Writing in National Affairs, Judah Bellin of the Manhattan Institute acknowledges the importance of considering how the working class and the poor are impacted by higher-education policies:
“In their efforts to help the middle class, policymakers seem to have forgotten that the poorest students are the ones most desperately in need of college degrees and the ones least able to afford them. Research consistently shows that obtaining a college degree is a wise investment for almost anyone, but this is particularly true for poor students, who are much more likely to move up the socioeconomic ladder if they finish college.”
In particular, Bellin identifies the Perkins Loan program and the Federal Supplemental Education Opportunity Grants (FSEOG) as programs targeted for lower-income groups that have been squeezed to the margins of the budget by programs less targeted at the poor. At the same time, the share of young adults completing college from the bottom-quintile income group has barely increased over the past few decades, falling far behind large gains seen in higher-income groups.
On the other hand, unlimited and universal loan programs and expanded tax credits and deductions for higher education often end up both benefitting the wealthy and pushing up the total cost of tuition, producing a vicious cycle of further crowding out potential lower-income students and creating a need for more federal subsidies for college students and their families.
The solutions, writes Bellin, are within reach, but would require a U-turn from current federal policy:
“When it comes to college, low-income students already have the cards stacked against them. Instead of making it even harder for them, policymakers should address the particular problems that poor students face in higher education, namely financing their education and finding post-secondary programs that offer flexible schedules and technical training. Specifically, policymakers should reconsider their cuts to the relatively cheap means-tested student-aid programs, which would allow more students to finish their degrees, and they should think creatively about reforming, rather than wrecking, the burgeoning for-profit higher-ed sector.”
You can read Judah Bellin’s full piece in National Affairs here.