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Q & A

Q & A

The following Q&A addresses questions Lumina Foundation recently received on its Unequal Opportunity research report. The Q&A has been divided into general questions and questions on research methodology. For general questions about Lumina Foundation, please visit the general Q&A section of this Web site.

  1. How can this research be used to improve access to higher education?
  2. What are the next steps to improving college success?
  3. How does your Unequal Opportunity report differ from previous studies on postsecondary accessibility?
  4. What does it mean when a college/university is categorized as unaffordable in your research report?
  5. How should students and parents view an institution that appears to be unaffordable?
  6. Many independent colleges and universities are classified as unaffordable. What role do independent colleges and universities play in higher education access?
  7. Why study only low- and median-income students?
  8. Why doesn't this report take into account retention and graduation rates for specific colleges and universities?
  9. Why does this report list most independent Historically Black Colleges and Universities as unaffordable or affordable with borrowing?
  10. How do you respond to private colleges that are classified as "unaffordable" in your report, yet have financial aid policies in place that meet all their admitted students' financial needs?
  11. Why should there be concern about affordability when enrollments are strong?
  12. Is college possible for most Americans?
  13. How did you calculate "affordable,""unaffordable with loans" and "unaffordable"?
  14. Is it true that this report uses averages of averages in calculating affordability, as some have stated?
  15. How do you define low- and median-income students?
  16. Why use average institutional aid awards when calculating affordability for all students?
  17. Why didn't you include a student contribution for dependent students?
  18. Why only use federal loans for freshmen?
  19. Why are campuses that are part of a university system that charges the same tuition at all of its locations evaluated differently in the study?

General Questions
Q1: How can this research be used to improve access to higher education?
We believe that facts are friendly. The higher education community can use the facts presented in this study for the benefit of their students. For example, the higher education community has requested additional federal and state grant aid for needy undergraduates, and it has made some headway in recent years at the federal level and in some states. This report provides new information on a state-by-state basis to all interested stakeholders.

Q2: What are the next steps to improving college access?
Even with continued improvements in financial aid and increased cost-containment focus by colleges, needy students still struggle to afford a postsecondary education. The current recession and looming budget deficits in 36 states add urgency to this problem. All interested stakeholders need to do more to provide equal access to all students. Federal and state policy-makers, as well as philantropists and businesses, must continue to focus on this important issue and work with higher education institutions to close the funding gap, particularly for our country's neediest students.

Q3: How does your Unequal Opportunity report differ from previous studies on postsecondary accessibility?
Unequal Opportunity analyzes data at the institutional level instead of aggregating it for groups of colleges. We examined "unmet need" by income levels and dependency statuses as other studies have, but whe calculating financial need, available aid and "unmet need," we used insitutional data. No one has done this before. Unequal Opportunity also differs from other studies in that, instead of writing about the amounts of "unmet need" that must be covered to make different types of colleges "affordable," we report that individual colleges are "unaffordable" to certain groups — when their "unmet need" exceeds $3,125 for dependent and $5,500 for nontraditional students. (These figures equal the appropriate loan limits for dependent freshmen and independent students, plus $500.) In short, the report offers an institutional-based definition of affordability for each of four student groups.

Q4: What does it mean when a college/university is categorized as unaffordable in your research report?
When the report classifies a college as "unaffordable" for a particular group of students, it does not mean that no such students can attend that institution. Nor does classifying a college as "affordable with borrowing" mean that all students in a particular group must borrow to attend. We recogize that students are enrolled at institutions classified as "unaffordable" to them. Some students do receive exceptional aid. However, it is likely that many students attend at serious financial inconvenience — if not extraordinary financial sacrifice. Even though some students are willing and able to make such sacrifices to attend a college, it does not mean that the college is "affordable." When a college is classified as unaffordable for a group, it means that, on average, students in that group may experience serious financial barriers to accessibility and if they are able to enroll may find it difficult to remain enrolled and graduate.

Q5: How should students and parents view an institution that appears to be unaffordable?
Financial aid packaging at individual institutions varies. If students are considering applying to a particular institution, they should not conclude that it will be unaffordable until taking into account the actual individual financial aid package of grants, loans and work aid the institution offers them. They should not assume that their families' financial characteristics match those used in this study or that they cannot get enough aid to make attendence possible.

Q6: Many independent colleges and universities are classified as unaffordable. What role do independent colleges and universities play in higher education access?
Lumina Foundation recognizes that independent colleges play a significant role in the higher education system. They have comparatively strong graduation and retention rates, and they prepare many students for graduate and professional schools. Without these institutions the nation could not meet its increasing enrollment demands. We also recognize that independent institutions have made great strides in providing institutional aid and focusing on the special needs if low-income students. Tuition increases at independent colleges have been lower in recent years than in the early 1990s. However, on a national basis, there is still room for improvement, if equal opportunity is to be extended to students at all income levels. Increases in federal, state and institutional grants have not kept pace with annual growth in college prices. Annual tuition increases at many independent institutions still exceed the general rate of inflation by two or three percentage points.

Q7: Why study only low- and median-income students?
Low- and median-income students represent the vast majority of students for whom college expenses are likely to present barriers to accessibility.

Q8: Why doesn't this report take into account retention and graduation rates for specific colleges and universities?
We agree that many colleges and universities are doing a good job of graduating the students they admit. As part of our core mission, Lumina Foundation supports research and programs to enhance retention and graduation rates. However, students must be able to matriculate before they can graduate. This particular study focuses on the critical first steps to a successful higher education experience — admissibility and affordability.

