By Hilda Hernández-Gravelle, Senior Research Fellow

"It is like the white house on the top of the hill," a staff member I interviewed at a community college said to describe the way many Latino / Hispanic students and their families view financial aid. The idea of receiving a free scholarship or financial assistance that does not need to be repaid seems too good to be true. Consequently, sometimes students do not apply for the financial aid they are eligible for.

There are other cultural factors for Latinos that can contribute to difficulties securing financial aid services and become impediments to college access. Some of these include: fear of debt; mistrust of lenders; and conflicts between family financial obligations and educational aspirations. While Latinos generally have a strong commitment to education, many believe that if you can't afford to pay for it up front, you can't attend. Such assumptions, along with a lack of awareness in the higher education sector about other cultural differences, make college seem unattainable to students who might otherwise be able to attend. The Los Angeles Times published an excellent story on this phenomenon in January 2007.

Attention to the challenges faced by Latinos in higher education is beginning to grow in the college access field. The Lumina Foundation just completed an important dynamic rich media report and web site on access and success for Latinos. Excelencia in Education also recently released survey results on enrollment and attainment for Latino students. The Chicano Studies Research Center at the University of California at Los Angeles released a report at the beginning of this month on the "mismatch" between Latino students’ aspirations and experiences titled, "An Examination of Latina/o Transfer Students in California's Postsecondary Institutions."

At the American Association of Hispanics in Higher Education, held in Orange County California in March 2007, Mari Luna De La Rosa and I presented The Strategy of Debt: How Hispanic Students Pay for College.This presentation introduced financial aid data and cultural factors that affect how Hispanic students use available aid. In an interactive presentation, we heard the perspectives of financial aid service providers and college administrators, highlighting the need to be aware of and responsive to cultural differences in financial aid service delivery.

The presentation was well-attended and received, demonstrating the need for dissemination of information that shapes understanding of financial aid among different groups. Given the debt aversion that exists among Hispanic students, and the resulting impact on college access, the Institute will explore how to better inform Hispanic students, families and administrators about college costs, debt, and the financing of higher education.

Posted by Edie Irons at 10:10 AM | Permalink

By Deborah Frankle, Research Analyst

Tuition discounting is the practice of using institutional aid to adjust tuition levels to best match what students and families are willing to pay, a widespread trend that is tracked by annual reports from the College Board.

We recently used publicly-available federal data to get a sense of the phenomenon at private four-year institutions, and were surprised to find that almost half of private, four-year institutions with at least 1,000 students provide discounts to 90% or more of their students. Four out of five colleges (83%) provided discounts to at least half of their students. In many cases, the average discount was quite large.

What does this mean? Actual discounting strategies vary dramatically between colleges, and the numbers above do not distinguish between need-based and merit-based aid. Some colleges use their institutional aid to help meet the financial need of low-income students, increasing access; others use it to attract students with less or no need who serve to maximize the prestige of the institution. Because we cannot distinguish between pricing and aid strategies at individual colleges, we cannot say for sure.

But one recent analysis suggests that the overall picture is troubling: institutional aid, a larger source of financial aid than state and federal aid combined, goes to higher-income students at rates far exceeding those of federal and state aid. For dependent students, 46% of institutional need-based grant funding went to those with family income above the median, compared to 3% of federal aid.

Why is this interesting? These issues bring up a number of questions:

• When institutional aid ($10 billion) far outweighs federal and state aid combined ($7 billion), what does it mean for college access that institutional aid tilts to those with higher incomes? (NPSAS, dependent students only)
• What does 'need-based' aid mean when it’s almost evenly distributed across all income levels?
• What is the point of tuition increases when almost all students receive a discount? Does the "sticker shock" of high tuition scare low-income students away before they learn about available discounts?
• Should detailed institution-level data on discounting practices be made public?

Other resources on this topic:

Tuition Discounting, Not Just a Private College Practice, College Board

Tuition Discounting and Prudent Enrollment Management, Association of Governing Boards

Posted by Edie Irons at 2:29 PM | Permalink

The economicdiversity.org database includes campus-by-campus data on the total student loan debt of graduating seniors. The numbers come from the Common Data Set, and are reported by the campuses to the various publishers of college guides. The instructions to campuses tell them to include private loans in the total. But at a recent meeting between campus data-keepers and the publishers, it became clear that some campuses have a better handle than others on the amount of private loans being made to their students.

