As I continue to reflect on the differences between private and public colleges and universities, I thought it would be interesting to look at the admissions and financial aid practices at historically black colleges and universities (HBCUs).

HBCUs have served a higher percentage of lower income students than the elite colleges and universities that I previously covered. I used College Navigator to see if any notable findings or differences surfaced for this group of colleges versus the first two groups.

I located a list of 107 HCBUs and reduced it to 97 by removing schools that taught only graduate students and schools that did not participate in Federal Student Aid programs.

**Profiles of the HBCUs Selected**

In Table 1 below, I listed the institutions (97), the state in which the institutions are located, total and undergraduate enrollment, cost of attendance stats, as well as the percentage of undergraduate applicants admitted. The list was sorted from highest total enrollment to lowest. Total enrollment ranges from a high of 13,487 students at North Carolina A&T University to a low of 53 at American Baptist University in Nashville. The same two schools bookend undergraduate enrollment as well.

The 97 schools are split between 51 private non-profits and 46 public non-profits. This triggered the need for an additional column to record tuition as either In-state or Out-of-state. Private college tuition was input in the In-state column. In-state tuition ranged from a high of $31,050 at Howard University (private in DC) to a low of $3,353 at Coahoma Community College (public in MS). Out-of-state tuition ranged from a high of $26,874 at Prairie View A&M (TX) to a low of $6,800 at Hinds County Community College (MS). It’s important to note that all of these published prices are much lower than tuition at the elite private colleges and universities.

There was not much of a gap between the mean and median cost of attendance (COA) for either the In-state public and private colleges ($26,308 mean and $25,280 median) or Out-of-state for public colleges ($30,477 mean and $31,481 median). However, the In-state COA ranged from a high of $51,450 (Howard University-private) to a low of $10,673 (Coahoma – public community college). Out-of-state COA ranged from a high of $42,430 (Prairie View A&M) to a low of $15,200 (Hinds County Community College).

Admissions selectivity was different. The mean acceptance rate was 80% with a median acceptance rate of 85%. The high was 100% representing open enrollment (too many to list) and the low was 25% (Johnson C. Smith – NC).

**Funding Sources for Undergraduates**

In Table 2 below, the percentage of costs of attendance funded by cash, grants, Pell grants, and federal loans are listed. The percentage of students who receive no aid is quite low with a mean of 5% and a median of 3%. The high is 34% at Texas College and there are many schools with 0% no-aid students. This compares to a mean of 32% for all students attending non-Ivy Plus schools.

The mean percentage of grants is 81% with a median of 83%. There are 17 schools that provide grants to 100% of undergraduates. St. Phillips College in San Antonio, TX is the lowest with only 25% of undergrads receiving grants.

The mean percentage of students receiving Pell grants is 59% and the median is 60%. There are six colleges with 90% or more of students receiving Pell grants. Talladega College has the highest percentage at 95%. The lowest percentage of students receiving Pell grants is 10% at Morris Brown College.

Only federal loans are tracked by College Navigator. The mean percentage of students receiving federal loans is 53% and the median is 58%. There are five colleges with 90% or more of students receiving federal loans. Livingstone College has the highest percentage at 97%. There are nine colleges where no students receive federal loans. This is not surprising given that almost all of them are community colleges with low costs of attendance.

**Grants Awarded to Students**

Table 3 below illustrates the numbers and percentages of students who receive grants, the average dollar amount of those grants and the total dollar value of grants awarded by each institution.

The mean and median total value of grants awarded by institution vary widely from $22,527,357 for the mean to $13,218,306 for the median. However, that difference in total value is highly related to total undergraduates as the mean average grant is $10,682 versus the median average grant of $10,501. The high average grant is $20,762 awarded by Howard University. The low average grant is $2,415 awarded by Central State University (OH).

On a comparative basis, the tuition and cost of attendance at HBCUs is not only lower than elite colleges and universities, but the mean and median grant values are lower as well. The mean cost of attendance at HBCUs was $26,308 for in-state and $30,477 for out-of-state institutions. The mean cost of attendance for elite, private institutions other than Ivy Plus was $80,705. The mean grant value for non-Ivy Plus elites was $44,402. On an average basis, grants cover 41% of the COA for In-state/private HBCUs, while grants cover 55% of the COA for non-Ivy Plus elite institutions.

**Students Receiving Pell grants**

Table 4 provides an overview of the number and percentage of students at each institution receiving Pell grants, the total value of Pell grants received at the institution as well as the average dollar value of each Pell grant.

The mean percentage of students receiving Pell grants is 59% and the median percentage of students receiving Pell grants is 60%. This compares to a mean of 16% and a median of 15% of students receiving Pell grants at the non-Ivy Plus elite colleges.

Talladega College (AL) has the highest percentage of students receiving Pell grants (95%). Morris

Brown College (GA) has the lowest percentage of students receiving Pell grants (10%). Because Pell grants are capped, the mean ($5,078) and median ($5,221) values are similar. Stillman College has the highest mean Pell grant at $6,586 and Denmark Technical College has the lowest mean Pell grant at $2,465.

**Students Receiving Loans**

Table 5 provides data on the total number of students receiving federal loans, the percentage of students receiving federal loans, and the average loan amount. There are nine colleges (mostly community colleges) that do not participate in the federal loan programs.

The mean and median loan amounts are $6,147 and $6,598. The mean percentage of students with loans is 53%. The mean loan value represents approximately 23% of the mean cost of attendance. This data compares with the mean percentage of students who borrow (25%) at non-Ivy Plus institutions. The mean loan value at non-Ivy Plus institutions is $5,492 which is less than the HBCU mean and is 6.8% of the mean cost of attendance. Clearly, the 32% mean of students with no aid at the non-Ivy Plus colleges versus 3% mean of students with non-aid at HBCUs makes a difference in funding percentages from other sources, particularly loans.

