Examining Institution-Level Income Distribution and Financial Aid Trends
In a 2019 report, we shared initial findings from a novel effort to compare key statistics on the income distribution of undergraduate populations and financial aid awards from three public sources: the Integrated Postsecondary Education System (IPEDS), Opportunity Insights, and the Common Data Set (CDS). Comparing these data sources across groups of higher education institutions organized by control (public or private) and admissions selectivity, we found that they presented similar income distributions, and that the comparison yielded several new insights on which groups of students were awarded financial aid and how that has changed over time.
One significant drawback to our earlier analysis was that, due to data limitations, we could not report on variation among institutions within those aggregate “selectivity tiers.” In a new report, we are now able to extend the analysis to the institution level, and offer other, more fine-grained insights into the income distribution and financial aid awards at four-year higher education institutions.
Using an imputation strategy, we compare IPEDS and Opportunity Insights data on student income distributions at the institutional level. We find that there is significant variation at the institution level; consistent with our earlier analysis, however, the two sources are most consistent in their reported shares of students with parental incomes under $48,000, and tend to be more consistent for private institutions relative to public institutions and for more-selective institutions relative to less selective institutions. Using more detailed financial aid information from the CDS, we also find that private institutions and more selective institutions are more likely to designate students with parental incomes above $110,000 as having financial need and are much more likely to provide need-based aid to these students. Across all income levels, private and more selective institutions are more likely to provide institutional aid than public and less selective institutions. Indeed, we found concerning gaps in the allotment of need-based aid to students with financial need: at all but the most selective schools, fewer than 50 percent of students with financial need have their need fully met.
These additional findings reinforce the usefulness of cross-dataset analyses in addressing important higher education policy questions. At the same time, significant gaps remain–supplementing existing public datasets with a comprehensive, longitudinal student record data system must still be a national priority.