3 Ways to Close the Income Gap, and They All Start with College

By Michael Collins, vice president at JFF

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The college admissions scandal may be the most brazen attempt to cheat the system, but for low-income students, higher education has been broken for a long time.

The deeper disgrace is a college admissions system that keeps high-achieving low-income students out of elite schools — due to our own public policies — and the income inequity these practices perpetuate.

But there are steps we can take to begin to narrow the income gap, and we need to make them immediate policy priorities. Here are three ways to help ensure that low-income students gain the skills and experiences they need to secure well-paying jobs that lead to family-supporting careers.

1. Get More Low-Income Kids into Elite Schools

Students from upper-income families are concentrated in our nation’s most selective institutions. These colleges and universities have the most resources and high graduation rates. At these select institutions, 88 percent of all students graduate within six years, according to the Center on Education and the Workforce at Georgetown University.

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Students from lower-income families are concentrated in our nation’s open-access institutions, such as community colleges and technical schools. (These students are more likely to be Hispanic and African American, older, and attend college part time.) Most nonselective institutions are under-resourced and have lower graduation rates.

To change this, we need to stop over-relying on standardized test scores, which generally track with family income, and we need to revise college affordability policies.

Selective institutions put a disproportionate amount of weight on standardized test scores for admissions, despite the fact that these scores do not precisely predict college completion. States can adopt policies that give more weight to GPA and other factors that don’t track with family income. States and universities can also follow the leadership of institutions like the University of Chicago, which dropped the SAT/ACT requirement last year.

The cost of college also prevents high-achieving low-income students from attending selective institutions. Rising tuition and fees combined with the shrinking power of the Pell Grant leave low-income families with estimated family contributions that outstrip their ability to pay. Thus, many of these eligible students attend nonselective colleges because that’s what they can afford.

States should provide financial aid to make it possible for more low-income students to attend selective colleges and universities. It should be part of our public policy to ensure that ability, and not family income, determines who gets access to our nation’s selective institutions.

2. Boost Those Bachelor’s Degrees

Low-income students understand the importance of a bachelor’s degree. They enroll in college at high rates, but too many fail to graduate. Sixty-seven percent of students in the bottom fifth in income enroll in college. The problem is that only 57 percent earn a credential within eight years.

Increasing the number of low-income students who receive bachelor’s degrees will, again, require making college more affordable. Many students who leave college before completing their bachelor’s degree need to work to make ends meet.

State, federal, and college financial aid policies need to change to extend aid beyond the cost of tuition and fees and include the cost of living, so that more low-income students can stay in school and graduate.

For students who are unable, for financial or other reasons, to begin college at a four-year school, it is also critical that we make it easier to transfer. While roughly 80 percent of community college students declare that they intend to transfer to a four-year school and earn a bachelor’s degree, only 14 percent transfer within six years.

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While it wouldn’t close the income gap, increasing the number of lower-income students who graduate with a bachelor’s degree would begin to narrow it. Bachelor’s degrees pay 84 percent more than a high school diploma.

3. Pick the Right Major

Finally, states need to establish policies to improve college advising to help low-income students select college majors that are associated with high-wage fields. Earnings vary dramatically by major.

The highest-paying bachelor’s degree major — petroleum engineering — starts with earnings of $120,000 at the median. That’s a whopping $91,000 more than the lowest-paying bachelor’s degree major — counseling psychology, with median earnings of $29,000.

Given the huge difference, students who want to make the most of their college experience need to make decisions informed by labor market information. But low-income students often enroll in college with little sense of what they want to study, let alone the earnings returns from different programs.

African American students, for example, are not represented in majors that pay high wages — STEM, health, and business disciplines. They are disproportionately represented in majors associated with lower wages, such as social work, human services, and public administration. To be sure, these are worthy professions, but people need to go into them with open eyes.

Advising students on choosing a degree path — and helping them understand the earnings implications of that path — is a central tenet of guided pathways, a major college reform effort. Expanding guided pathways with the support services necessary to help students select majors aligned with high-wage, high-demand jobs and careers can contribute to closing the wage gap.

Closing the income gap will require massive structural change in our society — but given today’s political climate, that isn’t going to happen anytime soon. But we don’t need to restructure society to make important progress. And we can make progress with policy changes that we can do now.

For more from JFF’s Michael Collins and strategies to address equity in education visit JFF.org.

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JFF (Jobs for the Future) is a national nonprofit that builds educational and economic opportunity for underserved populations in the United States.

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