Do colleges take from the poor and give to the rich?

Celia Baker's article, "How colleges take from the poor, give to the rich," in the 24 May 13 issue of the Deseret News is a perfect example of what can happen when a journalist meets a think tank report.  The report's assumptions go unexamined, its examples become universals, and its conclusions become truth.

The report in question is the New America Foundation's Undermining Pell: How Colleges Compete for Wealthy Students and Leave the Low-Income Behind, which makes the unexceptional observation that the purchasing power of a Pell Grant has been in long decline because its value has become stagnant, state aid for higher ed has shrunken, and tuition at all sorts of colleges has been on the rise. The report's goal is to propose policies that will make it possible for more low-income students to go to college. Again, unexceptional, and, with changes in the demographics of college-going, necessary. But Undermining Pell makes additional arguments that require more scrutiny. Baker does not provide that scrutiny.

Take, for example, the article's title, which mimics the subtitle of NAF's report.  Do colleges take from the poor and give to the rich by means of what the NAF calls a "an elaborate shell game" wherein an institution reduces aid available to poor students because of their Pell grants, and re-directs that aid to "wealthy" students?  No.  Instead, institutions offer need-based aid and merit-based aid (academic scholarships) that stack on top of other aid (federal, state, outside scholarships, savings) to reduce the amount of money a student pays out of pocket.

Take this example.  Two students with the same academic background are accepted to the same college.  One qualifies for a full Pell Grant, the other does not qualify for any Pell aid.  How do their financial aid packages compare?

Student one gets $5500 in Pell aid, $3000 (for example, institutions set their own need-based aid policies) in need-based aid, and $15000 in merit aid, for a total scholarship package of $23,500.  Student two gets $15000 in merit aid  and $2000 (for instance) in need-based aid.  For which student does college cost less? Student one.

But Baker and NAF would argue that the situation described above is a perfect example of the problem, in that the amount of merit aid dwarfs the amount of need-based aid.  They would argue further that poor students should get more aid than "wealthy" students, because those "wealthy" students have greater means to pay for college.  But is student 2 "wealthy"?  Almost certainly not.  As the report notes, Pell funds are not available to students whose family income tops $50,000 a year.  The determination is made by means of the Expected Family Contribution (EFC) component of the FAFSA.  EFC is a notoriously complex estimate of how much a family can contribute annually to a student's college costs.  Suffice it to say that very few families are actually able to pay as much out of pocket as the government suggests they can.

So is there a shell game going on, where Pell funds are taken from the poor and given to the rich? Or, as Baker puts it: "Like a carnival conman duping an earnest mark, colleges are using Pell grants to take the place of institutional aid they would have given to needy students, then shifting those funds toward recruiting wealthy ones through "merit aid"?

 Only if by "take from the poor and give to the rich" you mean "using Pell funds and other income to pay for educating students."  Otherwise, no.  In fact, as I have argued before, if there is a subsidy it flows from students with weaker academic backgrounds (who thus receive less or no merit aid and must pay more out of pocket) to students with stronger academic backgrounds.  At my institution, the proportion of students with need has increased, not declined over the past several years.  This is due to families being willing to borrow a bit more for the indisputable benefit of a college degree, to subsidies that flow to all undergraduate students from donors, graduate student tuition, etc., and  to my institution's willingness to increase the amount of aid available to students.

 It is simply wrong to suggest that merit aid reduces aid to low-income students, unless those students are so academically weak that they do not qualify for any merit aid.  Otherwise, merit aid serves them well, and coupled with need-based and federal aid, reduces their cost of going to college. Further, merit aid provides a baseline predictability to a student.  If a family's financial situation improves, the amount of need-based aid might decline.  But merit aid stays steady.  So for a family budgeting for four years of college, merit aid is a key component of their financial aid approach.

I could go on at length about other assumptions and assertions in the article and report.  But let me address one more directly.  After complaining that colleges unfairly treat low income students be means of their institutional aid policies (preferring merit aid over need aid) Baker reports a contradictory assertion from the NAF report.  They suggest that institutions actually try not to enroll low-income students, taking a "passive-aggressive approach" to low-income students called "gapping" wherein they "offer needy students aid packages much too small to meet their needs, deliberately underfunding them to discourage enrollment." (The quotes are Baker's.)

Two responses.  One, yes, colleges charge more for tuition than they give back in aid.  No institution, even the wealthiest ones with massive endowments or those in states that still provide strong subsidies, can stay open if students do not pay tuition.  Eliminating "gapping" is the same as not bringing in revenue.  And as I have shown above, the wealthier the student, and the weaker (academically) the student, the bigger the "gap" between institutional aid and total cost of attendance.

Two, no enrollment professional I know of would go to all of the work and cost of recruiting a student, evaluating that student's application, and creating a financial aid package in order todeliberately not enroll a student.  We don't have the time, or the resources.  But more importantly and contrary to the article's assertion, we want low-income students to go to college.  And we believe that they will flourish at our institutions.

Baker and NAF have the luxury of calling for a world where low-income students can go to any college they want for free due to the largesse of the federal and state governments and the generosity of the institution.  We do not live in that world.  So my job, and the jobs of my staff, is to do something much more difficult: enroll a diverse class of students who will learn, flourish, grow, graduate, and succeed after graduation, while at the same time bringing in enough tuition dollars to ensure that the education those students need is, in fact, available to them.

