Dive Brief:

• Public colleges that primarily grant bachelor's degrees offer low-income students the greatest median return on their investment compared to other institution types, according to a new report from Georgetown University's Center on Education and the Workforce. 
• However, the top two dozen colleges that give low-income students the greatest ROI are all private colleges, led by Georgetown, Stanford and Harvard universities. Yet these selective universities enroll few low-income students.
• For-profit colleges tend to offer the lowest ROI to low-income students. The report notes a couple of exceptions, though they generally have very small student bodies and specialize in highly technical skills.

Dive Insight: 

The Georgetown CEW report sheds light on which types of institutions provide the greatest returns at a time when the public is increasingly skeptical about higher education's value. Its findings also could add fuel to arguments for greater regulation of the for-profit college sector, which the Biden administration has pledged to crack down on. 

Low-income students have median returns of $756,000 across all degree levels, which falls below the median of $822,000 for all students, according to the report. The researchers calculated ROI as the median net present value, which is students' expected 40-year earnings minus their college costs. Low-income students' smaller returns occur across all institution types and credential levels. 

Several factors drive the disparities. For one, low-income students have lower graduation rates than other students. These students are also more likely to pursue credentials that offer a smaller return on investment, such as certificates and associate degrees. And people from low-income families tend to earn less in adulthood than others.

Public institutions and private nonprofit colleges offer low-income students seeking bachelor's degrees the greatest median returns, $951,000 and $863,000 respectively, the report found. This compares to a median return of $763,000 at four-year for-profit institutions for low-income students.

Overall, bachelor's degree students see a median return of $1 million at public colleges, $967,000 at private nonprofits and $966,000 at for-profits. 

The report found selective private institutions tend to offer some of the best returns for low-income students. The top 10 private nonprofits that provided these learners with the greatest returns all showed ROIs exceeding $2.5 million, according to the report. 

But these colleges — which include Ivy League schools and other top-ranked institutions such as the Massachusetts Institute of Technology — enroll few low-income students. Pell Grant students made up less than one-fifth of the student population at all but one of the top 10 private nonprofits. In comparison, half of the colleges in the top 10 four-year publics had shares of Pell Grant students exceeding 20% of their campus population.  

Some selective private institutions have recently been accused of engaging in a price-fixing scheme that's driven up the cost of education. A group of former students is suing 16 top-ranked private universities, including Yale and Georgetown universities, saying they illegally work together in a way that limits student aid packages. 

For the Georgetown report, researchers compiled a list of the four-year colleges that do the best job of serving low-income students by considering three factors: the percentage of their students who received Pell Grants, the graduation rates of those students, and the percentile rank of those students' projected 40-year earnings. 

While for-profit colleges tend to give low-income students some of the lowest returns, the report did find exceptions. 

Two for-profit colleges — the Neumont College of Computer Science in Utah and the SAE Expression College in California — topped the list. Even so, these schools only enrolled about 700 students combined in fall 2020, federal data shows. 

The top 20 overall is rounded out by mostly large public universities. They include seven University of California campuses and four California State University campuses, which together enrolled more than 350,000 students in fall 2020, according to federal data. 

Georgetown researchers used data from the College Scorecard released in December 2020 to compile the report. They only included institutions that reported the net price of college costs and low-income students' average earnings at six and 10 years after their attendance.