Message from the Chair
Education: The Road to the American Dream

A few months ago, I had the opportunity to attend a Symposium in Boston where one of the guest speakers provocatively questioned the existence of the American Dream. (How dare she.) She clicked off a battery of staggering educational statistics, clearly placing blame on a history of Presidents and ultimately the entire U.S. Government. Her speech, as intended, caused me great consternation and clearly, to those around me, offended my conservative patriotism. Since I am not one to sweep anything under the rug, I delicately emailed the President of the company holding the Symposium and gave him another viewpoint. While that event occurred a few months ago, we have been in a dialogue via email ever since with no end in sight. His liberal view, very simply, is that the American Dream is no longer attainable and the United States is failing in its educational goals. My conservative view is that the American Dream is quintessentially American and that we have hope of advancing our educational system through hard work and individual effort. However, in order to discuss this subject intelligently with him, I had to do some research and here is what I found.

First, let me note there are two halves to the American Dream. One half (liberal) is that America is the land of social mobility. We are not a land that values rigid hierarchies as the Europeans do. Social mobility comes through government intercession. The other half (conservative) is that individual Americans rise and fall on their own effort, with no guarantee of even minimal levels of success. And that merit should be rewarded. On to what I found….

1) Education is central to the American Dream. It is the means by which ascendance is possible, more so today than ever before in our nation’s history. We all know that with education comes employment opportunities and higher earnings. The greater the income, the more opportunity there is to pursue dreams. In 2004, the median annual household income was roughly $37,000 for those with a high school degree, $69,000 for those with a bachelor’s degree, and $100,000 for those with a professional degree. Students with a bachelor’s degree will earn roughly one million dollars more in a lifetime than students with only a high school education. Those are staggering statistics. Now, couple those statistics with Tom Mortenson’s research which show that roughly one in two students (50%) from families making more than $90,000 obtain a bachelor’s degree by the age of 24, compared with one in 17 students (5.8%) from low income families earning less than $35,000, and we have an American formula for a growing class differential. We saw this clearly play out in the outcome of Hurricane Katrina.

2) This leads me to my second observation: The American higher education system is strikingly out of touch with the American Dream because it is so disappointingly stratified. As I did my research, I found that the issue of stratification can be most clearly seen at selective colleges and universities, those which offer the greatest chance for achieving the American Dream. Research shows that students at selective colleges are more likely to graduate and more likely to pursue graduate degrees. Yet, increasingly and despite special financing programs, the most selective institutions educate the fewest low-income students. A study conducted by Anthony Carneval in 2004 found that at the most selective 146 colleges and universities, 74% of students come from the highest socioeconomic quartile and just 3% come from the lowest quartile. We are educating our rich and middle class but not our poor.

3) My third observation is that while the American Dream may be struggling, the American public believes strongly in the American Dream and many institutions and political figures are taking notice. (Ah, there IS hope.) Educational Testing Service (ETS) recently conducted a poll that shows Americans are deeply invested in the notion that higher education is a ticket to opportunity and that students should be judged by merit and achievements in light of whether one worked hard to overcome obstacles—a combination of both liberal and conservative views. Americans supported preferences for low-income or economically disadvantaged students from all races. These preferences for low-income students are in accordance with the American Dream because it promotes social mobility by rewarding students who have overcome demonstrable obstacles. A 1200 SAT score definitely means more for a low-income, first generation student than for a student whose parents have advanced degrees. In addition, many institutions are developing financial aid strategies to assist low-income students in obtaining a post-secondary degree. Most of the conferences we attend are now focusing on how we can reach those populations who historically have been ignored. We are starting to think outside our own silos by combining admissions policies with financial aid policies.

So what has all this research taught me? Well, it certainly doesn’t answer the question of how America fares in comparison with the rest of the world. I haven’t researched that yet. And it certainly does not end the discussion of the American Dream. Thankfully! What is does is tell me that there is hope in achieving our goals. While there are large changes that need to be made, the American Dream is not dead or even close to dying. (So take that, Symposium guest speaker.) The best lesson is the real beauty of it all is we selected careers which help in moving the American Dream forward. All of us, whether you work for a lender, a guarantee agency, or an institution of higher education, are assisting in the promotion of the American Dream. We need to continue to educate our public.