Aug. 24, 2007

Don’t Just Follow the Money

The wide gaps in educational attainment between people from low-income backgrounds and wealthier ones tend to lead policy makers to a logical conclusion: It’s about the money. If low-income students are enrolling in college at significant lower rates than others, they argue, it’s essential to increase spending on need-based financial aid and make sure the students know the money is out there. If needy students drop out of college at higher rates, then surely money — or lack of it — is the key factor there, too.

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But a new study questions that thinking. The study, conducted by researchers at Berea College and the University of Western Ontario and available (for $5) through the National Bureau of Economic Research, examines the extent to which “credit contraints” — a lack of access to loan funds — factored into the decisions to drop out of college by a group of low-income students who had had most of their direct college costs paid for.

The answer: Not very much. The researchers conclude that more than 80 percent of the students who dropped out had done so for reasons other than financial ones. “The large majority of attrition would remain under the generous policy in which direct [college] costs are zero and students are given access to loans” that could be used to pay their other costs of living.

That doesn’t mean that money doesn’t matter, says Todd Stinebrickner, an associate professor of economics at Western Ontario, who co-wrote the study with his father, Ralph, a professor mathematics and computer science at Berea, whose students were the subjects. But the implication of the study is that “there’s other stuff that’s important, too,” he says. “While it’s very tempting to view a relationship by family income as being due to money per se, if you do, you might ignore a lot of other things. And for policy makers, if you think it’s one thing and it’s really something else, you might get the wrong policy.”

Stinebrickner is careful to say that the study does not aim to undermine in any way the significant efforts that are being undertaken to make college more affordable for low-income students, such as the push, after several years of flat federal funding, to raise the maximum Pell Grant. But what’s striking about the students in the NBER study, he and others note, is that they’re at a college, Berea, that, because of its distinctive religious and service mission, charges no tuition and largely covers students’ other direct educational costs.

The fact that even there, the proportion of first-year students who drop out by the start of the second year is about 23 percent, suggests “it’s got to be something else” other than financial need or lack of access to borrowing.

Exactly what those other things are, Stinebrickner acknowleges, the research so far has not uncovered (future studies on Berea’s rich longitudinal database are planned). But possibilities include such things as academic struggles, their satisfaction in college, how comfortable they feel in the environment, or just a feeling of “mismatch,” he says. Each of those factors may require different tactics or solutions, and if college officials or policy makers are focused entirely on financial issues, “they may miss other things,” Stinebrickner says, that would require examining campus culture, for instance.

The important finding out of the study for policy makers, says Christopher Avery, the Roy E. Larsen Professor of Public Policy at Harvard University, is that when trying to figure out “what can we do to help students with difficult family situations in terms of income, the natural tendency is to say, ‘Let’s throw some more financial aid at them.’ But that may only be addressing some portion of the problem.”

— Doug Lederman

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Comments

It’s not just about the money

Most researchers studying college participation recognize that the gaps in college entry and persistence between rich and poor are due to a lot more than just money. Yes, adequate financial resources are a necessary piece of the puzzle, but they are not sufficient themselves to close the gap. We know that other social and cultural factors play an important role too. This study makes clear that even at a fairly selective institution like Berea, low income students still face barriers to success.

Don Heller, Professor at Pennsylvania State University, at 6:15 am EDT on August 24, 2007

The purpose of the study, funded by what appears to be a right-wing lobbying organization [1], is to suggest that providing funding for low income students won’t help them graduate.

It is likely that the students, because they couldn’t afford tuition, enrolled in one of few schools that didn’t charge tuition, only to find that a university with a “distinctive religious and service mission” wasn’t for them.

It’s true that money doesn’t solve every problem a poor student faces; after a lifetime of poverty they need support and affirmation. But if they drop out, you can be sure, that one way or another, it’s because of the poverty — even if misleading research appears to show otherwise.

[1] http://www.mediatransparency.org/recipientprofile.php?recipientID=243

Stephen Downes, at 7:15 am EDT on August 24, 2007

It’s Not Just the Money

It’s not just the money to pay for college but money is a key factor in the decision of many students to drop out of college based on my experience at Mercy College. Many students drop out because of family issues which require money to solve; the student gives up college so that she can contributes more significantly to household expenses. Many of our students were first generation college students and were often viewed as the “leader” in the family; they were expected to “fix” things when there was a problem — a sick parent or child, a family member that lost a job, etc. This made continuing in college very difficult if not impossible — the foregone income is a critical issue for many of these students.Lucie Lapovsky

Lucie Lapovsky, at 7:15 am EDT on August 24, 2007

full report

I found a free copy of the full report.

