APSCU Blog: Report: Institutions With The Fewest Low-Income Students Get The Most Taxpayer Support

07 Apr 2015 /By APSCU Communications 
From federal grants and loans to state funding for public colleges, taxpayers support higher education in a variety of ways, most often with the goal of boosting access to postsecondary education for all students. However, a recent report by the Nexus Research and Policy Center found that taxpayers provide significant support for institutions in ways that may not be readily apparent, such as tax breaks for high-endowment private non-profit institutions.

The report found that private non-profit institutions gain huge advantages from government tax exemptions, compared to all other schools. Accounting for these breaks, taxpayer subsidies to the ten wealthiest private non-profit institutions averaged $41,000 per student, or more than three times the amount their states provide for public education per student.

The issue is that these institutions have acceptance rates as low 6 or 7 percent and are far less likely to educate low-income and new traditional students. Meaning they do very little to boost access to higher education or address the opportunity gap in our country.

It turns out that this relationship extends beyond private non-profits. Across all sectors, the highest subsidies are going to schools serving the fewest middle-to-low-income students. In other words, institutions that serve the highest proportions of low-income students receive the least taxpayer aid.

Nexus Subsidy Charts
The report’s authors stated, “In short, the unequal distribution of endowment wealth and the unequal enrollment of low-income Federal Pell grant recipients lead to a pattern where, quite literally, the rich schools get more than their less affluent private and public counterparts, who are bearing the lion’s share of the education of America’s working- and middle-class students.”

This is another example of the gap between our national higher education goals and the reality of how we fund them. Taxpayers are disproportionately supporting institutions that restrict access, particularly for low-income students, at a time when postsecondary education is more important than ever for our workforce and economy.

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