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College Degree Not a Magic Ticket Out of Poverty

A recent study by the Institute for Higher Education Policy found that many young adults with a postsecondary degree are still living in poverty. The report examines the population of low-income American young adults, hoping to shed light on how higher education can improve economic outcomes for students in poverty.

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Increasing college access and completion rates is widely viewed as a crucial step for helping low-income individuals rise out of poverty - and for strengthening the economy as a whole. Earning a degree can give students invaluable life and professional skills, and having a more educated workforce in turn increases the country's overall productivity. Previous research by the Institute for Higher Education Policy (IHEP) suggests that over half of new U.S. jobs require some postsecondary education, making higher ed a 'basic requirement' for professional success.

However, IHEP's new study reminds us that while educational attainment is an essential first step, a college degree is not a magic solution to poverty. According to the U.S. Census Bureau, nearly 60% of young adults (age 18-26) living near or below the poverty line had earned a degree or were attending a postsecondary institution in 2008. The Census Bureau listed the poverty threshold for single adults under age 65 without children in 2008 at a salary of $11,201 per year.

The high percentage of low-income individuals participating in higher education is heartening. It indicates that American colleges and universities have made important strides in increasing access to education for low-income students. However, the report points out that this number actually includes three distinct groups:

  • Low-income students currently enrolled in a college or university
  • Low-income individuals who had previously attended a postsecondary institution but had not received a degree
  • Low-income individuals who had earned a college degree but are still considered poor

IHEP sees the second and third groups as problematic from an 'educational, economic and social perspective' because they point to the fact that poverty persists for many individuals even with postsecondary education. And while postsecondary participation for low-income young adults has climbed in recent years from 42% in 2000 to 47% in 2008, the proportion of this population that actually holds a college degree has stayed steady at around 11% in the same period of time. IHEP thus set out to paint a demographic 'portrait' of this group in the hopes of understanding how the higher education system can both remove obstacles to attaining a degree and help low-income individuals take full economic advantage of their education.

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Examining the Population of Impoverished Young Adults

Drawing from Census Bureau's American Community Survey (ACS), IHEP found that, in 2008, 18% of America's 35.2 million young adults were living near poverty. Of those young adults defined as 'low-income' (living at or below the poverty line), a shocking 60% were living in deep poverty. Racial or ethnic minorities are disproportionately more likely to experience poverty - a much lower percentage of Asian and white young adults (14% and 15%, respectively) live in poverty than blacks, Hispanics and Native Americans (23-26%). Young adult females are more likely than their male peers to live in poverty, particularly deep poverty. The report also notes that 'low-income young adults' represent a very diverse population that can't be fully represented by race and gender - they include single parents, students with disabilities, foster youth, poor and working students and many other economically disadvantaged groups.

Although overall rates of postsecondary participation are rising for low-income young adults, low-income whites and Asians are more likely to attend college than their black, Hispanic and Native American peers. The report notes that this is probably due to the fact that black, Hispanic and Native American students are significantly more likely to drop out of high school. IHEP points out that reducing secondary drop-out rates for these groups will help prevent them from 'falling through the cracks' before college is even an option. However, some progress is being made in this area - the high school drop-out rate for all low-income students did fall an impressive 6 percentage points from 24% in 2000 to 18% in 2008.

At the same time, the proportion of low-income young adults enrolling in college increased. Between 2000 and 2008, the proportion of low-income whites and Asians enrolled in college increased by 3 percentage points, the proportion of blacks increased by 5 percentage points and the proportion of Hispanics increased by 8 percentage points. Given the growth of racial and ethnic minorities in the overall American population, this is especially promising growth trend in educational access.

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In spite of increased participation in higher education, many low-income students remain in poverty after graduation - approximately one in 10 low-income young adults holds a college degree. This means that a significant portion of low-income students are not experiencing the promised economic benefits of higher education. Given that postsecondary credentials are basically required to climb the economic ladder in the U.S., it's important to figure out why the system isn't working for so many individuals.

One issue may be barriers to graduation. As noted above, the percentage of low-income students who actually earned a degree has stayed the same over the past decade even as enrollment numbers have increased. Low-income students typically face more challenges than their peers in attaining a degree. Not only are the costs associated with college more difficult to overcome - tuition, fees, books, etc. - many low-income individuals are first-generation college students who don't necessarily have the 'cultural capital' and life skills that make it easier for their peers to succeed. For example, recent research has found that while community college students are more likely to qualify for federal financial aid than students at 4-year institutions, they're much less likely to apply for it. Among the many possible reasons is the fact that many simply never learned how.

However, improving graduation rates still won't solve the growing problem of young adults for whom a college degree has not conferred economic mobility. One possible source of this problem is the fact that low-income students are less likely to attend selective institutions. The IHEP report cites previous research that found that young adults in poverty are more likely to attend postsecondary institutions that aren't commonly associated with high-salary occupations - as the study referenced above notes, there's a much higher proportion of low-income students at community colleges, which offer two-year associate's degrees that can include excellent vocational training, but rarely for careers with an expectation of high earnings.

The current IHEP report doesn't delve fully into solutions to the problem. However, the organization is planning a series of upcoming briefs that examine the issue from many angles in the hopes of identifying pathways for low-income young adults to both degree attainment and economic success.

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