Issue 17: Inspiration for Higher Education

Insights & Outlooks

Partner with States to Close Equity Gaps

Financial Aid Reforms
Partner with States to Close Equity Gaps

Over the past generation, there has been a sea of change in how we pay for college. Over the years, states have cut funding for colleges and universities while enrollment grew. The trend was turbocharged by the Great Recession, driving up tuition and student debt. 

State funding is not only declining but also distributed inequitably. Community colleges and regional universities serve the highest shares of low-income students and underrepresented students of color, but they receive the least state funding. Community colleges receive $2,900 less per student than doctoral universities do.

Poorly resourced colleges are less able to provide the academic support, advising, and other extra help that is the key to improving student success. Not surprisingly, schools receiving the least funding and serving the bulk of underrepresented students of color have the lowest rates of success.

The result is a big gap in college completion. More than half of young white adults hold at least a two-year college degree, compared to only 37 percent of young Black adults and fewer than a third of Hispanic and American Indian peers.

These students are also more likely to be stuck with unaffordable student debts. Students who fail to complete their program are twice as likely to default. As many as 70 percent of Black borrowers may eventually default. 

Democratic presidential candidates and leading members of Congress have proposed a new partnership between the federal government and states for college affordability. While these plans take somewhat different approaches, none include two components that are needed to close college opportunity gaps. 

First, a federal-state partnership needs to protect public colleges and universities from the economic cycle. State funding for community colleges and public universities fell by $2,000 per student between 2008 and 2012. Colleges still have not recovered from these deep cuts, according to the Center for Budget and Policy Priorities

Another recession is inevitable. According to many economists, it may come in the next year or two. When it does, Congress should give states the extra resources they need to cushion students from another run-up in tuition and student debt. TICAS recently published a proposal that would automatically trigger greater funding for states experiencing rising unemployment. 

Second, there is increasing evidence that additional resources, well spent, can help students graduate at much higher rates. More funding can mean more courses, smaller class sizes, and better advising and other student services. But few community colleges can afford these steps, and only 39 percent of community college students nationwide graduate within six years.

Any new grant to states should – as a condition of receiving new federal funds – require states to be transparent about the racial disparities in public colleges’ resources and student outcomes. States may need to invest in new data systems that measure inclusiveness of our higher education systems, and states should be expected to describe plans to promote equal college opportunities. New federal grants should also encourage states to equalize funding for underfunded institutions, such as community colleges, historically black colleges and universities, and other minority-serving institutions.

The political momentum behind ambitious new proposals to invest in public colleges and universities is exciting. But to be successful, these proposals must ensure stable funding across economic cycles and make headway in closing racial and economic gaps among public colleges.

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