In most states, truly public colleges are becoming a thing of the past, a trend that’s exacerbating racial inequality.
In every state except Wyoming, the share of revenue that public colleges receive from tuition — aka students and families — has grown since 2001, according to an analysis released Thursday by Demos, a left-leaning think tank. And in 24 states, tuition covered more than half of public colleges’ revenue in 2016. Compare that to public colleges of the past, which got much of their money from state and local funding, and kept the costs for families relatively low. In some cases, they were even free.
“Tuition is far too high, grant aid is far too insufficient,” said Mark Huelsman, a senior policy analyst at Demos and the author of the report. “If you add on top of that minimum wages that haven’t increased in a lot of states, the affordability crisis becomes a pretty massive issue.” More specifically, Huelsman added, the challenges of paying for college have become “both a racial justice issue, and also an economic justice issue.”
The study is the latest reminder that today’s college students are having a vastly different experience financially than their parents who attended college decades ago. Cuts to state funding for college combined with stagnant wage growth means families often have to shell out a much larger share of their budget than in the past to pay for school. Where once students could make a dent in college costs with a minimum wage job, these days students in 38 states would need to work more than 20 hours a week to be able to graduate from a four-year college debt-free.
The trend of public colleges relying increasingly on tuition instead of state funding comes at a time when public colleges are also becoming more diverse, the study found. That means this generation of college students, which includes more students of color than in the past, are less likely to benefit from a government commitment to funding public higher education than their parents’ and grandparents.
“As higher education has become more representative by race, our state and federal policymakers have been vacating the compact with students that previous generations enjoyed,” the study notes.
At the same time that colleges are increasingly relying on tuition instead of state funding, the share of public students of color is growing, the study found. Decades ago, the mostly white student body at the nation’s public colleges benefited from a commitment from state leaders to fund the schools. Now, with more students of color in college, that commitment is waning and these students are sacrificing more of their family budgets to attend, the study notes.
Though, as a result of this trend students of all races are forced to shell out more to afford school, families of color are sacrificing more of their family budgets to attend. On average, the cost of a public, four-year-degree — after scholarships and grant aid are factored in — accounts for about one-third of the median income of black families and one-quarter of the median income of Latino families. For white families, that so-called net price accounts for about one-fifth of the median income, according to data from the study published Thursday.
In some states, where racial gaps in wealth or income are likely particularly large, white families have a big advantage over black and Latino families when it comes to paying for college. For example, in South Dakota, the average price a student pays for a four-year public college accounts for 25% of the median income of a white family and 63% of the median income of a black family — a difference of nearly 38 percentage points.
That dynamic is just one of the many ways that our nation’s college financing system may be particularly harmful to students of color. Black student loan borrowers are more likely to take on debt — and more of it — than their white counterparts to attend college, in part because they have less money to draw on to pay for it, due to the racial wealth gap. What’s more, black student loan borrowers default on their debts at much higher rates.
“We have a system that’s becoming more and more expensive that is requiring a massive amount of family savings or is really unattainable without debt,” Huelsman said.