Lower-Income Communities Shoulder $35 Billion in Student Loan Debt But See Little Benefit from ‘Excelsior Scholarships,’ New Data Reveal

The Education Trust–New York Applauds Tuition-Free Plan for Advancing a College-Going Culture for All New York Students, While Calling for Expanding Focus on Access, Affordability and Completion

NEW YORK – As New York leaders work to finalize the state budget including Governor Cuomo’s landmark tuition-free degree proposal for middle-class families, a policy brief released by The Education Trust–New York reveals that college remains out of reach for lower-income families who would likely not benefit from the Excelsior Scholarship proposal.

According to new data provided by the New York Fed, New York State communities with average income under $50,000 owe a cumulative $35 billion in student loan debt and represent nearly half — 45 percent — of the state’s student loan borrowers. In communities with average income under $30,000, the average borrower owes more than $25,000 in student loan debt — a staggering percentage of their income — and faces a delinquency rate of 15 percent. Yet according to The Education Trust–New York’s analysis, the average student in this income range would receive no additional financial aid under the proposed Excelsior Scholarships while still facing thousands of dollars in college costs beyond tuition.

“Thanks to the focus that the governor’s proposal has brought to the college affordability crisis, New York has a powerful opportunity to address college access, affordability and completion for low- and middle-income students alike,” said Ian Rosenblum, Executive Director of The Education Trust–New York. “But to ensure that New York does not leave behind the very students who are most depending on higher education as a pathway to economic security, the state should strengthen the Excelsior Scholarship proposal by providing additional help for low-income families to afford college and by helping students successfully make it through college so they earn a degree.”

To lead the nation in college affordability and student success, The Education Trust–New York outlined four steps that would strengthen the Excelsior Scholarship proposal:

1. Make college more affordable for low-income students as well as middle-class students, such as by increasing the value of the maximum Tuition Assistance Program (TAP) award and expanding income eligibility so that more students receive the maximum TAP award, which could ensure that lower-income students receive needed help to improve college affordability.
2. Provide additional resources to support non-traditional college students like part-time students who cannot afford to give up their jobs or undocumented students who are not currently eligible for financial aid grant programs. Any college affordability initiative should ensure that these groups of students receive equitable access to financial aid.
3. Ensure commensurate urgency and emphasis on student success — not just access — by holding institutions accountable for on-time graduation rates and investing in institutional capacity to support practices that improve completion. Even for full-time students, the chance of graduating from a four-year program within six years ranges from 11 percent to 81 percent depending on the SUNY or CUNY campus and the chance of graduating from a two-year program within three years ranges from 11 percent to 32 percent depending on the campus.
4. Enhance the focus on equity by encouraging high-performing colleges to enroll more low-income students, ensuring equitable levels of per-student funding for the institutions that serve the most low-income students and students with the greatest needs, and encouraging — and funding — implementation of the programs most likely to improve student outcomes.

The Excelsior Scholarship could help improve the perception of college affordability, which can itself be a barrier to access, and foster a college-going culture by giving parents and students hope that a postsecondary education is within reach.

But as the policy brief states, the Excelsior Scholarship is limited in helping lower-income students with financial support because the proposal only applies to tuition, which represents an average of just 29 to 36 percent of total college costs at SUNY and CUNY, and because it only covers tuition after other sources of aid have been exhausted. As a result, the proposal to make SUNY and CUNY tuition-free for families earning up to $125,000 would not provide more assistance to the average student with a household income up to at least $48,000 who receives federal and state scholarships and grants, shutting out many low-income students and, disproportionately, students of color.

The policy brief is available at this link.

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About The Education Trust–New York:
The Education Trust–New York works to eliminate the gaps in equity, opportunity, and achievement that hold back too many students from reaching their full potential, especially those who are low-income or students of color, in order to enable all students in New York state to achieve at high levels — from early childhood through college completion.  Learn more at www.EdTrustNY.org.