How Top Performing Colleges and Universities Drive Economic Mobility

Since she was four, Angie Rodriquez has asked for her grandmother’s blessing at the start of each school year. The annual call to Oaxaca symbolized the importance of Angie’s education—which her grandmother valued as a privilege not available to everyone. Angie and her grandmother are right. As Angie said to us, “the statistics say that I may not walk out of here with a degree.” Angie herself is on track to a career in nursing, but her understanding of the probabilities reflects a core fact about American higher education: Its benefits are not equally available to everyone.

In a fair system, students’ earnings as adults would not depend on the finances of their families of origin. That’s not the American reality. Instead, there is a persistent gap in early career earnings between students who enter college from families with low incomes and their better-off peers.

Stories of individuals like Angie beating the odds are inspiring, but making widespread economic opportunity a reality requires that students in every community have access to postsecondary institutions that drive economic mobility. Thankfully, we have models to learn from: Drawing on our quantitative analyses of nationwide institutional data and conversations with hundreds of administrators, faculty, staff, and students at high-performing colleges and universities, Public Agenda has identified a set of practices that promote positive economic outcomes for students from families with low incomes.

Focus on Completion

At the institutional level, higher completion rates are associated with stronger earnings. A five percentage point increase above the median six-year completion rate at four-year colleges and universities—from 56 percent to 61 percent completion—is associated with an average $1,283 increase in median annual earnings. This earnings boost can mean the difference between living paycheck to paycheck or starting to build wealth as a recent graduate.

Crucially, improving completion rates will propel economic mobility only if those gains focus on students from low-income families. The colleges and universities that drive positive outcomes for economically disadvantaged students are effectively identifying and addressing the barriers that stand in the way of low-income students’ progress.

Meet Basic Needs

Financial precarity is the defining fact of life for low-income families, making employment during college non-negotiable. Off-campus jobs and their inflexible schedules create barriers to academic success. Institutions that prioritize on-campus employment keep working students connected to college and help students develop professional skills and networks.

Along with the daily effort to make ends meet, many students are just one emergency away from exiting their academic or professional programs. Food pantries, clothing closets, and other basic needs services provide a crucial safety net and have the widest reach when they are centrally located, welcoming, and well-marketed. On-campus childcare, healthcare centers, referral services, and emergency financial assistance can make it possible for students to stay on track.

Get Students Earning

Families with low incomes pay less for each year of college than their counterparts with more financial resources. This is an excellent first step toward fairness in higher education. Colleges and universities with ample financial resources can provide generous institutional financial aid to low-income students. These institutions could drive upward mobility by enrolling and subsidizing a larger share of students with limited incomes.

On the other hand, the majority of postsecondary institutions in the U.S. have very few options for increasing affordability. All institutions, however, can support students to move efficiently through academic and professional programs by investing in clear transfer pathways, well-resourced advising, and free or low-cost summer academic recovery courses. Students who earn a degree or certificate more quickly access higher earnings sooner and maintain eligibility for time-limited financial aid. Losing access to financial aid can derail a promising trajectory to a good-paying job. The challenges compound when students withdraw with loan debt and no degree or certificate.

Invest in the Region

Institutions with strong economic mobility outcomes demonstrate the value of higher education to individuals, families, and communities. This work is particularly important in places where the value of choosing higher education may not be apparent. Campuses that host community-based and K-12 programs become familiar and comfortable to potential students and their families, and universities’ human resources—in the form of faculty, staff, and students—can provide specific services—such as tutoring, mentoring, and health care—that increase degree attainment rates in the community.

Long-term investments in regional collaboratives that include multiple postsecondary education institutions, government, economic development entities, and public- and private-sector employers can build college-to-career pipelines and strengthen the regional economy.

Scale Through States

While students from wealthier families may consider colleges and universities located around the country, the vast majority of American students can benefit from a postsecondary institution that drives economic mobility only if one exists where they live.

The American Council on Education and the Carnegie Classification of Institutions of Higher Education has identified a set of institutions they define as Opportunity Colleges and Universities based on high performance in both access for low-income students and early-career earnings. The 430 Opportunity Colleges and Universities are not evenly distributed across the country; while there are 56 in California, there are none in Hawaii, Nevada, New Hampshire, or Vermont.

The results of Public Agenda’s quantitative analysis point to a state earnings premium. After accounting for a range of institution-level differences and regional economic factors, early-career earnings among students from bachelor’s degree granting institutions in California, New York, and Texas—three of the states with the highest earnings premiums—are $8,469 higher, on average, than earnings in the lowest performing state. Each of these three states has a well-organized, well-resourced public education system, and residents reap the benefits.

State policymakers must examine their higher education policies, funding models, financial aid offerings, and organizational structures to ensure that every American student has access to a postsecondary education that creates economic opportunity.

Rebuild Public Trust by Creating Opportunity

In repeated surveys, Public Agenda has found that strong majorities of Americans agree that higher education institutions care more about making money than educating students. While some of the distrust in higher education is undoubtedly the result of misleading attacks on the sector, the unequal distribution of higher education’s benefits—unequal even among those who have completed degrees—creates a legitimate sense that the promise of opportunity through higher education has been broken.

When citizens in a democracy feel that cornerstone institutions are rigged against them, they are unlikely to stand up in defense of that democracy. Fortunately, applying the lessons learned through research creates an opportunity to rebuild trust by substantively improving higher education’s capacity to serve students from low-income backgrounds.

This content was paid for and created by Public Agenda. The editorial staff of The Chronicle had no role in its preparation. Find out more about paid content.