More Kentuckians are getting college degrees, but a troubling trend has emerged in who receives them.
According to a new report, the gap between graduation rates for low-income college students and moderate- to high-income students jumped 8 percentage points between 2008 and 2010.
In those two years, the graduation rate of low-income Kentucky students fell from 46 percent to 35 percent, according to an annual accountability report from the Council on Postsecondary Education. In comparison, the graduation rate of moderate- to high-income students dropped four percentage points, from 57 percent to 53 percent.
The gap between graduation rates for rich and poor students increased from 10 percentage points to 18.
The gap is connected to a bad economy, higher tuition rates and less state aid, and it's a big problem, according to one expert on the economy and higher education.
"The biggest challenge we have in higher education is getting more low-income, low-skilled people into the system. We have a huge gap and we're not putting resources into that gap," said Jason Bailey, executive director of the Kentucky Center for Economic Policy. "These are the people hit hardest by tuition increases, but we're cutting state financial aid programs."
Most state universities increased tuition for the fall semester between 3 and 5 percent to contend with a $62 million cut in state funding over the next two years. Over the past decade, the University of Kentucky has increased tuition by 147 percent.
On top of that, state aid for low-income college students is estimated to be underfunded by $100 million, according to the Kentucky Higher Education Assistance Authority. Last year, 90,424 eligible students were turned down for that aid, up from 68,259 in 2008.
The numbers in Kentucky's graduation income gap is a new part of the council's annual accountability report, which measures the state's higher education system using a wide range of statistics and sets future goals.
The new indicators measure the gaps between graduation rates based on income, student readiness and race. The gap between minorities and non-minorities is the only area to improve. The graduation rate for minorities increased from 33 percent to 36 percent, compared to an increase from 48.4 percent to 49.7 percent for non-minorities.
The new indicators were included in the report because "we realized that we need to be successful with all of our students," said John Hayek, the council's senior vice-president for budget, policy and planning.
Hayek said individual campuses are trying to focus on closing the gaps by improving counseling and other student services.
Overall, more Kentucky students are graduating from college. In the past five years, there's been a 24 percent increase in the number of degrees and credentials received by community college and university students. The biggest jump is in associate's degrees, about 23 percent, followed by an 11 percent increase in the number of students who receive four-year degrees.
However, the report shows that the college-going rate of high school graduates has stayed steady over the past two years, hovering near 67 percent.
State Rep. Carl Rollins, chairman of the House Education Committee, said he continues to be concerned about the economy and higher education.
"There's a lot of research that shows that low-income students are less willing to take on debt, so with tuition continuing to increase, low-income students won't go to college; they'll just delay it," said Rollins, D-Midway. "And if they delay it, they probably won't go."
The average Kentucky student now graduates with $19,000 in student debt, a rate that has grown four times faster than the state's gross domestic product.
"If we have students who are qualified and could succeed and we don't get them there, and get them through college, then 20 years down the road, we won't have much of a resource," Rollins said. "Everybody needs to get as much education as we possibly can."
In the last legislative session, the council tried to attach $20 million in funding to how well public universities meet goals for graduation, but the funding wasn't approved.
Hayek said that schools have financial incentives to retain and graduate more students because they will receive more tuition dollars and bigger alumni bases.
Bailey, who serves on a new tax-reform commission, said the issue boils down to the need for more tax revenue to help more Kentuckians get more education.
"It affects the economic vitality of all of us," he said. "That's really why Kentucky hasn't done well: We have not invested properly in a vast majority of the populace. It's worse when we don't support higher education."
Linda Blackford: (859) 231-1359. Twitter: @lbblackford.