Payscale’s latest college ROI report uncovers a disturbing trend in higher education for low income students. Wealthier schools with the highest ROI may not be serving those who are eligible for federal monies to help pay their way.
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Pell Grants
Pell Grants are awarded by the federal government to students based upon financial need, and unlike a loan, Pell Grants do not need to be repaid. They are usually awarded to undergraduate students and the award depends upon financial need, cost of school, and full- or part-time status, among other things. Because financial need is an eligibility requirement, then theoretically only the poorest students will receive Pell Grants.
PayScale’s data indicates that the wealthiest schools are the least likely to accept low-income students who receive Pell Grants. In theory, receiving a grant should not matter to admissions, because the tuition is being paid.
Another disturbing trend in PayScale’s newest data is that the schools that do accept students who are paying their tuition with Pell Grants also have the lowest ROI. Simply put, a low ROI means that you will make less money over the years even after paying off your tuition. A higher ROI indicates that the cost of the college was worth it because you make a lot more money over the years than you paid in tuition.
Pell-Grant students seem to be accepted into schools with low ROI, but not with high ROI. This is especially disturbing because even with a college education, it is still difficult to earn one’s way into the middle class. And the schools with the highest return on investment are not taking the poorer students.
College Admissions Process
It is difficult to answer the question, “Why aren’t the wealthy schools taking poorer students?” But anyone applying to college is well-advised to craft a polished application, complete with a well-written essay and sincerely glowing letters of recommendation. The National Association for College Admissions Counseling offers a free downloadable guide in PDF format for students preparing to wade through the college admissions process.
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