Unfavorable
Among this larger group of 30 high-ranking universities, which also include the 10 universities with the largest endowments, in the most recent two-year period only Dartmouth and Harvard posted gains in their percentages of Pell Grant recipients. The percentage of low-income students at Vanderbilt remains unchanged.
The most important statistic to notice is that over the two-year period from 2004 to 2006, 27 of the 30 high-ranking universities showed declines in their percentages of low-income students.
Even at UCLA, Berkeley, and the University of Southern California, which have a greater percentage of low-income students than their peer institutions, all those have shown a decline over the past two years. At the University of Southern California, the decline has been more than six percentage points in just two years.
Again, we point out that results in a very short term period such as two years may not be significant. We will need a couple of more years of figures from the Department of Education to determine what is happening. But, again, there can be no doubt that for more than 25 of the 30 highest-ranked universities, the recent trend has been decidedly down.
 Economic Diversity in the Student Bodies at the Leading Liberal Arts Colleges
Now we turn to the long-term performance of the nation’s most prestigious liberal arts colleges in enrolling students from low-income families. Almost all of these institutions, in common with the large high-ranking universities, have accumulated substantial endowments.
According to Pell Grant data obtained from the U.S. Department of Education, over the past 23 years 10 of the nation’s 30 highest-ranked liberal arts colleges have shown progress in increasing the percentage of low-income students enrolled in undergraduate programs.
Over this more than two decade period, the most important progress was made at Smith College in Northampton, Massachusetts. During this 23-year period ending in 2006, the percentage of low-income students at Smith rose from 17.4 percent to 25.8 percent. At Mount Holyoke the percentage of low-income students rose from 12.9 percent in 1983 to 18 percent in 2006. The additional eight colleges that have posted gains in their percentages of low-income students over the 1983 to 2006 period are Wellesley, Amherst, Williams, Trinity, Swarthmore, Haverford, Bucknell, and Middlebury. However, the gains at these eight schools are far more modest than those achieved at Smith and Mount Holyoke.
Since 1983 the largest declines in the percentage of all undergraduate students receiving Pell Grants have occurred at Barnard, Oberlin, and Macalester. At Macalester College in Minneapolis, there was a drop from 21.8 percent in 1983 to 11 percent in 2006. At Oberlin College in Ohio, the percentage of low-income students dropped from 20.2 percent to 12.5 percent. At Barnard the drop was from 22.8 percent to 16.7 percent. Yet despite the significant decline in the percentage of low-income students, today Barnard still ranks third overall among the 30 highest-ranked liberal arts colleges.
Now let’s turn to the short-term results at the nation’s 30 highest-ranked liberal arts colleges.
In the short period from 2004 to 2006, only four of the nation’s 30 highest-ranked liberal arts colleges showed improvement in their percentages of low-income students since 2004. They are Williams, Bowdoin, Carleton, and Colby. All of these recent gains were modest.
It is important to note that in 2006, the most recent year for which Pell Grant data is available, the five liberal arts schools with the largest percentages of low-income students were all women’s colleges. By a large margin Smith College has the highest percentage of low-income students.
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. Nevertheless, all five of the liberal arts colleges for women showed a decline in their percentages of low-income students over the most recent two-year period.
In the 2004-06 period, 26 of the 30 leading liberal arts colleges showed a decline in their percentages of low-income students. At some schools the declines were significant. The percentage of low-income students at Claremont McKenna College dropped from 12.7 percent to 9.9 percent in the 2004 to 2006 period. At Bryn Mawr College in Pennsylvania, low-income students declined from 16.3 percent to 13.4 percent.
Conclusion
In recent years many of the nation’s leading universities and colleges have made special financial commitments aimed at attracting academically qualified students coming from low-income and working-class families.
It is both disappointing, and in some cases baffling, that the results have been poor. Over both the short and long term, most of the nation’s leading universities and colleges show significant and, in some cases, severe declines in percentages of low-income students.
Over the past 23 years, eight of the 10 American universities with the largest endowments have shown a decline in their percentages of low-income students. Unexpectedly, over the 23-year period, declines have occurred at Harvard, Princeton, Penn, Northwestern, Columbia, Yale, MIT, and the University of Chicago. Only Stanford and Emory posted an increase in percentages of low-income students.
Over the medium-term period from 1993 to 2006, of the 10 colleges with the largest endowments only Harvard and Princeton have increased their percentages of low-income students. The other eight universities with the largest endowments showed declines.
Looking simply to 2006 figures, among the eight Ivy League institutions, Columbia University has the highest percentage of low-income students. Among this Ivy League group, the lowest percentages are at Yale, Penn, and Princeton.
Although short-term results are subject to aberrations and unreliability, it is statistics for the 2004 to 2006 period that tell a most disappointing story. In this short, two-year period, the percentage of low-income students has declined at all of the 10 wealthiest universities except at Harvard, where the percentage of low-income students increased from 9.4 percent to 11.9 percent.
