Flagships Are Rolling Out New Need-Based Aid Programs for Low-Income Students. Why Now?

When the University of Arizona on Thursday announced a pledge to cover the full tuition costs for Pell Grant-eligible students next fall, it joined a wave of need-based-aid programs that are available at other public flagship universities.

Within the last few years, the Universities of Michigan at Ann Arbor, of Wisconsin at Madison, and of Texas at Austin have announced their own need-based-aid programs. College affordability and access have long been a concern of policy makers and education activists, and research shows that many flagships have priced out low-income students. In recent years, however, tackling those concerns has become a greater priority of high-profile politicians as well as a handful of the nation’s top public universities.

So why are flagships taking action now? Sarah Turner, an economist at the University of Virginia who studies education policy, said the institutions are adjusting some of the pricing policies they adopted in the wake of the Great Recession.

“That is a huge factor in terms of what is going on in regard to the pricing of tuition and financial aid at public universities,” Turner said. “Universities, and particularly the flagships, faced large cuts in appropriations during and after the recession … One of these responses that has been particularly marked at the flagships — the most selective institutions — is to increase the sticker price.”

In Arizona, for instance, the state’s universities raised tuition at a rate that was more than double the national average, according to a 2018 survey. Figures like those come at a time of heightened American anxiety about how to pay for college, and both help explain the mainstreaming of the once-fringe free-college proposal publicized by Sen. Bernie Sanders, the two-time presidential candidate.

But Turner said raising the sticker price increasingly shuts out low- and moderate-income students. “Many public flagships have shifted from across-the-board low-tuition strategies to relatively high-tuition, high-aid strategies, where these institutions are offering considerable need-based financial aid.”

That’s precisely what’s playing out at the University of Arizona, which just declared its intention to give aid equal to full tuition to all Pell Grant-eligible in-state freshmen attending the main campus, in Tucson, beginning in the fall of 2020.

Since 2008, at the onset of the recession, the University of Arizona’s Assurance Program has offered broader support to students whose families earn up to $42,400 per year, like money for housing and food. But it also has GPA requirements and reaches only about 300 of the 35,233 undergraduates enrolled, though officials say they’re working to expand the number of recipients.

“There’s still a large number of students who are not obtaining Arizona Assurance,” said Kasey Urquidez, vice president for enrollment management and dean of undergraduate admissions at the University of Arizona, where approximately one-third of students were Pell-eligible during the 2018-19 academic year.

Urquidez said university officials don’t want sticker shock scaring off otherwise-qualified students. “We wanted to have an official program that we can announce across the state that says, ‘If you’re a Pell-eligible student, we’re going to fill that gap and make sure you know tuition is covered.”

Turner cautions, however, that aid programs with specific income caps, like so many of the recently announced programs, can yield unintended consequences. “The intentions are good,” she said, but “you run the risk of putting students who are just slightly ineligible for the Pell Grant, or some other arbitrary income threshold, at a very large disadvantage.”

Those are the challenges of what Charles Clotfelter, a Duke University economics professor, has identified as the “third era” of aid at four-year colleges in the public sector. From the late 1950s until the early 1990s, “there was low tuition across the board,” said Clotfelter. But as he notes in his book Unequal Colleges in the Age of Disparity, state funding for higher education has been on the decline since the late 1980s. Those trends have weakened the social contract.

In the 1990s a handful of Southern states, eyeing lower taxes and higher retention of in-state middle-class students, created merit-based scholarships, such as Georgia’s HOPE scholarship and Florida’s Bright Futures. “What that meant for the University of Georgia at Athens, for instance, was an increase in caliber of students,” Clotfelter said. “Students who were once looking at going to Vanderbilt or the University of North Carolina at Chapel Hill are now going to Georgia for free. It’s had a perceptible effect on enrollment and average SAT scores.”

With that shift came a rise in middle- and higher-income students’ enrolling at the nation’s elite public universities. And the income of a student’s family correlates with academic preparation and academic qualifications, said Sandy Baum, a senior fellow for the Center on Education Data and Policy at the Urban Institute. “It’s so hard to get into the University of Virginia and the University of Michigan,” she said, “that mostly they ignored socioeconomic status.”

UVa has, though, tried to take aim at socioeconomic barriers. In 2004 it unveiled Access UVa, which extends grants to low-income students. Around the same time, the University of North Carolina at Chapel Hill started a similar program, the Carolina Covenant, tipping off the third wave of public higher-education funding trends: the need-based-aid scholarship.

Like a smattering of newer grants, both of those earlier programs followed a recession in the early 2000s. “It obviously didn’t catch on the same way then as it has now,” Baum said. “That certainly has to do with all these changes in the political environment.”

Kathryn Palmer is an editorial intern at The Chronicle. Follow her on Twitter @kathrynbpalmer, or email her at kathryn.palmer@chronicle.com.