New Report Shows Continued Higher Education Gaps for Disadvantaged Students Alongside Funding Cuts

The state’s most recent accountability report for higher education—released this week—shows some progress in many areas but big challenges in college affordability and in addressing postsecondary degree attainment gaps for low-income and underrepresented minority students.

The Council on Postsecondary Education’s annual report, “Stronger by Degrees: A Strategic Agenda for Kentucky Postsecondary and Adult Education, 2011-2015,” tracks Kentucky’s progress in meeting higher education targets the state has set for 2015. Progress is measured according to 27 indicators, which fall into four categories: college readiness; student success; research, economic and community development; and efficiency and innovation.

Although the state has experienced some improvement, it is either on track to meet its target or has already met its target in only eight of the 27 indicators: college readiness of all high school graduates; total degrees and credentials; graduate degrees conferred; transfer from Kentucky Community and Technical College System (KCTCS) to four-year colleges and universities; associate graduation rate for low-income students; degrees and credentials in Science, Technology, Engineering, Mathematics and Health (STEM + H) fields; and on-line learning.

The higher education system is clearly making progress in helping Kentuckians obtain bachelor’s and graduate degrees, including in STEM fields. However, the overall picture for low-income and underrepresented minority students is not rosy.

Most troubling of all is the huge lost ground in bachelor’s graduation rates for low-income students since 2009. The bachelor’s graduation rate for low-income students was 46.2 percent in 2008-09 but dropped to 34.5 percent by 2010-2011—where it remained in 2011-2012. The state is also not on track for its targets for bachelor’s graduation rates for underrepresented minority and academically underprepared students. In contrast to Kentucky’s overall bachelor’s degree graduation rate of 48.2 percent in 2011-2012, the bachelor’s graduation rate for underrepresented minority students that year was 33.6 percent and for underprepared students was 28.6 percent.

In addition, although the state is currently on track to reach its target for the associate graduation rate for low-income students, the graduation rate for these students is still substantially lower than the rate for all associate degree students. The associate graduation rate for low-income students was 11.7 percent in 2011-2012—up from 10.9 percent in 2010-2011—but the associate graduation rate for all Kentucky students in 2011-2012 was 13.1 percent. Also, the state is not on track for associate graduation rate targets for either underrepresented minority students or students who are academically underprepared. The 2011-2012 associate graduation rate for underrepresented minorities is just 7.7 percent and the rate for academically underprepared students is 8.9 percent.

These gaps in higher education attainment for low-income and underrepresented minority students are most certainly shaped by the state’s limited funding for higher education, which has resulted in steep rises in tuition. As the report shows, funding per full-time equivalent student was $1,029 in 2009-2010 and declined to $916 in 2012-2013 (adjusted for inflation). And this decline in state funding extends back further in time. The state’s appropriation to public postsecondary institutions in 2010 was 14 percent lower (in inflation-adjusted terms) than in 2000.

This trend in declining state funding has meant increased tuition and fees for students, which surpassed state funding as the largest source of revenue for the state’s public colleges and universities in 2010.¹ Since 1998, tuition at Kentucky’s public higher education institutions has increased by more than 200 percent, and rising costs are particularly problematic for low-income students. Financial barriers are among the most significant in preventing low-income students from enrolling in college or completing a degree.

Unfortunately the state’s financial aid system can do very little to mitigate the skyrocketing costs of college for Kentucky students as its scholarship programs are underfunded as well. The “Stronger By Degrees” report shows that 96,666 Kentuckians who applied for and are eligible for need-based aid in 2012-2013 were denied assistance because funds were exhausted—an increase of nearly 42 percent from 2009-2010. The report also indicates that financial aid is making less of a difference in paying the full costs of college in Kentucky; since 2009-2010 low-income students have had a declining amount of grant and scholarship aid—after paying for tuition, fees and books—to help pay indirect costs like room and board and transportation.

In order for our state to address the higher education attainment gaps for low-income and underrepresented minority students, greater funding is needed both for our state’s public higher education institutions and its financial aid system—particularly for need-based financial aid. By making college less affordable for many Kentuckians—particularly low-income and underrepresented minority students—the state is discouraging them from getting the skills they need to obtain decent employment or putting them deep in debt, both of which harm our economy.