To be clearer about the totals in future data collections, the Common Data Set will, in the future, ask campuses to provide separate totals for federal and private loans; some campuses will input a "not available" in the private loan field.

One solution to this data problem would be for the feds to require that private loans be certified by the college in order to qualify for the tax deduction on student loan interest. That way, financial aid administrators would be able to track who has private loans, and how much students have truly borrowed. They would also be able to check to make sure that the student isn't making a mistake by signing up for a high-rate or otherwise undesirable loan. This might also help borrowers down the line, since many don't know the differences between federal and private loans, and are unclear as to which they have. If aid administrators had more information, they could more easily advise students about the risks and tradeoffs of alternative loans.

Posted by bob shireman at 3:13 PM | Permalink

Another source of useful data on college students' family income is the CIRP Freshman Survey, developed by the Higher Education Research Institute (HERI) at UCLA. Each year, colleges across the country administer the CIRP survey to their incoming freshmen, asking them about a range of topics, including family income. HERI compiles the responses into a national report. Each participating campus receives its own results along with comparisons to peer institutions.

Campuses decide whether to make their own reports available, and some have done so. For example, Emory University has made selected findings from its 2005 survey available online. The report indicates that a majority of the students have parents with graduate degrees, and 39% report family incomes of more than $200,000, a larger proportion than peer institutions. In comparison, Northwestern University's report shows 30% of freshmen with family incomes above $200,000, and 63% above $100,000. Compare those figures with Census data showing that only 3.5% of families in the U.S. earn more than $200,000, and only 20% earn more than $100,000.

Other campuses that have posted some or all of their Freshman Survey results are listed below. A note and link also appear on these campuses' institutional profiles at economicdiversity.org.

Full reports
Berea College, 2004
Cornell University, multiple years
Hampden-Sydney College, 2000
Indiana University of Pennsylvania, 2001
Iowa State University, 2003
Northwestern University, 2005
Purdue University, multiple years
University of Minnesota, multiple years

Executive summaries/partial data:

Bryn Mawr College, 2004 (Full data for selected categories, not socio-economic)
Calvin College, 2002 (executive summary, some socio-economic data)
Case Western Reserve University, 2000 (one-page summary, no socio-economic data)
Central Washington University, 1998 (summary, includes socio-economic data)
Dartmouth College, 2003 (selected findings, summary of socio-economic data)
East Texas Baptist University, 2002 (executive summary, sparse socio-economic details)
Emory University, 2003 (selected findings, includes socio-economic data)
Florida International University, 2000 (executive summary, some socio-economic data)
Massachussets Institute of Technology, 1998 (selected findings, summary of socio-economic data)
Montclair State Unversity, 1991 and 2001 (executive summary, some socio-economic data)
Morningside College, 2004 (highlights in powerpoint presentation)
Oklahoma State University, multiple years (selected findings, some socio-economic data)
Oregon State University, 2002 (executive summary, sparse socio-economic data)
Roanoke College, 2002 (some socio-economic data, all in percentages)
Southwest Minnesota State University, 2003 (executive summary, some socio-economic data)
Sweet Briar College, 2004 (summary, no socio-economic data)
Texas State University at San Marcos, 2000 (summary, some socio-economic data)
Texas Tech University, 2003 (executive summary, some socio-economic data)
University of California at Santa Cruz, 2002 (executive summary, sparse socio-economic data)
University of Idaho, 2002 (executive summary, some socio-economic data)
University of North Carolina at Chapel Hill, 1999-2004 (summary graphs, some socio-economic data)
University of North Dakota, 2002 (summary, no socio-economic data)
University of South Carolina, 1999 (selected findings, includes socio-economic data)
University of Wisconsin at Milwaukee, 2004 (executive summary, some socio-economic data)

Want to know whether a particular campus has participated in the CIRP survey? See the list of CIRP participating campuses. If you know of a school not listed here whose CIRP data is public, please comment on this thread and post a link.

Posted by Edie Irons at 12:00 AM | Permalink | Comments (2)