There’s No System In Our Financial Aid System

Sara Goldrick-Rab is a respected professor of education with a rare trait: she is comfortable in the role of public intellectual. Her most recent book, Paying the Price: College Costs, Financial Aid, and the Betrayal of the American Dream, has generated a good deal of well-deserved interest. It is a data-driven study that argues that the American financial aid system is inadequate in today’s economy with today’s college costs. Goldrick-Rab makes clear that the failure of many students to graduate from college is caused in great part by our collective inability or unwillingness to fund their education.

Several years ago a foundation – the Fund for Wisconsin Scholars – started a program to distribute $5 million per year to help students in the state’s public institutions (both two-year and four-year). Goldrick-Rab and Douglas Harris, an economist, were charged with developing a study to assess the impact of the fund. That study is the backbone of the book. Goldrick-Rab taught at the University of Wisconsin Madison – the flagship of a strong state system. She recently decamped to Temple University in a very visible conflict. Goldrick-Rab and Harris were key players in educational research in Wisconsin. They connected their work with the Wisconsin Center for Education Research, and the overall project became a key part of the Wisconsin HOPE (Harvesting Opportunity for Post-secondary Education) Lab, which continues to work on critical questions of access, success, finances, policy, poverty and higher education.

The introduction to Paying the Price sketches the book’s thrust quickly. For the past few decades, more and more Americans have hoped to get a college education. The trend is likely to continue. People recognize that college is critical to economic success. However, as numbers of students in college have increased, state funding has decreased. The nation’s overall financial aid system, which was designed for a different purpose at a different time, has become stretched to the point of inadequacy. Wages for most Americans have stagnated, particularly after the 2007-8 recession, putting poor, working class and middle class Americans in a squeeze. The data is clear:

• In 2013, middle-income families earned on average about $64k a year – 5% less than in the earlier decade.
• Since 2000, community college costs are up 28% and four-year college costs are up 54% nationally.
• Today 75% of all families pay more than 20% of their annual income for higher education – after all grants are tallied.
• 48% of Pell grant recipients earn a degree/certificate in 6 years.

Poor, working class and middle class families are not making more money. At the same time, the price of college has been steadily and dramatically increasing. Caught in this economic box, students face tougher threats to the pursuit of higher education. The consequences of less money and fewer options are clear, Goldrick-Rab writes: fewer graduates, fewer successes, less generational mobility, and a financial aid policy and practice greatly in need of significant restructuring and reform. It is a powerful thesis.

The stories of six students from the study make the larger argument understandable and easily grasped. The additional grants of money helped ($3,400/year to university; $1,800 year for community college) but they did not have all that much of a difference when it came to outcomes. The book explains why, highlighting the many structural obstacles to completion.

Goldrick-Rab does not spend much time on the history or the policy debates that have led to our current array of grants and loans. Instead, she focuses her effort on how everyday people try to juggle work, family obligations, and higher education. She listens closely to students and their families, assessing their options, their decision-making, and their outcomes. Goldrick-Rab writes with deep understanding and sympathy for the students who are the subjects of her study. She explains their choices, their circumstances, and their options with a keen eye for detail. She does not make excuses. Nor does she paint the students in extraordinary colors. Instead, Goldrick-Rab works to help the reader see how these students are chasing a fundamental good: bettering themselves through education – and how the overall environment makes that aim very difficult.

Goldrick-Rab also talks with the financial aid advisors, faculty and administrators. She explains their decision-making and the reasons for their actions. She also highlights some of the misconceptions and misunderstanding that pervade higher education. For example, one of the great myths of higher education are “Pell runners.” These unsavory characters supposedly dash from institution to institution, collecting Pell grants without any serious commitment to degree completion. They are the welfare mothers of twenty-first century higher education, bogey men who have spurred tremendous institutional costs in policy and practice to prevent minor financial threats. However, they are not a real problem, but they are treated as a bona fide threat. Goldrick-Rab emphasizes that in terms of fraud and abuse, higher education financial aid is much more honest than all other federal welfare and efforts.

Goldrick-Rab singles out the hardship of life in Milwaukee for special attention. Milwaukee is one of the most segregated cities in the US. People of color who live there face tremendous barriers to achieving middle-class income and lifestyles. Higher education stands as a key barrier/opportunity. The struggles of poor college students in Milwaukee serve to underscore the fragility of the American dream for many urban students.

Goldrick-Rab has interests broader than those of students in Wisconsin. She argues that we can do better nationally. The book greatly advances the value and practicality of free or reduced price college for all that seek the education.

Any thoughtful student of broad-based policy will recognize the massive disconnect between high-level expectations and the challenges of changing life on the ground. Financial aid policy epitomizes that frustration. Sizable sums are allocated yet they often do not do what politicians intend or hope. Paying the Price explains that political and educational leaders do not realize the depth of changes in the world of our students. One cannot buckle down and work their way through school anymore. Part-time jobs do no exist at the same scale and those that are available do not pay enough or offer enough stability to fund a college education. Many of those who aspire to higher education are burdened in ways greater than the working-class and middle-class students of 30 years ago. Add to the mix, less Pell, less aid, higher tuition, greater fees, and less income. The consequences are disastrous. The American dream is simply not attainable for many Americans. It is not the people who have changed from fifty years ago; it is the environment. Today’s students cannot achieve at the same levels in great part because of the inadequacy of our financial aid.

The students’ narratives of hard choices will be familiar to anyone who works in a community college. Talk with our students and the stories are achingly familiar. This book, though, is not just for those that work with those who have less money. It has relevance for all of higher education and those that care about our nation’s future. Our collective commitment to opportunity and mobility means that we should do better. I urge you to read Paying the Price.

David Potash