Inequality and the Graduation Gap

We hear a lot, as we should, about rising student debt levels and the poor records of many colleges in actually improving the life prospects of their students. But in an essay in the new issue of the Washington Monthly, Rachel Fishman of the New America Foundation argues that the single largest contributor to inequality in job access and income among high school graduates is the failure of low-income students to secure the credentials–a two- or four-year degree, or a job training skills certificate–they go into debt to obtain.

The conventional wisdom is that college in America is the great class equalizer. But the truth is increasingly the opposite: higher education is fast becoming yet another perpetuator of inequality. The reason is not that lower-income Americans don’t aspire to college. In 2008, 55 percent of high school graduates from the poorest 20 percent of homes enrolled in college directly from high school, compared to 80 percent of students from the wealthiest 20 percent of homes. While this is a significant gap, it pales in comparison to the difference in college graduation rates. Four out of five twenty-four-year-olds in the upper quarter of the income scale hold four-year college degrees. In the bottom quarter, only one in ten does.

One reason for the difference in graduation rates is not surprising. Kids who grow up in poorer neighborhoods and attend troubled, less rigorous primary and secondary schools tend to start college less academically prepared and are thus more likely to drop out. But another reason is that these students, who have shown their mettle by graduating from the toughest high schools, are repaid for their efforts by getting channeled into the worst-performing colleges—costly for-profits that make false promises of employment in high-wage jobs, or lower-priced but under-resourced community colleges and regional four-year schools with high dropout rates.

Students who don’t earn educational credentials are the most likely to struggle to pay off loans as well.

Fishman finds good models for public universities deciding to and succeeding in quickly lifting graduation rates among relatively low-income and very diverse student populations, notably Atlanta’s Georgia State University and Orlando’s University of Central Florida. But she points to two Obama administration initiatives–its unveiling of a college evaluation system focused on “bang for the buck,” and its proposed new “gainful employment” rules for schools receiving federal assistance, as particularly large opportunities for reform. Moreover, she argues, allowing federal student aid funds to be used for short-term but effective skills certificate programs and “competency-based” skills mastery credentials could help as well.

It’s time to get aggressive with higher ed reforms before the momentum runs out and complacency sets back in, and we lose another cohort of students from low-income backgrounds–and their contributions to the economy–for good.

Ed Kilgore

Ed Kilgore, a Monthly contributing editor, is a columnist for the Daily Intelligencer, New York magazine’s politics blog, and the managing editor for the Democratic Strategist.