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Chapter 8 Reducing Inequality in Higher Education RONALD G. EHRENBERG A S ROBERT Haveman and Kathryn Wilson point out in chapter 2, differences in college enrollment rates across students from families of different socioeconomic levels have only marginally narrowed since the early 1970s (Baum and Payea 2004, figure 21). Moreover, students from lower-income families are much more likely to start higher education in two-year public colleges and public four-year institutions than are their higher-income counterparts (figure 21). Among students who initially enter four-year institutions, six-year graduation rates of students from families with incomes of less than $50,000 are substantially less than the rates of students from families with incomes of more than $75,000 (figure 24). Finally, at a set of our nation’s most selective private colleges and universities, the proportion of students coming from families whose family incomes are in the lowest two-fifths of the distribution of family income average only about 10 percent in recent years (Hill, Winston, and Boyd 2005). I begin this final chapter by discussing some of the forces influencing public and private higher education in the United States in recent years that have worked against improving access and persistence of students from the lower tail of the family income distribution. Where students go to college may be as important as whether they go to college. A considerable body of research shows that, other factors held constant, students who attend better-funded more selective colleges earn more after graduation , an effect most pronounced among students from lower-income families.1 I therefore also discuss why it became increasingly difficult for students from lower-income families to enroll at top public and private institutions during the period under study. Spurred by public attention that has been drawn to the underrepresentation of students from lower-income families, both selective public and private universities have begun to institute policies to improve their 187 access to talented students from lower-income families (Hill, Winston, and Boyd 2005; Kahlenberg 2004; Bowen, Kurzweil, and Tobin 2005). In this chapter, I discuss a number of these strategies and provide preliminary estimates for some of their success to date. Efforts have also been made to enhance college preparedness of lower-income high school students and to provide them with improved information about college costs, the availability of financial aid, and prerequisites needed to succeed in college. I also address a few issues related to these efforts and, in conclusion , speculate about directions that future institutional and public policies might take. Pessimistic Forces A host of forces have both influenced public and private higher education during the last thirty years and have served to reduce progress at improving access in general and to our nation’s most selective academic institutions .2 First, following the Reagan revolution and federal income tax cuts in the 1980s, which reduced the value of the state income tax deductions on federal income tax returns, taxpayers clamored for state income tax cuts. Increased state funding needs for Medicaid, for elementary and secondary education, and for the criminal justice system since then have increased pressure on state tax revenues and the structural deficits that have appeared in many state budgets. Revenues to fund public higher education generously have proved inadequate and dramatic reductions in the share of state budgets devoted to higher education have therefore taken place (Rizzo 2006). Enrollments in public higher education grew by more than 50 percent between 1974 and 2000 and state support per full-time equivalent student at public higher education institutions remained roughly flat, in terms of the higher education price index, during the period.3 Traditionally, public higher education has been viewed as a social good that yields benefits to the nation as a whole. However, because the earnings differences between highly educated and less educated individuals widened and the private return to higher education grew, policy makers focused much more on the private return to public higher education . Any increase in real expenditures per student at the publics had to come from tuition increases and from students and their families paying a greater share of their higher educational costs. On average, private higher education institutions increased their tuition levels by more than 3 percent a year above the rate of inflation during the last thirty years. Faced with no real increases in state appropriation per student, in an effort to generate resources as a way to remain competitive...

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