Possible Lives

A public debate is raging about the future of financial aid, with experts often trying to blame financial aid recipients rather than the system. Data on their academic performance have been used to question whether they belong in college in the first place. Data on their use of student loans have been used to question their financial literacy and how they live their lives. Data on their degree completion rates have been used to question whether the Pell Grant Program is a waste. Some even ask whether, since college credentials result in increased earnings, we should subsidize college participation for anyone. Let those who can afford it get ahead, while the others remain behind, they argue.

Amid this national furor, students from lower-income families are simply trying to make a better life. In this chapter you'll meet students in the Wisconsin Scholars Longitudinal Study, including the three men and three women who serve as focal points throughout much of the book. But first, let's take a look at the original plans and designs of financial aid and what happened to them over time.

College Then and Now

In the 1960s, when federal financial aid policy was first formulated, the nation was in the midst of a period of economic growth and security, declining poverty, and great social change. Women, African Americans, immigrants, and working-class white people were all clamoring for a shot at middle-class jobs and the American dream, and politicians in Washington wanted to help. From President Lyndon Johnson on down, many policymakers believed that helping people improve their education and skills levels would in turn help the nation. Providing access to higher education was a clear and seemingly fair way to do that.

Passage of the Higher Education Act of 1965 dramatically increased federal investment in higher education and provided grants and loans for students attending public and private colleges. In 1971, the U.S. Senate Subcommittee on Education debated a bill introduced by Senator Claiborne Pell that took things a step further, establishing as a policy of the federal government "the right of every youngster, regardless of his family's financial circumstances, to obtain a postsecondary education." His actions followed those of the Truman Commission, which in 1947 recognized that college costs impeded the nation's ability to double the number of college goers (from 2.3 million in 1947 to 4.6 million by 1960). While that commission took steps to create more affordable institutions of higher education — most critically, the nation's community colleges — Senator Pell and his colleagues believed that it was also important to indirectly subsidize the costs of college. The bill provided $1,200 annually for each student to use as a voucher to lower the amount of tuition they paid at the college or university of their choice. In 1972, the bill passed, and the Pell Grant was born.

The creators of the current federal student aid system knew that college degrees brought real opportunities. The architects of the financial aid system did not, however, envision college as the only route out of poverty. During the same period, Congress invested in jobs programs, a safety net for those left behind, and Head Start for the children of poor families. The emphasis was on college as one option, one possible pathway, and the Pell Grant Program was organized to support that. The grant could be taken to any college or university in the nation participating in the federal student aid program, providing students with a wide range of options, and policymakers hoped that the higher education marketplace would respond by ensuring that opportunities were of the highest quality.

The creation of the financial aid system followed more than a century of investment in public higher education, beginning with the Morrill Act of 1862 and continuing with the GI Bill (1944), the Truman Commission (1947), the National Defense Education Act (1958), and the California Master Plan (1960). By the time the Pell Grant was created in 1972, 80 percent of American college students were enrolled in public colleges and universities. Historian Roger Geiger described the scene this way: "American states poured enormous resources into building public systems of higher education: flagship universities were expanded and outfitted for an extensive research role; teachers colleges grew into regional universities; public urban universities multiplied and grew; and a vast array of community colleges was built." Economists Claudia Goldin and Lawrence Katz have linked these major investments in public education to a growth in human capital that enabled the United States to thrive as a global economic powerhouse. These results would not have occurred if only the wealthiest or even only the highest-achieving students went to college.

Despite these overt commitments to higher education as a public good, not everyone shared Claiborne Pell's vision for how to bring more equality of opportunity into the American system. In fact, the "system" of higher education has never been much of a system at all. It is instead a loose conglomeration of government institutions (at the local, state, and federal levels) and both public and private educational providers that share some similar interests but hold many different ones as well.

Soaring rhetoric about the value of hard work obscures the fact that family money has long been one of the best predictors of college success. In the words of the Truman Commission: "For the great majority of our boys and girls, the kind and amount of education they may hope to attain depends, not on their own abilities, but on the family or community into which they happened to be born or, worse still, on the color of their skin or the religion of their parents."

The children of wealthy families are still most likely to complete college, followed by students from middle-income families. Students from low-income families are the least likely to graduate. Should breaking the link between family income and degree attainment be a public priority supported by taxpayer dollars? In the late 1960s and 1970s, states including California, Florida, Michigan, and North Carolina said yes and invested resources in their public colleges and universities in order to keep the prices charged to students low, while also creating state need-based aid programs to complement the federal Pell. State fiscal support for higher education nearly tripled from $3.56 per $1,000 of state personal income in 1961, to $10.42 in 1979.

Other states disagreed. Massachusetts, New Hampshire, New Jersey, Pennsylvania, and Vermont, among other states, appropriated little money to public colleges and...