DEFINING COLLEGE AFFORDABILITY FOR LOW-INCOME ADULTS

Improving returns on investment for families and society

Barbara Gault Vice President and Executive Director Institute for Women’s Policy Research

Lumina Foundation Author’s Conference November 6, 2013

Defining Affordability

Defining Affordability from a Student’s Perspective

From a student’s perspective, college is affordable when…

It allows individuals and families to maintain: A reasonable economic standard of living, or “self-

sufficiency.” Social & physical health & well-being (both during &

after school enrollment).

College results in a positive ROI for the student & their family over their lifetime.

Defining a Reasonable Economic Standard of Living

Economic self-sufficiency measures account for a full complement of expenditures by

family size and type.

According to WOW, a single parent family with

two young children requires $61,044 to make ends meet.

Defining Standards of Physical Health & Well-being

College is affordable when after work, class, & study demands, students have

time & resources to care for their own & their families’ physical & social health needs to include:

Sleep Quality time for children Preventative health activities Social support

Defining Affordability from Society’s Perspective

The benefits to society outweigh costs such that public investments pay off in the long term, because Economic & social gains from successful graduates (including economic effects of inequality reductions).

Children are better off & more likely to attend college.

Institutions provide good value &efficiency.

Investing in postsecondary education is

affordable if:

Why a Race/Gender Analysis Matters

Examining affordability concerns by gender, race, & ethnicity is key to improving ROI to education & social equity.

Career segregation persists and can be disrupted by systems of higher education.

Better attending to the financial & social needs of families enhances multigenerational gains that higher education brings to society.

Racial/Ethnic Disparities in Earnings

$0

$20,000

$40,000

$60,000

$80,000

White Black Asian & Pacific Islander

Hispanic

Men

Women

Source: IWPR analysis of data from Decennial Censuses (1980, 1990, and 2000) and American Community Surveys (2009-2011) from Ruggles, et al. (2010) Integrated Public Use Microdata Series (IPUMS, version 5.0).

Median earnings for FT, FY workers age 25+ with a Bachelor’s degree by gender, race, & ethnicity

Workers of Color & Women Face Lower Earnings

Black & Hispanic Workers Need More Education to Earn as Much as Whites & Asians

$0

$20,000

$40,000

$60,000

$80,000

White Asian Black Hispanic

High School/GED

Associates

Bachelors

Masters/Prof/PhD

Source: IWPR analysis of data from Decennial Censuses (1980, 1990, and 2000) and American Community Surveys (2009-2011) from Ruggles, et al. (2010) Integrated Public Use Microdata Series (IPUMS, version 5.0).

Median earnings by degree & race/ethnicity, 2009-2011

Race/Ethnicity Associated with Women’s Earnings at All Education Levels

$0

$20,000

$40,000

$60,000

$80,000

Asian women White women

Black women Hispanic women

High School/GED

Associates

Bachelors

Masters/Prof/PhD

Median earnings for women by degree, race, and ethnicity, 2009-2011

Source: IWPR analysis of data from Decennial Censuses (1980, 1990, and 2000) and American Community Surveys (2009-2011) from Ruggles, et al. (2010) Integrated Public Use Microdata Series (IPUMS, version 5.0).

80%

97%

80%

50%

60%

70%

80%

90%

100%

1980 1990 2000 2009-2011

Ratio of Black to White earnings

Ratio of Asian to White earnings

Ratio of Hispanic to White earnings

Source: IWPR analysis of data from Decennial Censuses (1980, 1990, and 2000) and American Community Surveys (2009-2011) from Ruggles, et al. (2010) Integrated Public Use Microdata Series (IPUMS, version 5.0).