Seven ways service can make communities smarter

(The following post is a distillation of my opening remarks at the 2013 Central Region Conference on Service, held on 9 May 2013 in West Valley City.  Thanks to the organizers for the opportunity to participate in the conference.)

Ten years ago I would have been speaking about the need for more service in our communities, particularly from young people.  But it is no longer the case that young people are lagging in service or lacking in a commitment to the common good. Schools have a more intense focus on service, young people serve more, and the expectation to be involved in the community is more broadly felt now than at any time during my lifetime.

But while service happens more, and is more central to our culture, it is not clear to which ends we hope service takes us as communities. In many ways, our problems seem larger than ever. Income inequality is greater, poverty is rising, educational attainment at the national level has hardly budged in years, trust is in decline. 

So how can we make sense of the contrast between the blossoming of volunteerism and the coarsening of public life?  There are of course many potential explanations--that service has actually slowed the decline in public life, or that our problems require more money and power than service can provide, for example.

I would like to propose an additional explanation, one that doesn’t get talked much about, but which I think is essential to the well-being of our communities. it is that the volunteer sector has failed to focus on one thing that makes community life better--getting smarter.  By "getting smarter" I do not mean raising student test scores or adopting fancier software or better planning metrics.  I mean instead that service organizations, volunteers, public officials, and philanthropists should help communities learn together, be more reflective,  respond to problems more wisely, be more democratic, and have a better politics.

So let me offer seven ways of thinking about the components of service and civic life that are likely to make communities smarter in the ways I have described above. 

My thinking on these topics has been influenced by several books on community and civic life, all of which share a focus on local, self-organizing communities over big, centralized communities.  Those books are Rebecca Solnit's A Paradise Built in Hell: The Remarkable Communities that Arise in Disaster,  Jean Bethke Elshtain's Jane Addams and the Dream of American Democracy , Mary Parker Follet's The New State: Group Organization the Solution of Popular Government , Milton Kotler's Neighborhood Government: The Local Foundations of Political Life, and Roger Scruton's How to Think Seriously about the Planet: The Case for an Environmental Conservatism.  

Taken together these works, and my own experience with volunteerism as a source of community change, suggest adopting the following ways of thinking if the goal is a smarter community:

1. Broaden the definition of service--too much service or volunteerism (including service-learning) begins with a tightly defined role for volunteers (tutor this child, for example) and a pre-determined outcome for that service.  But the stories of communities that get smarter suggest that service needs to be more broadly defined, with roles improvised in response to particular issues.  Improvised roles both ensure that old responses don't get blindly applied to new settings, and that volunteers must stretch intellectually and politically in response to new challenges.
2. Tighten the definition of community--for a sector that is devoted to community service, we do very little to think about what a community is, or what sort of community is best situated to respond to a problem. Instead, we talk about "serving the community" or we really mean service to individuals rather than a community.  But an effort that makes a community smarter must constantly return to the question, "who is our community."  Generally, the most successful learning communities are defined either by narrow geography (a neighborhood) or by community of interest (a church).
3. Narrow the scope of the problem--too often the rhetoric of problem-solving gets ahead of reality, and so we talk about eradicating poverty, or raising the global competitiveness of the nation. But service can not erase poverty or fix America's schools.  Poverty and education have too many local components. But while service cannot fix them, but it can can respond to poverty in a particular neighborhood or a particular church.  It cannot "raise test scores" but it can help a particular school.
4. Make mutual aid the way of working--service-learning programs often talk about "reciprocal relationships" where both parties in service receive benefits from the act of service.  But in the stories of communities that get smarter, people don't serve each other directly.  Instead, they serve a cause--responding to a disaster, fixing a city's sanitation system, etc.--and by so doing people's lives improve in indirect and deeper ways.
5. Rethink the role of politics-- Volunteerism either eschews politics or calls for political solutions to a problem. But in instances where communities get smarter through service, politics plays a different role.  It verifies and enshrines the learning of a community by making policies that sustain the headway that service has made.  In this sense, politics is a learning outcome, or to borrow historian Christopher Lasch's formulation in The Revolt of the Elites and the Betrayal of Democracy, “ democracy[is] not as the most efficient but...the most educational form of government."
6. Consider service itself primarily as a way of learning--If you talk with people involved in building smarter communities through volunteerism, they will describe service as the activity that teaches them about the community, about others, and about themselves.  This formulation flies in the face of service-learning and other formal approaches to service which tend to think about service as a way of doing good that takes on meaning only  through reflection.
7. Ensure that love is the most important outcome--in almost every story of communities learning through service, love emerges as the most important outcome for the participants. But the formal volunteer sector almost never talks about love, as a motivation or an outcome. We ought to attend to at least three types of love as the outcomes of learning through service. For some people, it is the love of place that deepens (Scruton is especially good on this point), for others, the love of the issue, and for still others, the love for other people.  But whatever form it takes, the language of love and the evidence of love are the things that endure once the initiative is done. And it is love that gives participants strength to continue to learn and serve.