A college education is increasingly the only path to middle-class earnings. In 1970, 74 percent of workers with a high-school education or less were part of the middle class—earning between $30,000 and $85,000 in current dollars. By 2007 that number had dwindled to 39 percent. Over the same period, people with college degrees either stayed in the middle class or moved into the upper class.
Students and parents recognize that postsecondary education has become the arbiter of economic opportunity, and as a result, enrollments have surged—including enrollment by low-income and minority students. But our progress on access has been bittersweet. Significant growth in college enrollments has been heavily related to lower-income students’ swelling the numbers at the least-selective four-year colleges and community colleges, while growth at the more selective four-year institutions has been confined mostly to affluent white students. As a result, America’s college system has become more economically polarized.
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That polarization has created a postsecondary system that is both separate and unequal. Half of annual college enrollments are concentrated in what the Barron’s rankings call “competitive” four-year colleges, while the other half are concentrated in community colleges and other sub-baccalaureate institutions at the bottom of the selectivity scale.
The top half of postsecondary institutions are not just brand-name colleges like Harvard and Princeton. In fact, there are 1,044 “competitive” four-year colleges. At the top of the pyramid, there are the 193 colleges in Barron’s “most” and “highly” competitive tiers, 279 in the “very” competitive tier, and 572 in the “competitive” tier. Seventy-six percent of freshman enrollments in those colleges are by students from families in the upper half of the income distribution.
The bottom half of the bifurcated college system includes more than 1,000 community colleges, along with 299 less-prestigious four-year colleges. This bottom half is where the lowest-income students are. Nearly 80 percent of the lowest-income students go to colleges in the bottom half of the postsecondary system.
Polarization of the postsecondary system matters because it exacerbates the educational and resource gaps among students from different socioeconomic backgrounds. Stratification of the postsecondary system is paralleled by stratification in institutional spending on students. Students in selective colleges get more for less. Expenditures per student at both public and private institutions increase with institutional selectivity and students’ test scores—and the relative cost to affluent students actually goes down. Students in the wealthiest 10 percent of institutions pay 20 cents in tuition and fees for each dollar spent on them, while students in the poorest 10 percent of colleges pay 78 cents for each dollar spent on them. And the gap is growing. Annual spending per student has declined at two-year public colleges, remained flat at four-year public colleges, and increased by 11 percent at private research universities.
The growing stratification in per-student spending is not just about money; it is also about what money buys. Our own research shows that higher spending among the selective four-year colleges delivers higher degree-completion rates and better jobs. Almost 90 percent of students in the most competitive tier graduate. Compare that with 75 percent of students in the highly competitive tier, 62 percent in the very competitive tier, 49 percent in the competitive tier, 40 percent in the less competitive tier, and 35 percent in the noncompetitive tier. Clearly, resources matter when it comes to a college’s ability to make sure its students graduate.
This growing stratification is about what happens not only while students are in college, but also after. Those at the top of the postsecondary system, in more-selective four-year institutions, are tracked into professional and managerial careers that bring high earnings, as well as greater autonomy on the job and in society as a whole. Those in less-selective four-year colleges are tracked into good mid-level occupations, such as K-12 teaching, health care, and state and local public administration. Students tracked into the two-year-college system become more narrowly skilled workers, often in technical roles. They make decent pay but with less security, and they fall in the middle range of both earnings and autonomy on the job.
It is tempting to believe that completion rates are lower in the bottom tiers of four-year institutions and community colleges because the students aren’t prepared. But it is more complicated than that. The symmetry between preparation and completion is not nearly as strong as most people suppose. Almost 600,000 students who start out every year with test scores in the top half of their high-school graduating classes do not end up with two-year or four-year degrees within eight years of high-school graduation. Moreover, equally qualified students, as measured by SAT scores, have substantially higher graduation rates at more selective colleges. Research shows that the crowding of students into community colleges and different levels of resources are the major reasons that completion rates have declined.