In viewing a much larger group of 30 highly selective universities with substantial endowments, we have the following results. Over the past 23 years, only 10 of the nation’s 30 highest-ranked universities have shown progress in increasing the percentages of low-income students enrolled in undergraduate programs. The University of California at Berkeley and UCLA showed the most progress. Columbia, Carnegie Mellon, and the University of Michigan had steep declines.
Turning again to the intermediate period from 1993 to 2006, only eight of this group of 30 highest-ranked universities posted an increase in their percentages of low-income students. They are UCLA, Berkeley, Dartmouth, Harvard, Brown, Duke, Tufts, and Princeton.
Over the two-year period from 2004 to 2006, only Dartmouth and Harvard posted gains in their percentages of low-income students. The percentage at Vanderbilt remained the same, but a very large group of 27 selective universities showed declines.
Finally, at the 30 most highly ranked small liberal arts colleges, the results are mixed, but on the whole disappointing: Over the past 23 years, 10 of the nation’s 30 highest-ranked liberal arts colleges have shown progress in increasing the percentage of low-income students. Smith and Mount Holyoke posted the largest gains. Other colleges that have shown a gain over the long term include Amherst, Wellesley, and Trinity. The largest declines have occurred at Barnard, Oberlin, and Macalester.
In the 1993 to 2006 or intermediate period, only six of the 30 top liberal arts colleges had gains in their percentages of low-income students. Twenty-four colleges saw their percentages of low-income students decline.
Since 2004 only four of the nation’s 30 highest-ranked liberal arts colleges have shown improvement. They are Williams, Bowdoin, Carleton, and Colby.
Once again, the short-term numbers for the liberal arts colleges may present a statistical anomaly. We note, for example, that for the 2006-07 entering class, a year following the one for which we have the latest Pell Grant data, 10 percent of all students who enrolled at Amherst College came through the QuestBridge program. This program places highly qualified low-income students at its 20 partner institutions.
Some colleges and universities have taken strong, and in some cases expensive, measures to bring more low-income students to their campuses. Here the leaders are Princeton, Harvard, Penn, the University of Virginia, Chapel Hill, Amherst, Davidson, and Williams. In some cases these measures include total forgiveness of tuition charges and the substitution of scholarship grants for student loans. At Princeton, for example, it is said that the university may have added $25-$30 million or more to its financial aid budget in order to bring greater economic diversity into its student body.
Contrary to what one might expect, it appears that there is no strong correlation between the generous new fiscal measures and success in bringing low-income students to a campus. The only sure conclusion is that money alone will not do the job. The standard thesis that “if you cut the price to zero, the students you want will come” does not hold true.
Other measures such as aggressive recruiting are necessary. Particularly, it appears that 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.
Tracking the Progress of the Nation’s 30 Highest-Ranked Universities
in Enrolling Low-Income Students Over the Past Two Decades
Percentage of all undergraduate students receiving federal Pell Grants*
(Ranked by the highest percentage of low-income students in the 2005-06 academic year)
Over the past 23 years, only 10 of the nation’s 30 highest-ranked universities have shown progress in increasing the percentage of low-income students enrolled in undergraduate programs. The University of California at Berkeley and the University of California at Los Angeles have posted the largest gains. Columbia, Carnegie Mellon, and the University of Michigan show sharp declines.
Over the past two years only Dartmouth and Harvard posted gains in their percentages of Pell Grant recipients. Vanderbilt remained the same and 27 other high-ranking universities showed declines.                 \             
*Percentage of Pell Grant recipients is a standard measure of a university’s success in enrolling low-income students.
Source: JBHE analysis of data obtained from the Department of Education.
Chart © The Journal of Blacks in Higher Education
Tracking the Progress of the Nation’s 30 Highest-Ranked Liberal Arts Colleges
in Enrolling Low-Income Students Over the Past Two Decades
Percentage of all undergraduate students receiving federal Pell Grants*
(Ranked by the highest percentage of low-income students in the 2005-06 academic year)
Over the past 23 years, only 10 of the nation’s 30 highest-ranked liberal arts colleges have shown progress in increasing the percentage of low-income students enrolled in undergraduate programs. The largest declines have occurred at Barnard, Oberlin, and Macalester.
Since 2004 only four of the nation’s 30 highest-ranked liberal arts colleges have shown improvement. They are Williams, Bowdoin, Carleton, and Colby.
In 2006 the five schools with the largest percentage of low-income students were all women’s colleges. By a large margin Smith College has the highest percentage of low-income students.
                             
*Percentage of Pell Grant recipients is a standard measure of a college’s success in enrolling low-income students.
Source: JBHE analysis of data obtained from the Department of Education.
Chart © The Journal of Blacks in Higher Education
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