As college admission decisions pour in and students weigh their options, some institutions are putting the poorest students at a surprising disadvantage: There are 17 colleges and universities where the lowest-income students may end up paying more out of pocket than the highest-income ones.
At these 17 colleges and universities in 2020-21, students from families earning under $30,000 actually paid more in net price – which is the amount students pay after discounts and financial aid – than those from families making $110,000 a year or more, the latest available federal data from the Integrated Postsecondary Education Data System (IPEDS) showed.
The additional amount ranged from just $152 at Texas College in Tyler, Texas, to more than $5,000 at Brenau University in Gainesville, Georgia. Those figures reflect what was paid by students in the lowest-income quintile compared with what was paid by students in the highest-income quintile.
The 17 institutions are spread across 14 states; two are public universities. Generous financial aid to the higher-income students often accounts for the difference.
All but one of these 17 are among the 700 universities across the U.S. where the net price has risen more for the lowest-income students over the last decade than for their higher-income peers, as USA TODAY and The Hechinger Report reported recently. (At Mississippi Valley State University, the price declined for both groups but dropped significantly more for the highest-income students.)
Trends in net price by income and other information about universities and colleges nationwide can be found in The Hechinger Report’s newly updated Tuition Tracker.
“It provides a further reflection on what’s the purpose of higher education as a whole. Is it to reward and provide opportunity for the few and the fortunate or is it actually to lift this generation up and leave them better off than the previous?”
Michael Itzkowitz, education consultant and former director of College Scorecard, an online federal government tool
At Brenau, the lowest-income students paid $24,640 out of pocket in 2020-21 after all the discounts, grants, and scholarships. This was over $5,000 more than what the highest-income students had to pay. Lowest-income students at Brenau, in fact, have paid more in net price than highest-income ones every year since 2017-18, and the gap has been more than $3,000 in all those years.
In response to questions, Brenau sent a statement saying that it “is working to rebalance net price across income categories.”
“The majority of institutional aid for first‐time, full‐time freshmen students at Brenau is merit‐based; students seeking lower direct cost also have the option to enroll in online courses at a significantly reduced tuition rate,” the university statement read, noting that around 13 percent of its first‐time, full‐time students were enrolled online. Brenau only reports tuition prices for in-person students to IPEDS, which the university’s statement said “skewed” the net-price calculations.
Higher-income students received more financial aid, on average, at all but one of these colleges in 2020-21, likely because more institutional merit aid went to them. This is mainly due to colleges competing for students from high-income families, who are able to pay high tuition and bring in needed revenue but expect to receive scholarships and discounts.
“[It] begs the question of why and what kind of college are they?” said Michael Itzkowitz, an education consultant and the former director of College Scorecard, an online federal government tool to compare the cost and value of higher education institutions. “It provides a further reflection on what’s the purpose of higher education as a whole. Is it to reward and provide opportunity for the few and the fortunate or is it actually to lift this generation up and leave them better off than the previous?”
Many universities provide significant amounts of aid to students who may not necessarily need it. Between 2001 and 2017, 339 public universities spent $32 billion in institutional aid on students who did not have financial need, according to a New America study. Overall, about 40 percent of all the institutional aid at these universities went to students whom the federal government deemed able to afford college without aid. Since there’s only so much money to go around, discounts for non-needy students may leave the low-income students with larger funding gaps and a higher net price.
While many colleges and universities have their own tools to allow prospective students to calculate net price, federal net price data available through IPEDS is the only way students and parents can compare colleges and universities nationally to decide how much they will need to pay to attend any particular college or university. The Hechinger Report’s Tuition Tracker tool, which uses IPEDS data, allows the students and parents to navigate the federal information more easily.
An audit published by the U.S. Government Accountability Office (GAO) last November found that nine out of 10 colleges in a nationally representative sample either do not include or understate the net price in their aid offers. While the exclusion of the net price leaves students guessing how much they’d need to pay, an underestimation makes a college appear less expensive than it is, the report noted.
IPEDS’ net price data could contain inaccuracies at times since the calculations are based on self-reported data from colleges and universities. For example, according to the IPEDS data, The College of Idaho in Caldwell, Idaho, appeared to have charged the lowest-income students about $9,000 more than the highest-income students in 2020-21. But Joe Hughes, the college’s director communications, said by email that the college had made an error while reporting financial aid data to the agency. When that error was corrected, the net price for the lowest-income students in 2020-21 at the college came out to be about $3,300 less than the price for the highest-income students. This made sense, because the net price at the college for the lowest-income students has historically been lower than for the highest-income ones.
But at Columbia College in Columbia, Missouri, and at Southern New Hampshire University (SNHU), the lowest-income students have had a higher net price than their highest-income peers consistently since 2012-13, the IPEDS data show.
Lowest-income students at Columbia College have been paying more in net price over that period, and in many of those years, the gap was $5,000 or more. The college did not respond to a request for comment.
At SNHU, the lowest-income students paid between $5,000 and $10,000 more than the highest-income students in every year from 2012-13 to 2019-20. Students in the lowest-income quintile paid $22,903 in net price in 2020-21 compared to the $22,741 that the highest income students paid. According to the university, the $162 gap remained after cuts made in tuition to align the cost of on-campus programs with online programs, which are cheaper, and after one-time scholarships were given to all incoming campus freshmen covering the first year’s tuition.
SNHU’s president, Paul LeBlanc, argued that IPEDS data does not accurately represent what students pay there, because most of SNHU’s 100,000 undergraduates are enrolled in online programs, which cost significantly less than on-campus programs. In fall 2020, it reported just under 1,800 students as first-time, full-time, and half of those were enrolled online. These were the ones IPEDS accounted for when calculating net price.
“IPEDS forces us to report in a very skewed way,” said LeBlanc. “You're only allowed to report the one [number] so we have to take the high one, which is campus tuition.”
IPEDS calculates the net price at an institution based on the cost of attendance, which includes tuition and required charges, such as books and living expenses, for first-time, full-time students for the academic year. The tuition amount is left to the discretion of the institution.
Cost of attendance at SNHU could be lower for online students since they may not incur living expenses. However, even if that were to bring the average cost of attendance down, the average financial aid (which is deducted from the cost of attendance to arrive at the net price figure) for the lowest-income students consistently remained less than half of what the highest income students got between 2014-15 and 2019-20. This means that the overall net price for the university might have come down if the cost adjustments were to be taken into account, but the lowest-income students would have still paid more, since they received less aid, on average.
The average aid to students in both income quintiles was more aligned in 2020-21, hence the relatively smaller gap of $162 in net price.
This story about college net-price disparity was produced by The Hechinger Report, a nonprofit, independent news organization focused on inequality and innovation in education. Sign up for our higher education newsletter.
At The Hechinger Report, we publish thoughtful letters from readers that contribute to the ongoing discussion about the education topics we cover. Please read our guidelines for more information. We will not consider letters that do not contain a full name and valid email address. You may submit news tips or ideas here without a full name, but not letters.
By submitting your name, you grant us permission to publish it with your letter. We will never publish your email address. You must fill out all fields to submit a letter.