Students Rich and Poor Are Stressed Out Over Paying for College

A survey of the nation’s college freshmen indicates a class of young adults stressed out about the cost of financing a degree, even if they’re relatively well off.

The study by UCLA’s Higher Education Research Institute lends new insight into not only the concerns young college students have about their debt loads, but also the effects high school experiences have on their attitudes about higher education.

The survey explored in great detail how students at four-year schools who receive Pell grants – a federal grant that’s issued largely to low-income students and maxes out at just under $6,000 a year – differ in their perceptions about college from freshmen who didn’t receive Pell awards. For starters, slightly more than a quarter of the freshmen in this report indicated they received a Pell grant. Black and Hispanic freshmen, at just above 50 percent each, were three times as likely as white students to report they received Pell grants. These figures may be different from other national tallies because the UCLA report only looks at four-year nonprofit colleges and universities.

Students who fund part of their college tuition through Pell grants are much more likely to worry about their ability to pay for a postsecondary degree, according to the survey. More than eight in 10 Pell recipients felt this way, compared to just more than half of non-Pell freshmen. The survey also found that only around one third of Pell recipients felt they could turn to their families for financial support of $3,000 or more to cover their first year of educational expenses, compared to nearly 73 percent for non-Pell freshmen.

Source: The American freshman: National norms fall 2015, UCLA (self-reported)

One explanation for these worries from lower-income students may be the rising cost of tuition and federal aid’s inability to keep up. According to the College Board, the maximum Pell Grant award was sufficient to cover 74 percent of average public four-year tuition and fees in 2005-06, but only 61 percent in 2015-16, even after increases to how much Pell money students could receive.

That concern may be further compounded by the fact that low-income students tend to have a harder time navigating the bureaucracies of higher education and their financial-aid obligations. Lauren Asher, president of The Institute for College Access and Success—who is unaffiliated with the survey—said in an interview that colleges are not currently required to include the full cost of attendance in financial aid letters, or to distinguish between either grants and loans, or federal loans and riskier private loans, “so it can be quite challenging even for sophisticated consumers to know what’s actually in an aid offer.”

That’s particularly true for students who are the first in their families to attend college – a growing demographic among postsecondary students – because they have few who can help them understand the obligations of receiving and maintaining their financial aid.

Pell recipients “have to draw from so many sources,” said Kenneth Eagan, the lead author of the report. “Financial aid packages can change from year to year, it’s not a constant, so if students encounter barriers to getting all of those components lined up just the way that they need them to line up, that could mean a student doesn’t enroll, and … perhaps drops out due to an inability to pay or out of frustration to compile all the necessary sources to pay that tuition bill.”

Recent studies note lower-income students may fare better in college when they enroll in academic and life-skills courses the summer before their freshman year. But the survey indicates just six percent of freshmen in 2015 took such a bridge course, suggesting colleges have much work to do to implement programs that help ensure more students complete college. Pell recipients tend to have lower graduation rates than students who don’t receive the federal grant, though some colleges and universities show virtually no gap between the two types of students (bias alert: my alma mater, Union College, is on this list). Since 2000, U.S. taxpayers have spent $300 billion on Pell grants, and due to a strange quirk in federal law, universities aren’t required to make their Pell graduation rates public unless they’re asked for the data (though that hasn’t stopped enterprising reporters from finding out anyway).

Other differences between Pell students and more affluent freshmen? Pell recipients captured in the survey are likelier to have had B, rather than A, averages in high school and to have worked during high school. They also strongly believe they’ll need to work during college to help pay for tuition and other costs. And while Pell students were nearly just as likely to be accepted by their first-choice college, fewer were able to attend their top picks, with survey results suggesting they were more influenced by the size of the financial aid package than non-Pell students were. For example, 34 percent of Pell recipients did not attend their first-choice school because they say they couldn’t afford tuition, while the same was true for 23 percent of non-Pell students.

The UCLA survey is rife with data that’s organized by both racial identity and type of college, making it a valuable resource for the public. It also explores the self-reported mental health of students who identify as gay, lesbian, bisexual, transgender or queer. Roughly 7 percent of the students who answered questions about their sexuality (and 91 percent did) indicated they identified as LGBTQ. That’s nearly twice as high as the national rate that’s calculated by public opinion polls and university research centers. The survey shows a larger share of LGBTQ students feel depressed or overwhelmed: While 50 percent of heterosexual students rated their mental health as above average, a quarter of LGBTQ students feel the same way.