Unfortunately, we’ve been here before. Today’s higher-education model mimics the pattern that occurred in the 20th century with the transition to a mass high-school system. The “comprehensive high school” created a college track, a vocational track, and a watered-down general track, conforming closely to hierarchies built along lines of race, class, and gender. But even as we have worked to undo the damage caused by such high-school tracking practices—unmasked by the report “A Nation at Risk,” released in 1983—we have gone right ahead and built a similar tracking system for our postsecondary institutions.
The economic stratification in our postsecondary system threatens the grand bargain implicit in the American social contract. Our system of democratic capitalism is based on the shotgun marriage of two contradictory ideas: democratic government and a capitalist market economy. Democratic government presumes equality among its citizens, but market economies guarantee and thrive on inequality.
Publicly supported education and the expansion of other government services, along with government regulation, became the key elements in reconciling those inherent conflicts, starting in the 19th century. In many countries, the welfare state has played a much more significant role in that process. Europeans in particular have relied much more than the United States on the direct redistributive and regulatory role of the welfare state to reconcile citizenship and markets.
Unlike the Europeans, we in the United States prefer to rely on education rather than a redistributive welfare state to smooth the contradictions between democratic equality and market-driven inequality. Our growing reliance on education as the arbiter of economic opportunity complements our preferences for a relatively open economy and limited government. Our reliance on education as the meritocratic alternative to a welfare state also allows us to expand opportunity without surrendering individual responsibility. After all, we each have to do our own homework to make the grades and ace the tests.
Fair enough, right? Not really. In a society where people start out in unequal circumstances, educational attainment measured by test scores and grades can partly be the outcome of being born into a family with the right bank account or of the right race.
So what can be done to better serve the goals of both merit-based educational opportunity and upward economic mobility? While perfect equity in access to the top half of the selectivity distribution is not practical, much more can be done to balance merit with upward mobility.
First, we need to be sure that the most selective colleges don’t reduce their current commitment to students from lower-income families. Financial pressures to abandon lower-income applicants will only grow as budgets tighten, thereby making more-affluent students more attractive.
Institutions should be encouraged with financial support based on their performance, determined according to their ability to maintain or even increase enrollment and completion rates for students eligible for Pell Grants. Moreover, the length of time required for students to graduate needs to be adjusted for student characteristics, so that colleges that serve less-advantaged students are not measured against those with more-advantaged students.
Second, selective colleges can do more for lower-income students without violating their own standards. Our own research and that of many others have shown that a substantial share of lower-income youths are either not going to college or are going to colleges that are not in line with their abilities. These “undermatched” students should be a prime target for college recruiters.
Third, our focus on access for low-income and minority students should be accompanied by a focus on upward economic mobility that comes from gainful employment. Postsecondary education should focus on students’ employability. Labor markets have always been more democratic than selective college admissions. In other words, students do not necessarily need to go to the best colleges to become employable, and we should not lose sight of that fact. Economic mobility has become more dependent on postsecondary completion since the 1980s, but the relationship is not only about where a student goes to college or the level of his or her degree.
On average, selective colleges do confer advantages. But the notion that the hierarchy of selectivity conforms perfectly to the hierarchy of economic opportunity is wrong. More than ever, economic opportunity is also dependent upon fields of study and the occupations they qualify students to enter. A teacher with a bachelor’s degree from Harvard is still going to make less than an engineer with an associate degree from any community college.
Fourth, since it is unlikely that we can move large numbers of disadvantaged students into high-cost and high-quality programs at selective colleges, we need to move high-quality programs, and the money to pay for them, to the community colleges and less-selective four-year colleges. where the least-advantaged half of students are currently enrolled.
The growing divide in our postsecondary institutions creates two separate and unequal pathways that widen the economic divide in our society. In the short term, this will not be disastrous, especially if we connect programs of study with employability, ensuring that economic mobility and education are linked.
However, in the long term, the increasing polarization is a much larger problem. Higher education in the United States risks becoming a passive participant in a system that fosters the intergenerational reproduction of economic and cultural elites. In other words, the higher-education system we have created to encourage mobility and economic opportunity is at risk of reinforcing class stratification.