http://economics.uwo.ca/faculty/S...rickner/recentpapers/constraints.pdf

Prof, at 8:05 am EDT on August 24, 2007

The findings in this report are not new for those who have been working with under-represented students to ensure their success as undergrads. For example, the retention rate in a program developed for first generation students at a highly selective comprehensive university in Virginia has been consistently higher than the instutitional average because of the support system that was incorporated into the program from the onset. This program was built on the Meyerhoff model (arguably one of the best programs in the country for ensuring excellence and success of under-represented students). That calls into question some of the state-wide programs that currently focus on access and affordability. Although these two factors are important for getting students to the campuses, they do not satisfy a key component for retention and ultimate success: support services! Without a well-planned support system, some of these expensive programs will not be able to achieve the intended goals.

Bottomline: Accessibility without support is not an opportunity for success.

Dan WUbah, Profesor at University of Florida, at 8:30 am EDT on August 24, 2007

Question 6.E.1

Question 6.E.1 and 6.E.2 might be testing for attitudes about student loans in general, and not whether or not they are “credit constrained".

Low income students with credit card debt issues, or with parents struggling with consumer debt would probably view these questions differently than those students without these problems. Consequently, I don’t see these questions as “carefully worded” at all.

Glen S. McGhee, Florida Higher Education Accountability Project, at 8:45 am EDT on August 24, 2007

Money and other factors.

I would like to echo Lucie’s statements. I have found over twenty plus years in a financial aid office that when low income students drop out it is for a whole host of reasons related to the culture of poverty. After all, financial aid is only to pay for “educational” expenses.

Lack of financial literacy, or even literacy itself makes it difficult for the students other family members to know where to look to marshall the resources they need to “lift themselves up by the bootstraps” as so many of my conservative republican friends are fond of saying. The mistaken assumption is that if provided with a resource, well of course you will lift yourself up. For that reasoning to work though one has to posit that these folks already have the knowledge and sophistication to know what to do when the resource is provided.

That approach might work for you and me, but not for folks who have never had a loan, or a credit card or a car.

Don’t get me wrong, I am all for lifting people up, but if I give a wino on the street a $100 dollars, I don’t expect that they will be living in the Trump towers tommorrow.

This is the same issue being faced by the “welfare to work” movement. In many states the dawning revelation that you can’t just put poor people in a low wage job with no healthcare, daycare or prospects for the future, and expect them to stay off welfare.

Sure, it is a great way to reduce expenditures on public assistance, but then saving a few bucks is not the intended goal.

Bob, at 8:45 am EDT on August 24, 2007

Students Under the Social Gun

How about those who have to step over crack dealers on their way to public transportation where it will take over an hour and several station switches just to GET them to class? How about those who have to go to court in the middle of a class session? Those who break their parole and end up back in jail before the semester ends? Those who don’t get the kind of academic and student support they need when they arrive with a sub-standard K-12 education? Those who show up in hip-hop-sexy-wear and are sent home to change? Shall I go on?

kgotthardt, at 9:10 am EDT on August 24, 2007

The UVA program shows...

The Berea study is good in that it brings the issue to light but may be too limited in scope to be of much value in revealing the other factors. The UVA program shows that low socioeconomic status is more than just money. It isn’t rocket science, but it is complex, to recognize that there are psycosocial issues these students must grapple with. Programs like the one at UVA do demand a greater commitment from the institution and from policy makers than just making more money available. Maybe that’s why we don’t see more of them. I can’t help but add that the community college culture is more supportive of students in recognizing those non-monetary factors.

RW, Community College, at 9:25 am EDT on August 24, 2007

A posse

Money is significant for access, but it is a house without a foundation unless there are comprehensive, experientially reflective efforts to support before and after the students survive. Many schools do this well. Check out the Posse Foundation, www.PosseFoundation.org as an example of a group that not only addresses access, but has also demonstrated great success in persistence (90%+ graduation rates).

Mickey, at 9:25 am EDT on August 24, 2007

While there are of course multiple reasons for students dropping out, most remediable, finances are very important. It is not the cost itself, but the earnings lost to a family or larger network. There is also a reasonable fear by poor people about loans and getting trapped in debt. These issues do not seem to have been addressed by this study. Thomas Bender

Thomas Bender, Professor at New York University, at 9:25 am EDT on August 24, 2007

It IS about the money.

The basic argument here is flawed. The problem isn’t about tunition, room and board, or any of the direct expenses of going to college. The problem is the opportunity cost of four year’s income. Even if higher education were entirely socialized there would still be an attainment gap between high and low income students. That fact of the matter is, at 18 many young people are expected (by family or society) to work. It’s a larger problem than simply being able to pay tuition.

