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Access and Financial Aid
Higher education is the key to economic mobility in the United States of America. Over the course of their working lives, college graduates are likely to earn $1 million more than high school graduates. And the earnings gap is even wider for those with advanced degrees.
So too, our nation’s ability to compete in the global economy depends on an increasing number of Americans earning college degrees.
Yet staggering increases in college prices continue to threaten the ability of students—particularly those from low-income families—to gain access to higher education. The cost of attending college has more than doubled in the last three decades. Over the same time, family income only rose by 3 percent for the poorest families. Today, the cost of attending a public four-year college represents more than half of the annual median income for the nation’s poorest families, even after accounting for financial aid. For America’s wealthiest families, the proportion of family income necessary to send a child to college is less than 10 percent.
Recent increases in the maximum award amount of federal Pell Grant surely will help low-income students. Unfortunately, these new funds do not adequately restore the purchasing power of the federal grant. The maximum Pell Grant today covers only about one-third of the cost of attending a public four-year college; 30 years ago it covered three-quarters of the cost.
States and higher education institutions need to do their part by reversing the alarming shift toward merit aid. Instead, they need to refocus scarce financial aid dollars on the unmet need of low-income students. Unless they do so, financial barriers will prevent an estimated 2.5 million college-qualified low-income students from earning bachelor’s degrees in this decade alone.