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US: Aid prevents big wealth gap impact on students
Events of the recent past have exacerbated the declining higher education support of the last few decades. The financial future of higher education generally and the University of California in particular looks worse today than at any time in the past 30 or more years. Higher education is not the opportunity that it was when the parents of current students matriculated.

There is no indication that the retired generation, the currently retiring generation, or the generation facing retirement will step forward to provide for subsequent generations the opportunities they had.

Without question, the University of California in 2011 is not the affordable, accessible institution that it has been historically. The university is certainly more exclusive and more prestigious. Unfortunately, it is also much more expensive and the cost is expected to be borne by students and their families and to be repaid in future earnings.

When considering inflationary effects, it can be helpful to differentiate cost over time and changes in the product over time. For example, an automobile and a college degree share cost characteristics. A base Chevrolet Camaro in 2010 cost $22,995. The base Camaro in 1970 cost $2,749 ($15,450 in 2010 dollars).

As is true for the cost of a college degree, the cost of a Camaro has increased far more than inflation but what about the product itself?

The 2010 Camaro has many characteristics that the 1970 Camaro did not have: four-wheel disk brakes, stability control, air bags, Bluetooth, USB, OnStar, XM Satellite Radio, fuel injection, crumple zones, catalytic converter, standard HVAC. The 2010 Camaro also delivers about 24 MPG combined and its V6 produces 304 HP. The 1970 Camaro got about 13 MPG combined and produced 155 HP. The 2010 Camaro will provide better, safer performance and is the product of a very different design and production assembly line processes.

While it is a crass comparison, how different are the means of production and the resulting college graduate in 2010? Before tuition is dramatically increased again, maybe it is time to consider making changes in instructional delivery.

Instead of pro forma reluctance to increase the cost to attend, before doing so public higher education should explicitly consider the impact of personal financial resources on the undergraduate experience and especially on the middle- and upper-class families that have provided the majority of the university's revenue for instruction over time.

Student responses to a comprehensive survey at 18 major public research universities - all nine University of California undergraduate campuses and nine other Association of American Universities, or AAU, campuses - in 2010 provides insights useful for policy-makers, including:

  • The public higher education experience was different for children from wealthier homes, but the relationship between income and educational experience was not linear. Overall, financial aid has ameliorated the differences in experience for children from families with annual incomes below about $100,000. In that respect, financial aid programmes have been remarkably successful.
  • Nearly all students have been impacted by increased cost of attendance and have changed behaviours.
  • The educational experience of students from families with higher incomes, and especially incomes above $200,000, was better. They were more satisfied, were more likely to participate in enriching activities, and were less likely to worry about family or personal debt.
  • The perception of value of education for price paid varied by state, and the University of California campuses were rated lower than most other AAU institutions.
  • There was variation in rating of value of education within the University of California, but the campuses were not arrayed by admissions selectivity.

    Hence, among these institutions there was no clear evidence of middle-class squeeze in the experience of undergraduate students. There were no behaviours or satisfaction ratings with U-shaped relationships where poor and wealthy students had better experiences than students from households in the middle ranges. The relationships were linear or curvilinear with monotonic increases.

    Note that the lack of middle-class squeeze was based on currently enrolled students' experiences, not the experiences of their parents, students who did not enrol or enrolled elsewhere, or of recent graduates. One question is whether we will see similar findings over time, and as public universities increase their tuition and financial aid programmes.

    The 2010 student experience survey

    The 2010 administration of the Student Experience in the Research University (SERU) project and University of California Undergraduate Experience Survey (UCUESiv) presented a unique opportunity to examine the impact of personal financial resources on the higher education experiences of students at large public research universities.

    The 2010 administration included the University of California campuses with undergraduate programmes and several of the other top 25 public national universities: Rutgers University, the University of Pittsburgh, University of Michigan, University of Minnesota, University of Oregon, University of Texas and, in limited cases, the 2011 administration for the University of Florida.

    In response to concern about the impact of rising costs and declining financial resources, the SERU-UCUES Consortium institutions elected in 2009 to include items designed to collect information about discretionary student behaviours that were likely sensitive to cost and affordability on the 2010 questionnaire.