Jon L Albee, Graduate Student at Rice University, at 10:00 am EDT on August 24, 2007

the complexities of dropping out

I was a low income student (just below the poverty line), and I dropped out. My first year at USC I had no tuition to pay; the California State Scholarship and some assistance from USC covered it in full. The second year I could not figure out how to go back, because my parents couldn’t afford to stay in the Los Angeles area, and I was on my own. Living expenses were the problem, not tuition.

At the time, I couldn’t get a part-time job anywhere. I was able to get a job at Jet Propulsion Labs writing telemetry software for the Voyager mission—but I couldn’t get a job in a burger joint.

At least my experience was that there weren’t enough job opportunities for students like me. I could have easily worked 10-15 hours a week, and even at minimum wage, it might have been enough to keep me in school.

Clayton E. Cramer, at 10:00 am EDT on August 24, 2007

Academic performance reasons

The low income students in the sample performed significantly worse than others. Clearly, low performance should be the most obvious correlate to drop-out rate, yet it remains univestigated in the study.

This study, as with most “academic” studies, suffers from the lens through which the researchers see the world. They are concerned with correlations in drop-out rate and money because dominant academic theories (Marxism) seek to tie all observables to class. Sometimes the values, culture, and habits that students learn in their families determines their outcomes.

ACF, at 10:15 am EDT on August 24, 2007

Money is the main reason, but not the only reason

The existing research never suggested that money was the only reason why low income students dropped out, just that it is the most significant barrier to success. There are a variety of obstacles, with money chief among them, that prevent low income students from matriculating, persisting and graduating. If only it were as simple as writing a check! Unfortunately, the students who fail to persist (regardless of whether they are low, middle or upper income) seem to have a tendency to be disuaded by obstacles. The ones who succeed are the ones who are most stubborn in the face of adversity. Money coupled with support and active intervention is the most successful. But you can’t get anywhere without money. The lack of adequate financial support undermines efforts to help students succeed. This is why it is important to eliminate loans from the financial aid packages from low income students. But it doesn’t end there. The most successful programs are those that not only provide financial support, but actively intervene on behalf of their scholars and provide them with the support they need to address and overcome the obstacles on their way to academic success (and eventually, independent success in the real world).

Mark Kantrowitz, Publisher at FinAid.org, at 10:15 am EDT on August 24, 2007

Maybe It’s Generalizable to Warren Wilson College

About a co-author of the study Doug Lederman wrote, “... a professor of mathematics and computer science at Berea [College], whose students were the subjects.”

I have just “breezed through” the study, but, without even looking at it, I could assure you the students at Berea College and the financial and social circumstances under which they matriculate there are so out of the ordinary this study is hardly generalizable to students anywhere else ... least of all the University of Western Ontario.

And really, who has ever imagined that the primary reason students dropped out of college was financial? Certainly not anyone who has hung out with and talked to them. The authors have propped up a fragile straw man and then shot him down.

Frizbane Manley, at 10:45 am EDT on August 24, 2007

More than money

It’s not just about the money, or even the culture of poverty. It is about your family asking — constantly — what exactly you are doing and why. It is about your friends (who are not in college) making jokes and claiming you are uppity. It is about not getting the jokes and the references, about never being able to anticipate what comes next.Finally, it is about having to choose — either you go back where you came from or you leave everything you know behind and become a stranger in a strange land.

Kate, Graduate Student, at 10:45 am EDT on August 24, 2007

ACF wrote “dominant academic theories (Marxism) seek to tie all observables to class. Sometimes the values, culture, and habits that students learn in their families determines their outcomes.”

Ahem — values, culture, and habits ARE class.

Kate, Graduate Student, at 10:45 am EDT on August 24, 2007

Why Students Leave College

There are reasons why students leave a school that are not money related. The whole world does not revolve around the dollar! Take a look at this posting. It might help. It is from a study into reason why students quit a school.http://academicmaps.blogspot.com/...dents-leave-and-what-you-can-do.html

Neal Raisman, at 12:00 pm EDT on August 24, 2007

How shocking....

...that the factors are associated with poverty — single-parent households, undereducated parents, delinquency, crime, high levels of television consumption, lousy K-12 schools, etc, etc., might also have an effect on college persistence.

Prof. Challenger, at 12:05 pm EDT on August 24, 2007

It’s the money, but also the culture

It’s the money, but also the culture and expectations. Hereabouts the expectation is that when you graduate from high school you go to work. And, oh yes, you take some courses at the local community college. Eventually you may get through but not likely. Even students who qualify for good 4-year colleges out of the area with lavish financial aid don’t go because moving out of the family home before you get married to start your own family is just not on. And even then, the idea of moving far away from the family network isn’t acceptable.