Median earnings of Bachelor’s degree holders as proportion of comparable white workers’ earnings

Racial/Ethnic Wage Gap is Growing for African Americans & Hispanics

12% 1% 1%

2% 3%

4% 4% 4%

5% 5%

6% 7% 7% 7% 8% 8% 8% 8%

9% 9%

10% 11% 11% 11% 11%

11% 12% 12% 12% 12%

14% 14% 14% 15% 15%

16% 20%

23% 27%

Total (n=787,466) Natural resources and conservation (n=1,199)

Agriculture, agriculture operations, and related sciences (n=4,525) History (n=485)

Library science (n=116) Architecture and related services (n=596)

Mathematics and statistics (n=930) Precision production (n=2,126)

Physical sciences (n=2,190) Foreign languages, literatures, and linguistics (n=1,627)

English language and literature/letters (n=1,525) Transportation and materials moving (n=1,430)

Biological and biomedical sciences (n=2,364) Multi/interdisciplinary studies (n=15,459)

Engineering (n=2,181) Visual and performing arts (n=18,629)

Construction trades (n=4,252) Mechanic and repair technologies/ technicians (n=16,176)

Communication, journalism, and related programs (n=2,722) Psychology (n=3,949)

Communications technologies/ technicians and support services (n=4,803) Engineering technologies/technicians (n=30,437)

Military technologies (n=721) Social sciences (n=8,657)

Liberal arts and sciences, general studies, and humanities (n=263,853) Parks, recreation, leisure and fitness studies (n=1,587)

Philosophy and religious studies (n=191) Science technologies/technicians (n=1,427) Personal and culinary services (n=16,327)

Health professions and related clinical sciences (n=165,185) Education (n=14,123)

Area, ethnic, cultural, and gender studies (n=173) Computer and information sciences and support services (n=30,007)

Security and protective services (n=33,038) Business, management, marketing, and related support services (n=111,521)

Legal professions and studies (n=9,062) Family and consumer sciences/human sciences (n=9,020)

Theology and religious vocations (n=675) Public administration and social service professions (n=4,178)

Proportion of African Americans by Community College Major

Source: U.S. Department of Education, National Center for Education Statistics, Integrated Postsecondary Education Data System (IPEDS), Fall 2009, Completions component.

Few African American students major in STEM.

5% 1% 1%

2% 2% 2% 2% 2% 2% 2% 2% 3% 3%

3% 3% 3%

4% 4% 4% 4%

4% 5% 5% 5% 5% 5% 5% 5% 5% 5%

6% 6%

8% 8%

10% 11%

13% 14% 14%

Total (n=787,466) Natural resources and conservation (n=1,199)

Agriculture, agriculture operations, and related sciences (n=4,525) Theology and religious vocations (n=675)

Education (n=14,123) Public administration and social service professions (n=4,178)

Legal professions and studies (n=9,062) Security and protective services (n=33,038)

Construction trades (n=4,252) History (n=485)

Foreign languages, literatures, and linguistics (n=1,627) Precision production (n=2,126)

Communication, journalism, and related programs (n=2,722) Parks, recreation, leisure and fitness studies (n=1,587)

Communications technologies/ technicians and support services (n=4,803) Family and consumer sciences/human sciences (n=9,020)

Mechanic and repair technologies/ technicians (n=16,176) Engineering technologies/technicians (n=30,437) Transportation and materials moving (n=1,430)

Psychology (n=3,949) Personal and culinary services (n=16,327)

Computer and information sciences and support services (n=30,007) Military technologies (n=721)

Health professions and related clinical sciences (n=165,185) Liberal arts and sciences, general studies, and humanities (n=263,853)

Library science (n=116) Philosophy and religious studies (n=191)

Business, management, marketing, and related support services (n=111,521) Science technologies/technicians (1,427) Visual and performing arts (n=18,629)

Area, ethnic, cultural, and gender studies (n=173) Architecture and related services (n=596)

Engineering (n=2,181) Social sciences (n=8,657)

English language and literature/letters (n=1,525) Multi/interdisciplinary studies (n=15,459)

Physical sciences (n=2,190) Mathematics and statistics (n=930)

Biological and biomedical sciences (n=2,364)

Proportion of Asian Americans by Community College Major

Source: U.S. Department of Education, National Center for Education Statistics, Integrated Postsecondary Education Data System (IPEDS), Fall 2009, Completions component.

Asian students are much

more likely to major in STEM.

