Raised in poverty? Your college degree is worth less

It is axiomatic that college graduates earn on average more money than those students who don’t go to college, and, so, kids from low-income families can climb out of poverty through higher education. But two new reports show that a college degree isn’t worth as much — at least when it comes to wages — to students who grew up in poor families.

A report from the nonprofit Brookings Institution by Brad Hershbein finds that there is a smaller “bachelor’s bump” in wages for kids who grew up in poverty than for kids coming from better-off families. This isn’t the first time we’ve heard this; as veteran teacher Peter Greene notes on his Curmudgucation blog, but it is a report worth noting again. The notion that education by itself can break the poverty cycle is flawed, just as is the related idea that school reforms can be successful by ignoring the conditions in which kids live and attend school.

The report says:

“If you are among the fortunate few who grow up poor and manage to earn a bachelor’s degree, you might reasonably expect your earnings potential to rise by the same proportion as that of other people who earn a bachelor’s degree. Your actual level of earnings may not match others, but the percentage increase, relative to a high school diploma, ought to be comparable. This is certainly the case in terms of gender and race. Many economists assume this pattern holds for those from different backgrounds in terms of income, too.”

“But it turns out that the proportional increase for those who grew up poor is much less than for those who did not. College graduates from families with an income below 185 percent of the federal poverty level (the eligibility threshold for the federal assisted lunch program) earn 91 percent more over their careers than high school graduates from the same income group. By comparison, college graduates from families with incomes above 185 percent of the FPL earned 162 percent more over their careers (between the ages of 25 and 62) than those with just a high school diploma.”

Why is this the case? The report has no definitive answer to that question but mentions a number of possibilities, “from family resources during childhood and the place where one grew up, to the colleges that low-income students attend.” Hershbein wrote that he and his colleagues are investigating the factors behind their findings.

A different report, this one out of Georgetown University’s Center on Education and the Workforce, finds that even while more African Americans are going to college than in the past, they are overrepresented in majors that lead to low-paying jobs. Again, this isn’t new, but it is continuing. The report says that while African Americans are 12 percent of the U.S. population, they account for 7 percent of the high-paying STEM majors in science, technology, engineering and math and are underrepresented in health and business majors as well. Even in health, where African Americans constitute about 10 percent of all majors, they are largely found in health and medical administrative services, the lowest-earning major in the field.

Only six percent of African Americans who graduated from college got a degree in the major with the highest median earnings — $84,000 — in pharmacy and pharmaceutical sciences. Twenty percent earned a major with the second lowest median earnings — $39,000 in in human services and community organization.