Most low income students who go this route never get the idea that school is a full-time job (even if you have to take a second part-time job as well) or plug into college as their community, social network and source of extra-curricular activities. They live at home, go to work, and take courses on the side. In principle it should be possible to get through this way, and older students who are highly motivated do, but it just doesn’t work for traditional-aged students, particularly those from families where graduating from college is seen as a desirable extra but not a necessity.

Maybe it’s a special case of something more pervasive in the culture. Low income people get stuck in poverty traps, in areas were there are few jobs and no decent ones and, short of a natural disaster like Katrina or the Dust Bowl, most don’t leave to make their fortune elsewhere. The local family and social network is basic, a necessity; personal advancement is a desirable extra but a long-shot

LogicGuru, at 12:05 pm EDT on August 24, 2007

It’s no single factor

My experience is mostly with rural students of limited means (poverty or near-poverty). And, speaking from that perspective, many of the comments here are right on the mark. Kate’s first comment resonates strongly with what I have observed — the decision to invest in post-secondary education is less obvious socially, politically, and economically for the rural poor than it is for suburban middle-class kids.

Not only are the support structures lacking outside the school environment (in part due to short-term opportunity costs, in part due to lack of cultural capital), but gaining maximal economic return on schooling often involved moving out of the rural environment after graduation. Those are major hurdles to get over.

Add to that the fact that, in many rural schools, the “poor kids” get shuffled into vocational tracks or, just as debilitating, into “general” tracks where academic subjects are approached on a distinctly non-conceptual basis, and you’ve created a situation where lower- and lower-middle class kids face steep educational challenges — not only new material, but an unfamiliar set of demands in terms of learning style — while coping with a lack of support (sometimes negative support) at home, in order to achieve ill-understood gains which will require them to leave the only social environment in which they are comfortable.

Money is absolutely necessary. But money, alone, can’t possibly address this set of issues.

Rick Martin, at 1:05 pm EDT on August 24, 2007

either you go back where you came from or you leave everything you know behind and become a stranger in a strange land

Congratulations, you’ve just discovered the function of liberal education: to free us from the provincialism of our upbringing. You just haven’t realized that it happens to everyone else, too, and not just you.

Unemployed PhD, at 2:45 pm EDT on August 24, 2007

Culture shock in college

Kate is somewhat right: leaving everything you know behind can be a pain in the psycyhe, or not. Anecdotal articles have revealed some fine students from the ghetto or barrio who have gone off on full scholarships to Ivies and who have felt painfully out of place—and not because of the “culture of poverty.” But, still, most adjust. I did, as a working-class kid among the preppies—luck of genetic resilience, maybe, or a strong enough ego created by high school successes.I know, though, that adjusting can be tough in spite of a “liberal education.” The issues are not educational, but very personal, the old problem of the “scholarship kid” among the privileged, although the social mixture even at the “elites” is a hell of a lot more diverse than it was at Harvard in the 50’s.

Dave, USC, at 3:08 pm EDT on August 24, 2007

It’s a sad state of affairs if after all the studies that have been written, we still are surprised that money is not the only barrier to getting a college education. The really successful programs which support low income, first generation and minority students successfully through h.s. and into college, and then through college, are the ones that cause the students to alter their belief about themselves—from a a belief that they are loosers who will always be left out of the game, to appreciated individuals who have what it takes to live high quality lives in which they achieve their dreams. Once this mindset is altered, coming up with the money to go is just a technicality.

freecollege, at 4:40 pm EDT on August 24, 2007

Hate to say it, but isn’t that part of the purpose of higher education—to enable the lower classes to escape their garbage culture, to join the upper middle class—and if possible to bring their families with them?

I escaped. I detest where I came from and never want to go back. I detest the people I came from. The problem is even at an elite college it’s not easy to get in. The aim should be enabling students to escape from their background and join the upper middle class. It isn’t that people don’t want to—of course they do. The problem is that it ain’t easy.

LogicGuru, at 9:40 pm EDT on August 24, 2007

Why Students Stay

It would seem to me time would be better spent looking at why students stay from that same demographic group. Many students will persist despite all odds — money,family issues, etc. What makes them stay? We would do better by capitalizing on those factors as an understanding of why some persist and why others leave.

Peggy, at 9:40 pm EDT on August 24, 2007

Get a grip

” .. The purpose of the study, funded by what appears to be a right-wing lobbying organization ..”

