By Richard Vedder
Tom Mortenson's Postsecondary Education Opportunity outfit does the higher education community a service by publishing great and detailed data. We at CCAP subscribe and enjoy their newsletter and colorful posters.
Having said this, I am saddened by the unjust inflammatory rhetoric in the October 2006 newsletter: "The ugly racism evident in the current financial aid system of the United States cannot be denied....The current system is racist." Startled by this comment, I carefully looked at their data. In 2004, for full-year students with one institutional affiliation who are dependents, the average grant made to whites was $3,375, while the average grant to blacks was $5,321, nearly 58 percent more. Total financial aid for whites was $7,259, compared with the 42 percent higher figure of $10,325 for blacks.
You might logically say that whites have higher incomes than blacks, so if aid is need-based, more should go to blacks. I agree. However, if one confines the analysis to only low income students (in the bottom one-fourth of the income distribution), we see the average black student still receives almost $2,000 (21-22 percent) more aid than the average white. Controlling for income, blacks are significantly favored relative to whites --perhaps reverse racism, if you will.
To be sure, because blacks on average are significantly poorer than whites (for reasons far divorced from student financial aid considerations), the parental contribution to their children's higher education is greater in percentage terms, although a good deal smaller in absolute dollars. While whites on average use financial assistance to partly reduce family financial contributions from the maximum bearable, blacks need every penny to pay the bills (and a bit more beside). Is this racism in financial aid? I think not. If anything, the data suggest that there is a sizable preferential treatment towards blacks after controlling for income. Calling our financial aid system "racist" is an unjustified slur, the worst form of race-based rhetoric. One can argue that "we should do more to meet the financial needs of minorities," but to imply that the nation is biased against minorities in college financial aid decisions is unfair and simply incorrect. It is purple prose that implies people running these programs are prejudiced and insensitive, and does nothing to resolve issues of access. Blacks have a harder time paying their college bills because they are poor, which is not the fault of the college financial aid system.
If one wanted to build a case of discriminatory treatment based on race, it is interesting to compare blacks and Hispanics. Average parental income is similar for the two groups (Hispanic income is less than four percent higher), but blacks receive on average more than 28 percent larger average grants. Although it is politically incorrect to say, I suspect colleges, wanting to demonstrate their purity and fairness in race matters, go out of their way to favor blacks over Hispanics. (Blacks historically have been politically more powerful and assertive in matters of affirmative action). Hispanics are relatively neglected -- total financial aid per student for poor Hispanics is less than for poor whites (perhaps the best evidence there is for conventionally defined racism).
It is interesting, also, that Hispanics and particularly Asians are reluctant to borrow. Asians on average attend the most costly schools (more so even that whites), but receive only about the same total financial aid as whites who average higher incomes. However, for every one dollar in grants, blacks on average borrow an additional 69 cents, whites an additional 78 cents, but Asians borrow less than 45 cents. Asians attend expensive schools and are reluctant to borrow, so their "unmet financial aid" is perhaps less of a critical access problem than for other groups.
If I had my way, it would be illegal to collect race data on students-- period. And I am saddened that postsecondary.org chooses to play the race card in its campaign to increase access and affordability.