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Opportunities for low-income students at top colleges and universities: Policy initiatives and the distribution of students

Publication Abstract

Pallais, A., and Sarah E. Turner. 2006. "Opportunities for low-income students at top colleges and universities: Policy initiatives and the distribution of students." National Tax Journal, 59(2): 357-386.

Whether the nation's most selective and resource-intensive colleges and universities are successful in serving as "engines of opportunity" rather than "bastions of privilege" depends on the extent to which they increase the educational attainment of students from the most economically disadvantaged backgrounds (Bowen, Kurzweil, and Tobin, 2005). Less than 11 percent of first-year students matriculating at 20 highly selective institutions were from the bottom income quartile of the income distribution, leading to significant concerns from higher education leaders and policy makers about the role of higher education in reducing intergenerational inequality, particularly in an era of high returns to education. Responding to what Lawrence Summers described as the "manifest inadequacy of higher education's current contribution to equality of opportunity in America," Harvard University and other public and private universities have introduced new initiatives designed to encourage the enrollment of students from low- and moderate-income families. One question addressed in this paper is whether the population of low-income students with high observed academic achievement is sufficiently large that aggressive institutional policies will be an effective tool in increasing the representation of low-income students at the most highly ranked colleges and universities. Using data on test-taking outcomes we also examine where students currently send scores (as a proxy for application) and then consider the extent to which differences in family income affect students' choice sets. While the problem of the underrepresentation of low-income students affects both public and private universities, the effect of outreach and financial aid policies on outcomes is likely to differ appreciably across institutions.

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