An article from ‘Moving in the right direction’: The push by wealthy institutions to enroll more low-income students

Pell Grant recipients at colleges with the largest endowments increased nearly 5 percentage points since 2007, per a recent Brookings Institution analysis.

Published March 28, 2025 By Lilah Burke

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Wealthy colleges have long faced criticism for catering to high-income students while under-enrolling low-income ones. But recent research from the Brookings Institution shows that wealthy private colleges have indeed made progress in enrolling low-income students at higher rates. 

At private colleges with large endowments, the share of students who are receiving federal Pell Grants rose from around 12% in the 2007-08 academic year to above 16.8% in 2022-23. Some of that is likely due to greater outreach and intention from colleges, said Phillip Levine, a senior economics fellow at Brookings and author of the analysis.

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“It would be great to see further progress,” said Levine, who is also an economics professor at Wellesley College. “But they definitely are moving in the right direction in terms of increasing access to lower-income students on their campuses.”

Levine split the 76 private institutions with large endowments into two groups. The 38 colleges with “very large endowments” of more than $500,000 per student include Wellesley, Princeton University, the University of Chicago, and Reed College. The remaining institutions with “large endowments” — $250,000 to $500,000 per student — includes Columbia University, Colorado College and St. Olaf College.

Such substantial endowments, Levine said, give private colleges the resources to enroll and support low-income students. And because those institutions historically haven't paid taxes under the understanding that they provide a public service, it’s important to examine their willingness to serve those students, he said. 

Levine also focused his research on wealthy institutions because they're being targeted by legislative proposals to raise the federal endowment tax. The Tax Cuts and Jobs Act of 2017 established an endowment tax equaling 1.4% of investment returns on colleges with funds larger than $500,000 per student. Republicans in Congress have proposed raising the tax to 14% or more for those same colleges. 

“Economic opportunity is something that they have the ability to offer,” Levine said of colleges. “To the greater extent that they are able to do that, the less justification there should be for taxing their investment returns.”

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The rise in the number of Pell-receiving students at these wealthy colleges was not steady over the years examined. There was a quick rise in their numbers just following the 2008 financial crisis, due in part to a drop in income among the population of people attending college, Levine said. Congress also changed the formula that determines Pell eligibility, making more families eligible. 

But since the 2014 academic year, the share of Pell-receiving students has risen gradually at colleges with very large endowments. 

When determining the reason behind that trend, Levine was able to eliminate economic conditions and changes in Pell eligibility as factors. Both remained mostly stable in that period, although the COVID-19 recession did provide a small blip. 

Test scores at wealthy colleges also remained stable over time, for both Pell-receiving students and their wealthier peers, suggesting the institutions had not lowered their admissions standards. 

Taken together, those trends suggest more students receiving Pell grants applied to wealthy institutions or decided to enroll at them once accepted, Levine said. 

Some of that is likely due to action on the part of colleges. Some institutions expanded their financial aid offerings or reduced their net prices. 

There were also other organizations that may have played a role in increasing low-income students at wealthier institutions. Independent nonprofits that help advise students, including uAspire and the College Advising Corps, expanded their operations.

Other nonprofits partner specifically with colleges to connect them with low-income students. Those include QuestBridge and Posse. 

Although there is still progress to be made, Levine said, wealthy colleges have overall improved the social mobility they’re offering. 

“Regardless of political affiliation, I think pretty much everybody believes in economic opportunity,” Levine said. “These institutions provide that.” 

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