Third Way, the national public-policy think tank, has released a new evaluation of more than 1,400 of the nation’s colleges and universities based on how much economic mobility their low-income students later achieve.
The report, The 2023 Economc Mobility Index by Chase Robinson and Ben Cecil, once again shows that when it comes to helping low-income students achieve economic success, the most successful colleges are not the nation’s celebrated, elite universities like Stanford, Duke or those in the Ivy League that typically dominate college rankings.
Instead, as prior reports from Third Way have shown, the schools that convey the most economic mobility are those that enroll large proportions of low- to moderate-income students and provide them a quick return on investment by helping them graduate and begin to earn a solid income.
The Economic Mobility Index
Third Way’s Economic Mobility Index (EMI) mathematically combines two variables: 1) the amount of time it takes low-income students from a given college to recoup the costs of paying for their education, and 2) the proportion of students from low- and moderate-income backgrounds who are enrolled at each school.
Here are the steps involved in assessing a given college’s EMI. First, a Price-to- Earnings Premium (PEP) is calculated for each school. PEP measures how long it takes on average for low-income students (those from families earning $30,000 a year or less) to recoup the costs of paying for their education. (it’s like the Obama-era “Gainful Employment” regulation that evaluated programs by how much post-completion discretionary income former college students had to spend to meet their educational debt obligations.)
To arrive at a PEP score, Third Way determines how much money a student pays out-of-pocket to attend a given institution (i.e., the net amount after scholarships and grants are factored in). Next, it calculates the median salary boost of attendees (ten years after attendance) compared to the average salaries of those with only a high school diploma within the state where the college is located.
For its calculations, Third Way researchers used data from the most recent College Scorecard (reflecting institution-level data from the 2020-2021 academic year) and the U.S. Census Bureau’s American Community Survey (2021 five-year estimates).
Because the College Scorecard only reports data on federally-funded institutions and students, the calculations are limited to schools and students that receive federal aid. The report covers institutions where a bachelor’s degree is the predominant degree offered, so the total average net price in the PEP calculation assumes four years of enrollment.
Third Way assigns a percentile rank identifying where an institution stands in delivering a return-on-investment for its low-income students. The college that gives students the highest return receives a 100% PEP percentile rank (in this analysis, for example, it was the University of Pennsylvania).
To calculate the EMI, Third Way multiplies each school’s low-income student PEP percentile by the percentage of Pell recipients it enrolls. This calculation helps to show which schools not only serve low-income students well, but also educate a large share of them. As an example, Berea College in Kentucky has a PEP percentile of 81.4%, and 88.7% of its students receive Pell grants. Its EMI value is 81.4% x 88.7% = 72.2%.
Finally, rather than a numerical ranking, colleges are assigned to one of five tiers based on their EMI scores, with schools in Tier 1 providing the best EMI value and schools in the Tier 5 the worst.
Results
Public institutions in California, New York, and Texas—many of which provide broad access to students and serve large numbers of minority students do very well on the EMI. The results for all institutions can be found here.
- Among the top 20 institutions on the 2023 EMI, 13 belong to one of two state systems of institutions—namely, the California State University system (eight institutions) and the City University of New York (CUNY) system (five institutions).
- Of the top 20 colleges, 16 were located in the states of California, Texas and New York. In addition, 17 of the top 20, and 41 of the top 50 were public institutions.
- Over one-third (99) of the 281 institutions in Tier 1 are Hispanic-serving institutions, a federal designation for schools with an undergraduate enrollment of at least 25% Hispanic students.
- In addition, seven Historically Black Colleges and Universities (HBCUs) make the top tier.
- Elite schools tend to fare less well because although they typically have very good PEP scores, they educate too few Pell students to achieve a high level of economic mobility. For example, of the eight institutions in the Ivy League, only one – Columbia University – placed in the top tier. Brown University and Harvard University, which both placed in Tier 3, illustrate the problem. They both had excellent PEP percentile ranks (97.1% and 98.9%, respectively), but their percentage of Pell students was low (13.8% at Brown and 12.6% at Harvard), resulting in relatively low EMIs.
Third Way attributed the success of the top institutions to several factors.
- They are located in large, urban areas where students from lower-income backgrounds make up a large share of the population seeking to attend college.
- They have designed campus cultures and policies to support students.
- They tend to keep net tuition low.
- And many institutions have introduced specific student-support initiatives focused on degree completion, equity, and positive post-graduation outcomes.
The report concludes that the institutions that do well on the EMI “go above and beyond” to ensure their students can finance their education and receive a solid return on investment from their college experience. And it claims “there’s a lot to be excited about in higher education as the sentiment around college rankings is slowly moving away from prestige and more toward the best bang for your buck—and in turn uplifting the institutions doing the hard work of educating their students, providing return on investment, and being engines of socioeconomic mobility in the United States.”
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