**Net Prices By Family Income Quintiles**

Table 6 below displays net price data organized by quintiles of family income. This table is my most interesting table in all three of the articles that I have written about financial aid as awarded by type of colleges.

As a non-financial aid administrator, it seems to me to be natural that the average net price should increase from the lowest income quintile to the highest income quintile. I’ve already observed that’s not what occurs. In the Ivy Plus article, about half of the 12 universities showed a low to higher progression of net price as income quintile ranges increased.

In the Elite Private College article, 37 of the 66 colleges and universities showed a low to higher progression of net price as income quintile ranges increased. On the other hand, there appeared to be a widely different philosophy about how low to start the net price with a low of $0 and a high of $25,761 in the net price for the $0-$30,000 range.

With the HBCUs listed in Table 6 below, 52 of the 97 colleges and universities showed a low to higher progression of net price as income quintile ranges increased. Like the elite colleges and universities, there appeared to be a very different philosophy or strategy about at what amount to begin the net price starting point for the lowest quintile.

In fact, the lowest quintile mean was $13,729 and the median was $12,796. The highest starting point was $41,343 and the lowest was $781. I have made an educated guess that the HBCUs have a higher net price for the lowest income quintile because they are planning for students to use a $5,000 Pell grant and a $7-8,000 loan to cover the net price. I’m hoping that one of my financial aid experts will confirm my guess or provide another answer.

Looking back at the lowest quintile mean for the elite colleges and universities, the mean was $10,284 and the median was $10,197. The high was $25,761 and the low was $0. The same guess of a $5,000 Pell grant and a $5,200 loan could be applied here. Again, I don’t have another explanation.

Diving into statistics like this often leads me to question the validity of some of the numbers despite the penalties for submitting incorrect numbers. Howard University is the source for the highest mean net price for the lowest quintile of $41,343. At the same time, Howard University’s average net price is $28,279. That is impossible when the five quartiles range from $41,343 to $48,186 because its COA is $51,450.

I have a few friends who are enrollment management experts and several who are financial aid experts. I’ve reached out to all of them in hopes of finding explanations for the variation in net prices since at least half the institutions in all three analyses follow a pathway different than what the logic indicates.

**Conclusion**

It is evident that the wealthiest institutions have the greatest flexibility in pricing to attract full-pay students as well as the smartest students whose family cannot afford to pay the cost of attendance. The mean percentages of full-pay students in this three-part analysis are:

Ivy Plus – 38%

Elite Colleges – 32%

HBCUs – 5%

The mean costs of attendance for these groupings of colleges and universities are:

Ivy Plus – $83,601

Elite Colleges – $80,705

HBCUs – $26,308

The mean grants value per student for these groupings of colleges and universities are:

Ivy Plus – $52,900

Elite Colleges – $44,402

HBCUs – $10,682

The mean grants as a percentage of the mean cost of attendance for these groups are:

Ivy Plus – 63%

Elite Colleges – 55%

HBCUs – 35%

Because of a very low annual cap, the mean Pell grant values per student for these groupings are similar at:

Ivy Plus – $5,128

Elite Colleges – $5,050

HBCUs – $5,078

The percentages of cost of attendance that the mean Pell grants cover for these institutions are:

Ivy Plus – 6%

Elite Colleges – 6%

HBCUs – 19%

The mean annual federal loan amounts per student for these groupings are:

Ivy Plus – $6,165

Elite Colleges – $5,492

HBCUs – $6,147

The percentages of cost of attendance that the mean annual federal loans cover are:

Ivy Plus – 7%

Elite Colleges – 7%

HBCUs – 23%

It’s impossible to apply average grants, Pell grants, and loan values to determine the average dollars paid by a student at either of these groups of colleges and universities, particularly for Ivy Plus and Elite Colleges that have approximately 30-40% full-pay students.

The lower percentages of full-pay students constrain HBCUs from raising prices to create an economic subsidy from wealthy students. That’s evident by their lower tuition and cost of attendance as well as their lower average institutional grants.

While it’s easy to recognize that the business models of Ivy Plus and Elite Colleges are different than the business models of HBCUs, they’re also different from the business models of public colleges and universities. If the percentage of full pay students at Ivy Plus and Elite Colleges were 5 percent like the HBCUs, their business models would change, but probably not as much as tuition dependent or low endowment colleges and universities.

Private non-profit colleges and universities receive subsidies from the government in the form of exemption from income taxes and property taxes. Their donors also receive tax deductions for donating money and securities. Private colleges and universities do not receive tuition subsidies like public colleges and universities.

Pricing tuition levels for private colleges and universities is an economic decision influenced by their assessment of their ability to attract students who can pay tuition at that level or their ability to pay a net price influenced by tuition discounts in the form of institutional grants. The Ivy Plus and other elite colleges and universities have a high brand awareness attracting many more times the number of applicants than admission slots available.

Increasing enrollments at elite institutions may not be possible for many reasons including no excess capacity in classrooms, no excess capacity in dormitories, and a recognition that any incremental students the institution may attract are unable to pay the full cost of attendance. Most higher education business models are complicated with multiple sources of income offsetting many different expenses.

With the Supreme Court decision on affirmative action leading to calls for elite institutions to drop their legacy preferences in admissions, my assumption is that changing those policies won’t force the institution to change their business model. If they drop their legacy policies, my assumption is that those institutions that do so believe they can continue to maintain the same percentage of full-pay students without legacy admissions.