News: Data, Research & Evaluation

Report Roundup: Racial Discrepancies in Institutional Funding, Nonfederal Aid

Monday, September 9, 2019  
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By Janai Raphael, Graduate Assistant for Research and Data Analysis

NCAN members know that most of our students face an uphill battle when it comes to financing their postsecondary education. Two recent reports shine a light on the deep-rooted inequities in resources students of color, in particular, face on their higher education journeys.

Which Institutions Receive the Most State and Local Funding?

College is often seen as a tool students can use, regardless of their background, to climb the ladder of social mobility to a life with a surplus of opportunities for themselves and their families. But what happens when students enroll at an institution that’s facing its own inequities in resources? In a new report, the Institute of College Access and Success’ (TICAS) takes a deep dive into the local and state appropriation patterns at public colleges and universities and the lasting impacts they have on students.

TICAS, an NCAN member, found that almost three-quarters (74%) of all Black, Latino, and other students of color enroll in public institutions. More than half (54%) of these students choose to enroll at a public community college. Despite increases in enrollment of students of color across all institutional types, community colleges continue to serve the largest share of minority students. In other words, students of color continue to be underrepresented at more selective, research-intensive, and better resourced institutions. In 2016, students of color only accounted for 23% of the total enrollment at doctoral universities across the country

Compared to their private counterparts, public colleges and universities often have smaller budgets to support their students to graduation. Moreover, community colleges only see a fraction of the support other public institutions receive, which in turn results in fewer student supports, lower graduation rates, and a smaller chance of success for some of our nation’s most disadvantaged students.

According to the report: “During the 2006-07 academic year, community colleges received the same level of per-student and local appropriations as baccalaureate colleges, but only half (49%) the funding directed at doctoral universities and 78 percent of that directed at master’s colleges and universities.

As a result of the Great Recession, public institutions faced both sizeable increases in enrollment and substantial cuts in per-student appropriations from their local and state governments. Community colleges and baccalaureate colleges saw the smallest dips in per-student appropriations (18% and 12%, respectively), while master’s colleges and universities (21%) doctoral universities (25%) saw larger cuts to their budgets. Even with a smaller decline in appropriations, community colleges only saw 82% of the fiscal support awarded master’s degree-awarding institutions and 54% of support directed to doctoral universities by 2011.

In response to the decline in funding, many institutions increased tuition to generate more revenue. Between 2006 and 2016, doctoral universities increased their per-student tuition rate by an average of $5,000. As institutions of access and affordability, community colleges were unable to implement this strategy and only increased tuition by $850. Consequently, community colleges saw an average decline in total revenue of 5%.

Between 2011-2016, state investment in higher education increased, with community colleges receiving the largest gains in per-student appropriations from their state and local governments. These institutions saw increases in funding of 31%, while both master’s and doctoral institutions’ support only increased by 9%. Yet, funding disparities persisted between the institutional types. By 2016, community colleges only received 65% of doctoral universities’ appropriation revenue, a gap of nearly $2,900 per student

Who Receives Nonfederal Grant Aid?

Racial disparities also exist in the disbursement of nonfederal scholarship and grant aid awarded to undergraduate students. An August 2019 report by the U.S. Department of Education examines students of colors’ likelihood to receive aid and compares the amount of nonfederal grant and scholarship aid awarded to that the peers.

Nonfederal scholarship and grant aid is most commonly awarded by higher education institutions, employers, states, and other private sources. During the 2015-16 academic year, 48% of Pacific Islander students, 47.6% of Asian students, 46.3% of Hispanic students, and 46% of White students received nonfederal grant aid. In contrast, only 43.4% and 42.6% of Black students and American Indian students, respectively, received aid. In dollars, Asian students received an average amount of $8,500, followed by White students who received an average of $7,400. Hispanic students ($5,400) and American Indian students ($5,800) received the lowest amounts of nonfederal aid.

There were also racial gaps at the state and institutional levels among grant and scholarship recipients. Pacific Islander and White students were the most likely to receive merit-based state aid. Asian and White students were also the most likely to receive grant aid from their institutions. While only 8% of Black students received institutional merit-based aid, 14.2% of White students received aid

These reports from TICAS and the Department of Education bring light to funding patterns that have continued to divert money and support from students of color who need it the most. Whether through local and state funding of their institutions or through direct scholarship and grant aid, access to resources and financial aid is essential for all students as they strive for postsecondary success.