$90,000

$65,000 $68,000

$55,000 $60,000 $59,000

$0

$20,000

$40,000

$60,000

$80,000

$100,000

Electrical Engineering Architecture

Median Earnings by Race for FT, FY workers with a Bachelor’s degree

Whites Blacks Hispanics

Workers of Color Make Less than Whites with the Same Major

Source: Carnevale, Strohl and Melton. 2011. What’s It Worth? The Economic Value of College Majors. Georgetown University Center on Education and the Workforce.

$0

$10,000

$20,000

$30,000

$40,000

Total White Black Hispanic Asian Two or more races

Men

Women

Students of Color Graduate with More College Debt

Average undergraduate debt of Bachelor’s degree holders one year after graduation, by race, ethnicity, &

gender

Source: IWPR calculations, 2008 Baccalaureate and Beyond Survey data. National Center of Education Statistics.

80.4% 73.3%

103.4%

83.6% 95.5%

104.8%

80.9%

0%

20%

40%

60%

80%

100%

120%

White Asian Black Hispanic American Indian or Alaska Native

Native Hawaiian or other Pacific

Islander

Two or more races

Student Loan Debt as a Percent of Annual Earned Income*, One Year after Graduation 2009

Source: U.S. Department of Education, National Center for Education Statistics, B&B: 09 Baccalaureate and Beyond Longitudinal Study.

*Earnings from work.

Students of Color Have Higher Debt to Earnings Ratios

The Gender Wage Gap

Source: IWPR analysis of data from U.S. Census Bureau, Current Population Reports, P60-245, Income, Poverty, and Health Insurance Coverage in the United States: 2012.

Women Today Will Not See Equal Pay in Their Working Lives

Gender Wage Gap Stagnant for BA Holders

59%

68% 73% 73%

20%

30%

40%

50%

60%

70%

80%

90%

100%

1979 1989 1999 2009-2011

Source: IWPR analysis of data from Decennial Censuses (1980, 1990, and 2000) and American Community Surveys (2009-2011) from Ruggles, et al. (2010) Integrated Public Use Microdata Series (IPUMS, version 5.0).

Women’s earnings as a percentage of men’s for all full-time, full-year BA holders

Gender Wage Gap Diminishes Ability to Repay Loans

Women only earn 77 percent for each dollar earned annually by men,

only 82 percent of each dollar earned weekly, and

women with Bachelor degrees earn about

$11,334 per year less than comparable full-time, full-year men.

Proportion of Females in Community College Majors

62% 96%

90% 87%

86% 86% 85%

84% 81%

71% 68%

66% 65% 64% 64%

61% 61%

54% 54%

52% 50%

48% 41%

40% 34%

32% 30%

29% 25%

22% 14% 14%

13% 6.5%

5.5% 5.1%

All Associates Degrees (N=787,325) Family and Consumer Sciences (N=9,020) Legal Professions and Studies (N=9,062)

Library Science (N=116) Public Administration and Social Services (N=4,178)

Education (N=14,123) Health Professions and Related Sciences, Total (N=165,163)

Foreign Languages, Literatures, and Linguistics (N=1,627) Psychology (N=3,949)

Area, Ethnic, Cultural, and Gender Studies (N=173) Biological and Biomedical Sciences (N=2,364)

Business, Management, and Marketing, Total (N=111,521) English Language and Literature/Letters (N=1,525)

Social Sciences and History, Total (N=9,142) Visual and Performing Arts, Total (N=18,629)

Multi/Interdisciplinary Studies (N=15,459) Liberal Arts, General Studies, and Humanities (N=263,853)

Architecture and Related Services (N=596) Communications (N=2,722)

Personal and Culinary Services (N=16,327) Theology and Religious Vocations (N=675)

Security and Protective Services, Total (N=33,033) Physical Sciences and Science Technologies, Total (N=3,617)

Parks, Recreation, Leisure, and Fitness Studies (N=1,587) Agriculture and Natural Resources, Total (N=5,724)

Mathematics (N=930) Communications Technologies (N=4,803)

Philosophy and Religion (N=191) Computer and Information Sciences (N=30,006)

Military Technologies (N=721) Engineering (N=2,181)

Engineering-Related Technologies (N=30,434) Transportation and Material Moving Workers (N=1,430)

Precision Production Trades (N=2,126) Mechanics and Repairers (N=16,066)

Construction Trades (N=4,252)

Few female students major in STEM.

