Gentrification
Merriam-Webster
defines “gentrification” as “the process of renewal and rebuilding accompanying
the influx of middle-class or affluent people into deteriorating areas that
often displaces poorer residents.”
This gentrification prototype arose in the context of the
“urban renewal” of America’s inner cities, but can now be legitimately applied
to public higher education—but without the ‘renewal’ and ‘rebuilding.’ That is, public higher education is not being
renewed or rebuilt; but poorer students are being displaced.
The Gentrification of Public Higher
Education
Only
lately has the word “gentrification” been applied to public higher education, and
for good reason.
Only
lately has the gentrification process—the displacement of less-affluent students
by more-affluent students in public higher education classrooms—been clearly observed
and publicly documented as a growing national phenomenon since the 1990s.
Data
from 420 institutions across America, including the 14 PASSHE universities,
show Pennsylvania is well below the average of those institutions when it comes
to combatting gentrification; that is, poor students are more likely to be
denied a 4-year public education in Pennsylvania than in other states.
Tuition Discounting at Private
Universities
The
key to understanding the gentrification of public higher education lies first
in understanding “tuition discounting,” a financial practice implemented by private
colleges and universities many years ago that has more recently been introduced,
to varying degrees, at public colleges and universities.
Excerpts
from a recent “Inside Higher Education”
article by Kellie Woodhouse¹ explain how it works:
“Private
institutions commonly discount their tuition—using institutional aid (often
derived from tuition revenue) to offer students a discount from the sticker
price—in an effort to entice students to enroll.”
“On
average, private colleges’ discount rate—institutional grant dollars as a
percentage of gross tuition and fee revenue—reached 48 percent for freshmen in
2014, up from 46.4 percent the year before.”
“Put
another way, institutions awarded about 48 cents in institutional grants to
freshmen for every dollar collected for first-year tuition and fees.”
Tuition Discounting at Public
Universities
Four-year
public universities across America generally fall into two distinct categories:
1) AASCU type institutions—i.e., institutions founded in the mid-1800s as
“teachers’ colleges” that later evolved into “comprehensive” universities
(including the 14 PASSHE universities); and 2) all other public universities,
including “research universities” like Penn State, Temple and the University of
Pittsburgh.
A
2007 article² from the American Association of State Colleges and Universities
(AASCU) entitled “Tuition Discounting at
AASCU Institutions” contains the following quotes:
“At
6.4 percent, the average tuition discount rate at [approximately 420] AASCU
institutions is relatively low when compared to the 33.5 percent discount rate
in the private four-year sector and the 14.7 percent rate for all public four
year institutions.”
“This
year, AASCU institutions awarded more than $653 million in need-based and
merit-based institutional grant aid to their students.”
“Fifty-eight
percent of all institutional grant aid at AASCU institutions is awarded to
students without documented financial need. Only 42 percent of institutional
grant aid is awarded on need-based measures, suggesting that institutions are
using discounts to “shape” their cohorts in an effort to enroll students with
high SAT scores, award scholarships to student-athletes, or provide tuition
waivers to minorities and students whose family members are employed at the
institution.”
How Gentrification Results from
Tuition-Discounting Policy
As
seen from the data for all AASCU type institutions, including the fourteen
PASSHE universities, the total annual grant aid was $653 million, spread across
420 AASCU institutions. That amounts to
an average of $1.55 million in annual tuition discount aid per institution.
Note
that on the average, only 42% of those grant dollars went to students with
documented financial need. I.e., AASCU
institutions are already fostering “gentrification” by giving the bulk of their
precious aid dollars on the basis of merit rather than documented financial
need.
Recall
that tuition-discounting is only possible to the extent that an institution
maintains a large-enough difference between a (higher) sticker price and a (lower)
actual cost to educate one student for a year.
Tuition Discounting at the Fourteen
PASSHE Universities
For
purely political reasons, the PASSHE Board of Governors has maintained a
“low-tuition-for-all” policy since 2002: The BOG sets tuition rates at or
below the actual cost of educating one student for one year!
This
Act 188-defying policy has totally disastrous consequences for the majority of PASSHE
students:
1)
If
tuition is set equal to the actual cost to educate one student for one
year, there will be no excess revenue with which to fund tuition discounts—they
simply become impossible to grant. Pennsylvania’s
least-affluent students will then get “priced out” of post-secondary educational
opportunities, while the less-affluent but “lucky” students who can borrow
enough money to meet PASSHE’s very high “bottom line” cost end up with years of
crushing student-loan debt.
2)
If
tuition is set below the actual cost to educate one student for one
year, not only will there be no tuition discounts, but every PASSHE student
will receive an education of declining quality each and every year, a situation
that began in 2002 and continues to the present day.
Prior
to the Great Recession, BOG policy did not allow for any tuition discounting
whatsoever. But in 2008 as the economy
of the State worsened and many workers were thrown out of work, the BOG
permitted a tiny amount of E&G funds to be granted to students in critical
need of financial support.
At
our university, we were permitted to grant about $100,000 in tuition discounts
to PASSHE students, but first we had to prove that there was really a
documented need for any tuition discounts.
Working with our financial aid staff, we were able to identify many PA families
where at least one parent of a PASSHE student had lost his/her job. We then provided some $100,000 in tuition
discounts that year.
Recall
that the AASCU annual average for tuition discounts was 6.4% of the tuition
collected that year. But at the 14 PASSHE
universities, because of the BOG’s low-tuition-for-all policy, we could only
afford to provide about 0.1% (i.e., one-tenth of one percent) of the tuition
and fee revenue collected that year. Note that the AASCU average is fifty times higher than the PASSHE figure!
To
be continued.
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