.. merely reinforces empirical research (not just political-gas) by Jay Greene (PhD, Harvard) that nearly everyone in the USA who is capable of, and willing to, attend college, is attending.

http://www.manhattan-institute.org/html/ewp_08.htm

Mrs. Clinton’s trainees just never get it. It is not about money — look at Lindsey, Paris, and Nicole.

It is about personal discipline, about strong families, and people/volunteers who authentically care and not another army of $48,000.00/year ($18,000.00 in benefits) government bureaucrats and edu-crats.

Even Ms. Hilton’s and Ms. Ritchie’s parents tried to instill personal discipline in them — and if you need to review that topic, read the previous IHE story.

Mrs. Clinton’s trainees never get it. It is why the U.S. has trillion$ ($XX,000,000,000,000.00) in unfunded social-program liabilities. All the parsing and half-truths in the world won’t fund all those vote-buying ploys.

Buzz, at 12:25 pm EDT on August 25, 2007

Goals?

As a long-term instructor for college success courses, I see a common thread running through, but not emphasized in many posts. The lack of an understanding of or committment to one’s goals leads many tentative students to work more hours for pocket money or to help their families pay for food and rent.

College’s and universities’ use of “Excellence” in marketing lingo doesn’t help to focus tentative students. Preppies (as mentioned above) aren’t worried about careers quite yet — they’ll probably jump into the family business or a friend of the family business.

General education, liberal education, Humanities has always been for the sons (and daughters) of the wealthy.

Encouraging a son or daughter to attend college to “be more successful” or “make a good living” is an indirect goal at best. As students begin to understand the more abstract reasons for higher education and perhaps even more important, as the families start to understand the possibilities and the importance — college graduation becomes more feasible.

Financial aid doesn’t cover everything (as many above have stated) and a kid who can’t afford soap, toothpaste, deoderant, or the occasional soda or cup of tea is painfully made aware that they do not fit in.

Was Chaucer’s dig at the “scholar” (he would sell his cloak for a book) pointed at some over-educated, starving scholars that he knew way back then?

Until financial aid can help the fully or mostly-employed scholars who are devoted to their own education and enlightenment, part-time or partly committed students will continue to drop out in droves.

. . . but then, for the capitalist right-wing, pseudo-religious, Darwin is the real guiding theorist: only the strongest or wealthiest will survive.

Dr. F. Gump, at 6:05 pm EDT on August 25, 2007

Where?

” .. Until financial aid can help the fully or mostly-employed scholars who are devoted to their own education and enlightenment ..”

.. and as soon as you post the name of the country/countries with that benefit, 250,000 applications will go forth.

That country’s name? Darwina? Utopia? Oz?

Buzz, at 9:00 pm EDT on August 25, 2007

Ahem — Kate

Perhaps money is necessary — but not sufficient — to meet the employment criteria foisted on the public by Duke Power v. Grigg?

That is, the four-year college degree, controlled by the Public Education Monopoly (PEM). Without the PEM-certified degree — otherwise-qualified applicants need not apply.

If Mrs. Clinton authentically cared about poor kids (I’ve been one), she’d give them educational options.

Then again, the NEA, AFT, AAUP, and other unions would come down on her like a ton of bricks. She’s no fool — heck, she’s a beef futures whiz.

Buzz, at 1:20 pm EDT on August 26, 2007

wha?

Umm, why blame Mrs. Clinton for not ending social programs, when Republicans, with control of all three major branches of government over 6 of the last 8 years, have also done nothing to end them? How many years was it before ol’ Dumbya vetoed a social program? That’s right...he still hasn’t. Selective criticism is not an admirable trait, Buzz.

And what did the tax increases of the early to mid 90’s (passed by Bush the 1st and Clinton) lead to? The greatest (and arguably 2nd) period of economic prosperity in the U.S. 20th century. Sorry, buzz — a fact is a fact.

PS, at 8:35 pm EDT on August 26, 2007

Try reading?

” .. And what did the tax increases of the early to mid 90’s (passed by Bush the 1st and Clinton) lead to?”

Uh, remember someone named Reagan? As in structural changes in investment environment? Like the Internet? And who can forget Mr. Perot, who gave us Slick Willie?

Yes, raising taxes to hire $50,000.00/year (total compensation) slackers who just show up — barely.

Makes enormous sense — like emulating Canadian health care, which Canadian film journalists used to mock and trash a (suburban) Flint filmaker.

Buzz, at 8:30 am EDT on August 27, 2007

And how much did THIS study cost to “discover” what those of us in higher education, especially at the community college level, have known for years?

Dr. Lisa, at 10:35 am EDT on August 27, 2007

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