Women are less likely to major in STEM

Top Five Majors For Associate Degrees, 2008-09

White Men

Asian Men

Black Men

Latino Men

Asian Women

White Women

Black Women

Latina Women

Liberal arts & sciences, general studies, humanities • • • • • • • • Business, mgmt, marketing, related support services • • • • • • • •

Engineering technologies/technicians • • • •

Health professions & related clinical sciences • • • • • • • •

Computer & information sciences and support services • • • • Security & protective services • • •

Education • • Multi/interdisciplinary studies • •

Visual & performing arts • Source: U.S. Department of Education, National Center for Education Statistics, Integrated Postsecondary Education Data System (IPEDS), Fall 2009, Completions component.

$92,000

$40,000

$35,000

$72,000

Women Make Less than Men with the Same Major

78% Women

22% Men

23% Women

77% Men

Human Services & Community Organization

Chemical Engineering

Source: Carnevale, Strohl and Melton. 2011. What’s It Worth? The Economic Value of College Majors. Georgetown University Center on Education and the Workforce.

Women have higher debt after graduation

0.8% 0.7%

1.1% 1.3% 1.2%

1.5% 1.3%

1.6%

0.0% 0.2% 0.4% 0.6% 0.8% 1.0% 1.2% 1.4% 1.6% 1.8%

White Asian Hispanic Black

Men

Women

Source: Julian and Kominski. 2011. Education and Synthetic Work-Life Earnings Estimates. American Community Survey Reports.

Average debt one year after graduation as a percent of lifetime income, by gender and race/ethnicity

Parenthood Affects College Affordability

More than a Quarter of College Students Have Dependent Children

10

15

20

25

30

35

40

45

50

55

2004 2008 2012

Perc

enta

ge

Total

Public 4-year

Private not-for-profit 4-year

Public 2-year

Private for-profit

Proportion of College Students with Dependent Children by Institution Type, 2004-2012

Source: IWPR analysis of U.S. Department of Education, National Center for Education Statistics, 2003-04, 2007-08, 2011-12 National Postsecondary Student Aid Study.

32.2% 29.1%

47.0%

31.6%

18.2%

41.4% 39.4%

28.0%

0.0%

10.0%

20.0%

30.0%

40.0%

50.0%

Total White Black Hispanic or Latino

Asian American Indian or Alaska Native

Native Hawaiian

or Pacific

Islander

More than one

race Women Men

Proportion of College Students with Children by Race & Gender

Women of Color in College Are Very Likely to Have Dependent Children

Source: IWPR calculations, 2012 National Postsecondary Student Aid Survey data. National Center of Education Statistics.

The Student Parent Population: Female, Single & Low Income

32%

18%

39%

11%

Income Levels

Married, Higher Income

Married, Low Income

Single, Low Income

Single, Higher Income

Sources: Number of student parents from IWPR analysis of the 2011-2012 National Postsecondary Student Aid Survey. Gender and income breakdowns from IWPR analysis of 2008 NPSAS.

29%

71%

Gender Makeup

Men

Women

There are 4.8 million student parents.

Source: Data on school attendance patterns and work hours derived from IWPR analysis of National Postsecondary Student Aid Survey, 2008 undergraduate cohort. Data on time spent caring for dependents was calculated by IWPR from the 2008 Community College Survey of Student Engagement.

Full Time Activities (30 hours or more per week) of Single Parents Attending Community College

Time Demands on Student Parents

For-profit Colleges Target Student Parents

In 2012, 50% of students at for-profit colleges were parents compared to 30% of students at 2 year colleges.

For-profit colleges are the least likely to have child care available.

$28,350

$25,135

$27,805

$26,903

$21,000

$22,000

$23,000

$24,000

$25,000

$26,000

$27,000

$28,000

$29,000

All Students Men Women Independent Students

Students without Children

Students with Children

Women & Student Parents Graduate with More College Debt

Source: IWPR calculations, 2008 Baccalaureate and Beyond Survey data. National Center of Education Statistics.

