Policy Recommendations Suggest How Colleges, Educators, Policymakers Can Increase Earnings for Students from Low-Income Families
IOWA CITY, Iowa—Students from low-income families who attend elite colleges see, on average, higher future earnings than their peers at less selective schools. The problem? Many high-achieving students from low-income families are not attending high-performing schools and thus missing out on income-increasing benefits. 
A new research brief by ACT, informed by Opportunity Insights’ latest research, offers ACT’s recommendations for how colleges can increase intergenerational mobility—the change in socioeconomic status between generations—to reduce income segregation and narrow the intergenerational mobility gap.
“As we continue our fight for fairness in education, we’re delighted to work with organizations like Opportunity Insights to share life-changing research and policy recommendations,” said Vice President of ACT’s Center for Equity in Learning, Tina Gridiron. “We hope our fellow education advocates and stakeholders carefully consider this research and these recommendations so together we can make upward mobility attainable for the next generation of learners from low-income households.”
Research conducted by Opportunity Insights using a variety of records, including ACT/SAT scores for students and their parents, found that reducing income segregation at selective colleges would increase intergenerational mobility.
The research found that only 3.8 percent of students attending Ivy-Plus colleges were from the bottom quintile (i.e., the bottom twenty percent) of family incomes, compared to 14.5 percent from the top one percent of family incomes.
Opportunity Insights investigated whether evenly distributing students across college tiers by college admission scores would close the gap between income quintiles. The researchers discovered that while evenly distributing students by ACT/SAT score across selectivity tiers (instead of overrepresenting students from high-income families and underrepresenting high-achieving students from low-income families) would lessen the gap, it would not fully remedy this problem. Because an estimated 36.1 percent of income segregation is caused by systemic inequities in education and society at large, students from low-income backgrounds tend to achieve, on average, lower ACT scores.
Researchers found that giving students in lower income quintiles a preference in admissions (similar to preferences currently granted for legacy status or athletics at many institutions) would dramatically increase opportunities for students from low-income families. By granting a preference for students from low-income backgrounds equivalent to three to five additional points on their ACT Composite score, the intergenerational mobility gap would narrow from 22 to 15.5 percent.
ACT has policy recommendations for colleges and universities, and K-12 educators and policymakers to effectively use this information:
- Colleges and universities should look at test scores as one piece of a holistic admissions portfolio. They are encouraged to use scores to identify those who need more support, to increase retention and graduation rates.
- K-12 educators and policymakers should seek to improve educational opportunities for students from low-income backgrounds, encourage high-achieving students to attend more selective schools, and promote college applications and a college-going culture for students from low-income families.
The current brief is accessible here as is the full report from Opportunity Insights.
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About ACT
ACT is a mission-driven, nonprofit organization dedicated to helping people achieve education and workplace success. Headquartered in Iowa City, Iowa, ACT is trusted as a national leader in college and career readiness, providing high-quality assessments grounded in over 60 years of research. ACT offers a uniquely integrated set of solutions designed to provide personalized insights that help individuals succeed from elementary school through career. Visit us online at www.act.org/
ACT’s Center for Equity in Learning focuses on closing gaps in equity, opportunity, and achievement for underserved populations and working learners. Through purposeful investments, employee engagement, and thoughtful advocacy efforts, the Center supports innovative partnerships, actionable research, initiatives, campaigns, and programs to further ACT’s mission of helping people achieve education and workplace success. https://equityinlearning.act.org/