Academic journal article Contemporary Economic Policy

Enrollment at Highly Selective Private Colleges: Who Is Left Behind?

Academic journal article Contemporary Economic Policy

Enrollment at Highly Selective Private Colleges: Who Is Left Behind?

Article excerpt

I. INTRODUCTION

While students who graduate from highly selective private colleges in the United States are a small segment of the population, they tend to play a disproportionate role in society as top politicians, business leaders, and prominent intellectuals. Thus, students who attend these colleges receive unparalleled benefits. The college admissions and financial aid systems at these colleges have gone through substantial transformation during the past few decades. The changes were initiated by the highly selective private colleges in an effort to bolster their enrollment of low-income orminority students. (1)

The success of these efforts, however, depends greatly on how they are balanced against changes that might inadvertently leave low-income students behind. For example, consultations between nine elite private colleges about financial aid matters under the Overlap group, (2) and the subsequent temporary higher education antitrust exemption given by Congress in 1992, are argued by some to be anticompetitive and harmful to some students. (3) Early admission practice by some colleges is also argued to work against low-income students and in favor of those who are willing to pay the full sticker price of college. (4)

As college tuition continues to rise faster than inflation, access has become a buzzword for colleges. There has been no study, however, to determine how the existing admissions and financial aid practices at the highly selective private colleges impact enrollment, especially of low-income students. This study examines whether students with demonstrated financial need are more or less likely to enroll at highly selective private colleges relative to highly selective public colleges. We also ascertain whether race plays any role, independent of income, in enrollment at these institutions.

Enrollment outcome is shaped by three events--application, admission, and acceptance. These events are affected by decisions of the students as well as the colleges. Therefore, student-specific attributes as well as college pricing and financial aid policies can potentially affect the enrollment outcomes. We use a panel data set consisting of freshman students from 25 highly selective private colleges and 7 highly selective public colleges for the academic years 1995-1996, 1999-2000, and 2003-2004. The student data are from the National Postsecondary Student Aid Study (NPSAS). Our analysis uses a probit model to identify factors that influence enrollment of students at highly selective private colleges.

The paper is organized as follows. Section II reviews recent changes in admissions and financial aid practices at the highly selective private colleges relevant to the study. Section III presents descriptive statistics on a sample of students attending highly selective private and public colleges, emphasizing trends and comparisons. Section IV introduces the probability models used to examine enrollment outcomes and discusses the econometric results and implications. Section V contains concluding remarks.

II. ADMISSIONS AND FINANCIAL AID SYSTEMS AT HIGHLY SELECTIVE PRIVATE COLLEGES

In general, whether the current financial aid system provides adequate college access and affordability is subject to debate given the academic preparation of students and the design of the financial aid program. Financial aid generally consists of total grant aid and self-help aid. Grant aid is free and does not have to be repaid, and is comprised of need-based aid (which is based on financial need) and non-need-based aid (which is based on scholarship or merit). Self-help aid consists of loans and work-study (the so-called sweat equity). Colleges use financial need methodologies to determine the amount of money a family is expected to contribute toward the cost of college (commonly referred to as the expected family contribution, EFC) based on several factors including the family's income and assets and the number of family members in college. …

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