Average Undergraduate Debt One Year after Graduation by Gender & Parent Status

$0

$1,000

$2,000

$3,000

$4,000

$5,000

$6,000

All Students Men Women Independent Students

Students without Children

Students with Children

Unmet Financial Need is Greater for Student Parents

Source: IWPR calculations, 2008 National Postsecondary Student Aid Survey data. National Center of Education Statistics.

*Unmet need is equal to the student budget (tuition and non-tuition academic expenses) minus the EFC and all aid. All aid includes need-based and non-need based financial aid at the federal, state and institutional level and private grants but not private loans.

Unmet Need* for College Students by Parent Status

Campus Child Care Serves <5% of Need

1,124,000

54,400

Total number of campus child care slots needed by student parents

Number of slots currently available

Source: IWPR calculations utilizing data from the National Postsecondary Student Aid Survey, Department of Education enrollment figures, IWPR NCCCC Member Survey, and the 2010 Current Population Survey.

Campus Child Care Declining

Source: IWPR calculations, Integrated Postsecondary Education Data System. Wright and Gault. 2013. Improving Outcomes for Marginalized Girls in the Secondary Education and Workforce Development Systems.

2002 2003 2004 2005 2006 2007 2008 2009 2010 2011 Community Colleges 52.8% 53.2% 53.6% 52.9% 52.0% 51.7% 50.1% 49.0% 48.2% 47.4% Public 4-Year Institutions 58.9% 59.1% 58.4% 58.2% 57.6% 57.8% 57.6% 57.2% 55.7% 55.1%

45.0%

50.0%

55.0%

60.0%

65.0%

Proportion of Public Postsecondary Institutions with On-Campus Child Care

Full-time child care costs range from $3,900 to $15,000 a year depending on location, quality, and child’s age.

Child Care is Expensive

Sources: National Women’s Law Center 2013. Pivot point: State Child Care Assistance Policies 2013; Wider Opportunities for Women 2013. Basic Economic Security Tables (BEST) Index.

These costs make up

approximately 25% of expenditures for a family of three.

Income protection allowance in FAFSA doesn’t fully cover the cost of child care.

In 2013, 19 states had wait lists for child care, with wait

times ranging from 90 days to 3 years.

Help paying for child care

can be tough to find

Sources: National Women’s Law Center 2013. Pivot point: State Child Care Assistance Policies 2013; Information for Federal Student Aid Professionals. 2013. The EFC Formula, 2014-2015.

Implications and Recommendations

Tools to Improve Equity in Career Choices

Create a Return on Investment to College Calculator.

To “suggest” higher paying careers within the participants’ skill parameters.

Would combine tools that already exist or are in development.

Outputs would include monthly/annual income before/after estimated debt payments.

Calculations could include access to child care assistance as a factor in expenditure calculation.

Include access to in-person career counseling supports.

Include profiles of demographically comparable workers in careers.

Include an option for “consciousness raising” on segregation?

Characteristics of a Return on Investment Calculator

Integrate efforts to increase diversity in STEM with national postsecondary success initiatives.

Potential Partners: National Science Foundation Human Resource

Development Program STEM diversity professional associations

Take STEM diversity program models to scale

Ensure major STEM outreach efforts take advantage of evidence-based practices to increase diversity.

Interventions for Improving ROI

Improve student access to & awareness of public benefits.

Expand access to child care supports, e.g. through expansions to CCAMPIS program & integration with state & community early care & education systems.

Develop targeted grants for those with greatest combined dependent care time & affordability challenges.

Promote family-related supports and family friendly colleges & universities, in part to reduce alienation, stress, & time demands.

Build an Array of Supports for Student Parents

Source: Shumacher, Rachel. 2013. Prepping Colleges for Parents: Strategies for Supporting Student Parent Success in Postsecondary Education. IWPR Working Paper.

Institutional rankings & outcomes tracking must report earnings disaggregated by race and gender

To ensure institutions are not unintentionally penalized for diverse or highly female student population (e.g. women’s colleges).

Institutional incentive systems can reward progress toward equity in distribution of graduates across majors.

Institutional Accountability in Improving Students’ ROI

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