A Stone’s Throw is the Difference Between a Pit or a Peak for Low-Income Students

The Economic Mobility Index (EMI) highlights colleges that offer low-income students the most value for their educational dollars. The EMI shows how well schools deliver ROI to students from families earning $30,000 or less per year by assessing how long it takes them to recoup the cost of obtaining their credential based on the net price they pay and the earnings they receive 10 years after enrollment. Additionally, the EMI factors in a school’s Pell Grant recipient enrollment to uncover which institutions enroll large proportions of economically marginalized students while ensuring their degrees pay off post-graduation. The federal Pell Grant is awarded to undergraduate students with high financial need, and as the majority (63%) of recipients come from households with less than $30,000 in family income, there is meaningful (though not precise) overlap between this population and the income marker we use in the EMI calculation.

The EMI places institutions into five quintile tiers based on performance on these metrics. A Tier 1 rating on the EMI indicates that the school is keeping costs low, leading graduates to quality jobs with good salaries, and enrolling a large percentage of Pell recipients. In comparison, a Tier 5 rating on the EMI indicates that a school’s costs can be high while the payoff in the labor market is low. If a low-income student enrolls at a Tier 1 institution, they are more likely to recoup their cost in a shorter timeframe than if they enrolled at a Tier 5 school. One of the most shocking findings in the 2024 data is that Tier 1 (41%) and Tier 5 (35%) have the two highest average enrollments of Pell recipients across quintiles. 

Enrollment in Tier 1 versus Tier 5 institutions can be the difference between low-income students having a positive outcome that leads to economic prosperity or a negative result that saddles them with debt for a degree that does not pay off. This blog uses the 2024 EMI data to highlight the difference in outcomes when a low-income student enrolls in a Tier 1 school rather than a Tier 5 school, spotlighting institutions across the United States. The results show that low-income students' outcomes can vary greatly based on where they enroll, even when it comes to schools in the same city.

The Economic Returns of Attending a Tier 1 vs. Tier 5 University 

California

What if I told you that a 28-minute drive could determine a low-income student’s post-graduation outcomes in San Diego? That’s right, 28 minutes is the distance between the University of California-San Diego and San Diego Christian College, two institutions where about a third of the student body receives a Pell Grant.

If you are a low-income student attending San Diego Christian College, a private non-profit college with 33% Pell enrollment, and graduate within four years, you’ll pay a whopping $141,572.  In comparison, a low-income student can expect to pay $36,220 at the University of California-San Diego, a public university with 32% Pell enrollment. Low-income students at San Diego Christian College can expect to earn $44,252 ten years after enrolling, which is $36,935 less than a graduate from the University of California-San Diego makes on average ($81,187). It will take a low-income student at San Diego Christian College 30 times longer to recoup the cost of their education. This is an example of institutions in the same city with nearly identical Pell enrollment numbers providing completely different student outcomes to economically marginalized students.

New York

Two private non-profit and religiously-affiliated institutions in Buffalo have similar costs and enroll nearly the same percentage of Pell recipients. Still, they produce different outcomes for their low-income students. D’Youville University is a Tier 1 college that will cost low-income students $56,688, assuming they graduate in four years. Just north of D’Youville is Hilbert College, a Tier 5 college that charges its low-income students $6,140 less ($50,548) for their credential. D’Youville enrolls 38% Pell recipients, while Hilbert enrolls a slightly higher 46% Pell students. At face value, Hilbert College seems to be the better option for low-income students based on cost and enrollment alone, but analyzing post-completion outcomes paints a different picture.

A low-income student at Hilbert College can expect to make $38,051 ten years after enrollment. This is only $14 above what a typical high school graduate makes in New York. Conversely, a low-income D’Youville student makes $58,559 ten years after enrollment, or $20,522 more than a high school graduate makes in the state. It would take a low-income D’Youville student a little less than three years to recoup the cost of their education, while a low-income student just down the road at Hilbert will never see a financial return on their degree. 

South Carolina

In South Carolina, two institutions that are seven minutes apart enroll nearly the same percentage of Pell recipients but lead low-income students on different paths toward (or away from) economic mobility. University of South Carolina-Upstate, located in Spartanburg, enrolls 45% Pell recipients. Just down the road is Converse University with a 42% Pell recipient enrollment. University of South Carolina-Upstate, a Tier 1 university, will cost a low-income student $42,308 for a four-year degree, while the same degree from Converse University will cost low-income students $71,524. Low-income students will pay $29,216 more at Converse University and can also expect less of an earnings boost. 

A low-income student at the University of South Carolina-Upstate will make $44,954 ten years after entry. In comparison, a low-income student at Converse University earns $6,774 less ($38,200). It will take a University of South Carolina-Upstate student four years to recoup the costs of their education, while it will take a low-income student at Converse University 19 years (4.7 times longer). This serves as yet another example of how a college choice for low-income students can impact their economic stability.

Illinois 

Two private non-profit institutions in Chicago are likewise close in proximity but worlds apart in outcomes. A 13-minute drive separates North Park University and National Louis University students from having a quicker return on their degrees. North Park University enrolls 44% Pell recipients, while National Louis University enrolls 59% Pell recipients. National Louis University will cost low-income students $55,336, which is $14,344 less than what it costs to attend North Park University ($69,680). National Louis University accepts more low-income students and has a lower cost, but when factoring in financial outcomes, North Park University looks like the better option. 

At North Park University, low-income students can expect to make $55,604 on average after attending. In comparison, National Louis University students will make $41,352, which is $3,646 more than what a typical high school graduate makes in Illinois. While both institutions leave former students with some earnings premium above their high school graduate peers, it will take a low-income student a little over 15 years to recoup the costs of their education at National Louis University in comparison to just four years at North Park University. 

Conclusion 

While this is not an exhaustive list of colleges, this blog highlights how the Economic Mobility Index can help students from low-income backgrounds weigh their college options. College can be a financially risky decision in a student’s life, especially for those who don’t have an abundance of resources to fund their educational experiences. Shockingly, institutions within minutes of one another can have very different outcomes for their students, and enrollment decisions can conscript a low-income student to a cycle of debt and limit their chances of upward mobility. The information provided by the EMI can be used to inform students of the potential outcomes of enrolling at certain universities and ensure that they head to a college that will provide them with the best return on their investment.