The United States is home to 106 historically black colleges and universities (HBCUs), institutions created to educate black students in the eras of slavery and Jim Crow. Most HBCUs continue to serve majority-black student bodies although they are open to applicants of all races. In addition to HBCUs, Hispanic-Serving Institutions (HSIs) represent another category of minority-serving institution. HSIs, which number in the hundreds, have student bodies that are at least 25% Latino and typically serve low-income students.

Minority-serving institutions often fare poorly on measures of student outcomes. For example, on the Forbes list of the “25 Colleges with the Worst Return On Investment,” 7 of the 25 schools listed are HBCUs. Additionally, a report from the University of Pennsylvania found that only 30% of students at HBCUs graduated in six years, well below the average of 55% for students of all races and slightly below the average of 37.5% for black students at all U.S. colleges. A white paper from the College Board reports that the average six-year graduation rate for students at HSIs was 35% in 2008 compared to a national average of 40% for Latino students at all colleges.

Explaining poor student outcomes at minority-serving institutions raises a question — is educational quality to blame, or do the numbers simply reflect the large proportion of high-need students that tend to enroll in these colleges? This question has become more important since the Obama administration announced in 2013 that it would develop a college rating system that may later serve as a basis for distributing federal aid. Some university administrators worry that the system will penalize institutions that serve low-socioeconomic status students and believe that ratings should take student demographics into account. Additionally, some educational policy analysts have argued that minority-serving institutions have long been underfunded, reducing the quality of education that they can offer. A 2011 change to student loan eligibility rules hit many HBCUs hard; and any new federal aid distribution formula could have further budgetary implications for minority-serving institutions.

To avoid the problem of comparing students with different socioeconomic and racial backgrounds, a number of studies have attempted to match HBCU students to similar students who attended other institutions (there are no comparable studies of HSI students). A 2010 study from Harvard and MIT looked at the incomes of African American college graduates and found that attending HBCUs in the 1970s led to higher earnings compared to similar black students at other institutions. However, the study found that by the 1990s, HBCU graduates earned 20% less than their counterparts who attended other colleges. A 2011 study in the Review of Black Political Economy looked at earnings data over a longer period of time and reached a different conclusion, finding that attending HBCUs increased earnings for students over the period 1979-1992. A 2006 study from George Washington University and the University of Wisconsin, Madison, found no difference in graduation rates among HBCU students compared to other students, despite the fact that the HBCUs had lower funding levels.

A 2014 study published in Research in Higher Education, “The Effect of Enrolling in a Minority-Serving Institution for Black and Hispanic Students in Texas,” looks at graduation rates at HBCUs and HSIs in the state of Texas. The researchers, Stella M. Flores of Vanderbilt University and Toby J. Park of Florida State University, used data from the state education department to track six-year degree completion rates for black and Latino students who graduated high school in the years 1997, 2000 and 2002. Like the studies above, the researchers compared students attending minority-serving institutions to similar students at other colleges. Additionally, their analysis looked at each college’s resources and level of selectivity.

The study’s findings include:

• Before taking student or institutional characteristics into account, students at minority-serving institutions were about 10% less likely to graduate compared to those at other colleges.
• Taking into account student factors such as gender, socioeconomic status, standardized test scores and enrollment in Advanced Placement courses, those attending minority-serving institutions were still less likely to graduate than their peers at other colleges. The difference in likelihood of graduation shrank, however, indicating that student composition explained part of the gap in graduation rates.
• Taking both student and institutional factors into account — including student-faculty ratio, number of students enrolled, percentage of tenured professors and admissions selectivity — there was no difference in graduation rates between students at minority serving institutions compared to their peers at other colleges.

The authors conclude, “Our research interestingly suggests that, given the amount of responsibility and the limited resources of the MSIs [minority-serving institutions] examined, these institutions in Texas do not appear to be consistently underperforming with regard to preparing their students, using graduation as an outcome, as compared to similarly ranked non-MSIs, as some critics have suggested.” The authors note several limitations in their study, including not accounting for the role of financial aid or for personal attributes such as student motivation. They also did not have access to SAT scores, but note that SATs are less important in Texas, where the top 10% of each high school is guaranteed admission to the state university system.

Related research: A 2014 Harvard Kennedy School working paper, “Initial College Choice and Degree Completion: Exploiting Variation in College Access Generated by Admissions Test Score Thresholds,” looks at the benefits of low-achieving students attending high-quality universities.

Keywords: higher education, African-American, Hispanic, Latino, minorities, discrimination