Can the United States Help Nearly 20 Million Hard-Working Americans Complete College?

Washington, D.C., July 10, 2007—Today, earning a postsecondary degree is the best bet the nation’s nearly 20 million working poor individuals ages 24–64 have to earn a living wage. However, success in college is still out of reach for most of these hard-working Americans, who hold the key to helping the nation address work force needs, close equity gaps, and remain competitive in the 21st century.

According to a major new report by the Institute for Higher Education Policy (IHEP) with financial support from USA Funds, gaining a postsecondary education requires that these students navigate a minefield of conflicting work and family demands, as well as confusing financial-aid policies that can penalize students for earning wages. The report—College Access for the Working Poor: Overcoming Burdens to Succeed in Higher Education—draws from U.S. Census Bureau data and other federal sources to present one of the most detailed analyses to date of the working poor and higher education. The report discloses critical challenges facing working poor adults and traditional college-age youth from working poor families in pursuing and completing higher education.

Working Poor Adults

• Heavy work and family responsibilities often prevent working poor adults from attending college full time. For example, in 2003–04, 47 percent of working poor adults were enrolled in higher education half time or less.
• The financial aid that working poor adults receive typically is inadequate to cover their college costs. Even with financial aid, the working poor must come up with an average of nearly $4,000 a year out of their own pockets to continue their education.
• Part-time enrollment and the financial challenges of meeting college costs reduce the number of working poor adults who actually receive a college diploma or other academic credential. Six years after beginning college in 1995–96, nearly half of working poor adult students who began in a degree or certificate program had left without obtaining a credential.

Working Poor Youth

• Because educational attainment among working poor adults is generally low, youth from working poor families are frequently the first in their families to go to college and often struggle to navigate the college-going process. Among students with family incomes slightly above the poverty level, 37 percent of dependent working poor students in 2003–04 were first-generation college students, compared with 19 percent of their classmates from higher-income families.
• Few working poor youth can rely on their parents for financial support for college, yet, even after receiving financial aid, traditional college-age students from working poor families still had to come up with almost $4,300 on average to meet remaining college costs.
• Financial constraints coupled with the obstacles that first-generation students face reduces the percentage of working poor youth who complete their degrees. Only 28 percent of working poor dependent students who began a degree or certificate program in 1995–96 had earned a bachelor’s degree by 2001. The comparable rate for higher-income students was 44 percent.

“Higher education brings higher pay and new opportunities to the working poor, as well as social benefits that include better work force productivity and higher tax contributions,” said IHEP President Jamie P. Merisotis. “It is therefore essential that the working poor have the same opportunities to enter and complete college as do other populations.”

Call for New Policy Directions

Economic projections suggest that the fastest job growth will occur in areas that require at least some higher education. Among poor adults who worked full time in 2005, the average annual income was slightly over $19,000, compared with slightly over $56,000 for nonpoor full-time workers, the report finds.

To help move the working poor toward higher-paying jobs, the report recommends that policies and programs be developed that target their particular needs. While the working poor and nonworking poor have much in common, their policy needs are different and should not be lumped together. Federal and state lawmakers, as well as higher education officials and employers, all have roles to play.

Polices that would target working poor adults include:

• Providing tax relief for working poor students, such as allowing those who enroll at least half-time to claim expenses such as room, board, and books under certain education tax credits.
• Increasing the exempted amount that working independent students can earn under federal need analysis, thereby increasing their eligibility for Pell Grants.
• Offering evening or weekend hours for financial aid consultation, academic advising, and other student services; keeping libraries and computer labs open extended hours during breaks; offering core academic classes at a range of times.
• Allowing postsecondary education to meet the Temporary Assistance for Needy Families work requirements and increasing allowances for child care in determining financial need.

Policies that target the dependent working poor and their families include:

• Reducing working poor parents’ financial burden in federal financial aid need analysis.
• Conducting more outreach into low-income communities to teach “college knowledge” and encourage students to pursue higher education, and offering mentoring and support programs for low-income and first-generation college students.

  “Working poor students—young and old alike—often find themselves in the precarious position of reaching for the education many of their parents lack, yet without financial and logistical support to help them get there,” said Henry L. Fernandez, USA Funds executive director, access and outreach. “Together we can make a difference for these individuals and for the nation.”