    The items ranged from book purchases, to roommate and living choices (for example, carrying more debt on credit cards, increasing work hours), to academic decisions (for example, taking more courses to graduate more quickly, dropping plans to double major or study abroad).

    Students could select all items that applied to them and the following results were based on the responses by a sample weighted by campus enrolment to reflect the 2010 SERU-UCUES population.

    The most prominent result was that the majority of students had taken at least one action to reduce costs. The majority of students had bought fewer new books, bought more used books or had used reserved books, and had cut expenses overall.

    Whether these behaviours would yield a negative impact or not is unclear. The non-profit consumer advocacy group, US Public Interest Research Group, reported that 70% of students decided against purchasing a textbook because it was too expensive. They reported that 78% of those not purchasing the text believed that they would perform more poorly. In spite of the convenience sampling interview technique employed by their clipboard-carrying volunteers, the result was very similar to the 73% rate reported here using more rigorous standards.

    This study also found students engaging in many other behaviours to reduce costs that clearly impacted on students' academic experiences. The most common were: took more courses per term (30%), decided against study abroad (28%), accepted AP credit (22%), and took action to graduate more quickly (20%). Several other behaviours might not impact on the academic experience of students but do clearly affect institutions and especially service delivery.

    The most common of these were to apply for financial aid for the first time (36%), decide against study abroad (28%) and accept credit by examination instead of taking the course (22%).

    Among those personal behaviours listed were several about which institutions should be concerned: increased annual loan amount (25%), increased the debt carried on credit cards (16%); and regularly worried about family debt (59%), regularly worried about personal debt (52%) and skipped meals (46%).

    The figures were also analysed extensively to find out if household income impacted on student experience.

    Key findings

    The most important finding was probably that differences in student experiences by household income for students from households below $100,000 were surprisingly unimportant: it was asserted that financial aid programmes had ameliorated differences below $100,000.

    It was also true that students from households with incomes above $100,000 were more satisfied, less impacted by economic factors, and less likely to be first-generation immigrants. The fact that wealth mattered in an enterprise with price tags was not too surprising. It was more surprising that the effects were so limited.

    As the importance of a college degree is increasing, the combination of declining middle-class discretionary income and declining state support for higher education has exacerbated the impact of rapidly increasing higher education costs.

    There is prima facie evidence to consider whether the cost of attendance differentially impacts on students from families with incomes above the threshold for governmental or institutional subsidies and grants but below the level where cost of attendance presents no hardship.

    Are middle class students being squeezed in a way that negatively affects the undergraduate experience?

    The results of this study are clear.

    Patterns of responses by students to the 2010 SERU survey of undergraduates at large public research universities found no U-shaped distributions where middle-class students were impacted more than both poorer and wealthier students. The patterns were flat or monotonic (always going up or always going down even if the slope changes).

    Students from families at all income levels have been impacted by the rising cost to attend. However, financial aid programmes have ameliorated the differences in experience for children from families with annual incomes below about $100,000 and students from families with higher incomes, especially incomes above $200,000, have a better experience overall (for example, they are more satisfied, more likely to participate in enriching activities and less likely to worry about family or personal debt).

    This does not mean that middle-class families are not being squeezed. They very likely are being differentially impacted, but the differential impact has not extended to the undergraduate experience of the children.

    There is reason to expect that the current situation will become worse before it improves.

    Will the remarkably successful financial aid programmes that have leveled the university experience of students from poor and working-class families continue to be adequately funded to meet ever-increasing costs in a budget-cutting environment? Will the real and perceived value of higher education erode in an environment of few employment opportunities? Will the higher education experience degrade for all undergraduates as universities cut programme budgets?

    It is critically important that the undergraduate experience be regularly examined during these difficult times and the SERU project is a good example of an opportunity to track changing perceptions and experiences in a comprehensive and comparative way.

    * Dr Steve Chatman is the director of the Student Experience in the Research University project of the Association of American Universities Consortium based at the Center for Studies in Higher Education at the University of California, Berkeley.

    * This is an edited and abridged version of Steve Chatman's paper, "Wealth, Cost and the Undergraduate Student Experience at Large Public Research Universities", published by the Center for Studies in Higher Education at the University of California, Berkeley. It is published with permission.
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