Q9: Why does this report list most independent Historically Black Colleges and Universities as unaffordable or affordable with borrowing?
We recognize that Historically Black Colleges and Universities (HBCUs) have a proud record of serving students from low-income families. However, the data indicate that average Pell Grants to HBCU students and their colleges' available institutional aid are often insufficient to fill the gap between the average cost of attendance and expected family contributions. Therefore, we believe that many students who attend HBCUs do so at significant financial sacrifice.

Q10: How do you respond to private colleges that are classified as "unaffordable" in your report, yet have financial aid policies in place that meet all their admitted students' financial needs?
A college's claim that it meets full need does not necessarily make it affordable. Colleges can adjust their need analyses to demand higher Expected Family Contributions (EFC) from parents and students than are expected through the federal methodology. Using the higher EFCs would cut estimated financial need and make need easier to meet. But that doesn't necessarily make the college affordable. Also, colleges meet need with work-study and with supplemental loans, but doing so doesn't make them more affordable. Given these considerations, it was imperative to stay with the same "rules" for all colleges.

Q11: Why should there be concern about affordablility when enrollments are strong?
Census projections of future college students indicate that an increasing proportion of students will come from low-income backgrounds. We believe that all stakeholders must work toward solutions now that will expand access for all families, especially those least able to afford college.

Q12: Is college possible for most Americans?
Attending college is possible for nearly everyone who is admissible, and it is worth the effort and sacrifices needed to enroll and complete a degree. The larger question that higher education stakeholders must continue to debate is how much should low- and median-income students sacrifice to achieve the important goal of a college education.

 

Questions on Research Methodology
While reasonable people can disagree on specific points of methodology, the underlying issue of college affordability remains an important problem that all stakeholders in higher education need to solve together. We must continue to work on better ways to gauge affordability so we can help improve access to low-income families.

Q13: How did you calculate "affordable," "unaffordable with loans" and "unaffordable"?
In assessing affordability, the study focuses not only on specific college expenses (as reported by the colleges to The College Board and the Department of Higher Education) and family resources (using individually calculated low- and median-income ranges based on U.S. Census data for each state to calculate Expected Family Contributions for each group in each state), but also on the extent to which federal, state and institutional aid helps meet financial need for specific types of students.

In our study, affordability indicates that the difference between the Expected Family Contribution and the price of postsecondary education — after federal, state and institutional financial aid is considered — does not exceed $500. In contrast, "unaffordable" means that remaining or unmet need exceeds $3,125 for dependent students and $5,500 for independent students. The amount of unmet need varies among the 50 states and for each of the four student groups. Lumina Foundation's mission is to improve access to postsecondary education. This study was intended to document for higher education leaders, public and private colleges, and state and federal policy-makers that college affordability remains an issue for many students, and we need to consider how we can improve affordability together.

Q14: Is it true that this report uses averages of averages in calculating affordability, as some have stated?
No. State specific and institution-specific information was used to create an institution's affordability rating (as outlined in Q13). Affordability for each college or university was calculated using data colleges and universities report to The College Board and the U.S. Department of Education. Incomes were created using Census data for each state. Averaging averages is not an appropriate research methodology and was not used by this research team.

Q15: How do you define low- and median-income students?
Census data were used to determine the average incomes of families within the first quartile of family income distributions and the median level of family income (i.e., the midpoint) for each of the 50 states and the District of Columbia. Only those families with dependents and with household heads old enough to have children of college age were included in calculating low- and median-incomes for dependent students. For older, adult students, their own household incomes were used.

Q16: Why use average institutional aid awards when calculating affordability for all students?
Some colleges have said that their low-income students receive well-above average financial aid awards and that aid makes their institutions affordable. We believe this to be true in some cases. However, the data provided by colleges and universities to The College Board and the U.S. Department of Education indicate that institutional aid awards at the vast majority of independent colleges would have to be more than double and, in many cases, triple the average award to make the schools affordable to low-income students. Given the trends in packaging of institutional aid and budget belt-tightening pressures, it is very unlikely that many colleges make such high awards to their low-income students.

Several colleges have provided us with examples of individual student aid packages to argue that our analysis underestimates the extent to which low-income students receive institutional aid. We agree that individual student data provides the most accurate picture of financial aid packaging at specific institutions. Unfortunately, there is not a national database that provides individual data on the more than 7 million full-time undergraduate students enrolled in higher education. Because our study was about college access at institutions for each of four student groups in the 50 states, we used the best information available from the College Board and the U.S. Department of Education to measure average institutional aid for all students at each of the colleges in our study. An additional goal of Lumina Foundation is to explore the possibility of a nationally integrated student record database that would allow for the individual-level analysis advocated by many colleges and universities in reaction to our study.

Q17: Why didn't you include a student contribution for dependent students?
We did not have any reliable data that could be applied on a state-by-state basis to give us estimates of an "average" student contribution. We know that student earnings vary by state and by students' family incomes, but we did not have reliable information to apply to each state and income group. Furthermore, we assumed that students in the bottom quartile of family income cannot be realistically expected to save their earnings for college; they need those earnings for basic survival expenses.

Q18: Why only use federal loan limits for freshmen?
Students must be able to afford and complete the first year of college. Therefore, the freshman loan limit of $2,625 was the most conservative and appropriate figure to use for this study.

Q19: Why are campuses that are part of a university system that charges the same tuition at all of its locations evaluated differently in the study?
In many cases, the differences are generally explained by the differences in cost for a residential versus commuter campus. Another possible explanation for different classifications is that the amount of institutional financial aid available varies considerably from one campus to another.

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