Improving college opportunity and affordability is shaping up to be a policy priority for the incoming Biden administration. With good reason, many of the most prominent plans focus on broad-access institutions, like community colleges and regional public universities. But it is important to complement these efforts with policies to improve access to selective institutions. Well-resourced public and private institutions are important pathways to civic and economic leadership and yet they serve a population of students that is disproportionately white and wealthy. Increasing opportunity for lower-income students and students of color at these colleges is a necessary component of making higher education overall more equitable.
The COVID-19 pandemic has brought severe economic disruption for millions of Americans, while simultaneously accelerating massive shifts in the nature of work. Higher education stands at the intersection of these forces. Paying for college (currently, in the future, or dealing with debt from the past) is a major challenge for families, especially those at the lower-end of the income distribution and those without family wealth. At the same time, quality education beyond high school is both valuable in the current work environment and insurance against future changes in the labor market.
It is not surprising, then, that the incoming administration is focusing on higher education policy. There is momentum behind policies such as free public college and direct federal investment in broad-access and minority-serving institutions. This investment in lower-income and racially diverse students and the institutions that already serve them is desperately needed. At the same time, federal policy has a role to play in ensuring that selective institutions that have ample resources contribute far more than they have to educating people from all walks of life.
Some have argued that there is a zero-sum trade-off between these two positions; that focusing on one sucks the air out of the other, and that therefore only the broader-based policies should be pursued. To the contrary, we believe these policies can complement each other, both contributing to increasing educational attainment across the income distribution.
More specifically, incorporating four policy concepts within broader-based legislative packages would push selective institutions toward greater socioeconomic and racial inclusiveness, justifying their large public subsidies, with no interference to other higher education objectives:
- Requiring a minimum undergraduate Pell share. The Pell grant program provides federal funding to students whose families generally earn less than $60,000 per year. As of 2018, 174 of almost 2,500 four-year institutions had fewer than 15 percent of their undergraduates receive Pell grants. Consequences for failure to achieve and maintain a designated minimum within a certain period could include financial penalties, as in Sen. Chris Coons’ (D-Del.) proposed ASPIRE Act; excluding public institutions below the threshold from any free public college program; or ineligibility to participate in the Federal Student Aid program.
- Permitting institutions subject to the tax currently imposed on returns from large endowments to take a partial credit against the tax for each increment of Pell share above a minimum threshold.
- Expanding the existing, “need-blind” antitrust exemption to permit a broader set of institutions to coordinate on financial aid and admissions, as long as they increase affordable access for lower-income students.
- Requiring the federal Education Department to collect and publish comprehensive student income-distribution data for all Title IV institutions, as a means of increasing accountability. One way to collect these data would be to require every student at a Title IV institution, not just those applying for federal student aid, to complete the newly simplified Free Application for Federal Student Aid (FAFSA) form.
The first two policies would provide a strong financial and reputational incentive, targeted to the institutions with the lowest enrollment of lower-income students. In addition to the financial motivation these policies provide, they would also send a clear signal that educational institutions that receive public benefits must — at least minimally — serve the public good in who they educate.
The third policy, focused on antitrust law, would reduce competitive pressures that, ironically, make it more expensive for selective higher education institutions to enroll lower-income students. There is an arms-race to enroll wealthier students, and, as in any arms-race, unilateral disarmament by any one participant risks ruin. Allowing higher education institutions to collaboratively set ground rules around admissions and financial aid — with a requirement to increase enrollment and success of lower-income students, subject to external monitoring — would benefit consumers by making these institutions more accessible and affordable for a broader distribution of students.
The final policy, promoting greater transparency, is necessary to monitor equity of access to institutions, and to adapt and improve policy over time. All students at these institutions are benefiting from significant public subsidies, which justifies requiring some universal disclosure of income and assets.
Bolstering the institutions that educate most students in America ought to be the leading edge of the Biden administration’s higher education policy. But selective institutions should be part of the solution, not written off as part of the problem. Complementary federal policies targeting those institutions will help to reduce the opportunity hoarding at the top of the socioeconomic ladder, even as other policies increase opportunity at scale across higher education in America.
Catharine Bond Hill is Managing Director of Ithaka S+R, which provides research and strategic guidance for academic and cultural communities. Martin Kurzweil is director of the Educational Transformation Program at Ithaka S+R