"College Town 'Poverty' Exposed:" Exposé or Rant?

"College Town 'Poverty' Exposed:" Exposé or Rant?



The Cleveland Plain Dealer ran a story a couple of weeks ago, which
dealt with the issue of Community Development Block Grants (CDBG) going
to college towns.  The article ran in Sunday's Ann Arbor News,
which is where I saw it.  The article itself is available on
the
Internet, href="http://www.newhousenews.com/archive/koff091806.html">here.



The gist of the story is this: the CDGB program is a federal program
that provides block grants to communities based upon their poverty
rates.  College towns tend to have a high proportion of
college
students who technically are classified as impoverished.  As a
result, many relatively prosperous college towns end up getting money,
while some other towns get less.



The article is styled as something of an exposé, but I find
that the analysis lacks depth.

College Town "Poverty" Exposed



BY STEPHEN KOFF and BILL SLOAT

c.2006 Newhouse News Service

Sept. 18, 2006



BLOOMINGTON, Ind. -- This is the home of Midwest prosperity, a leafy
Big 10 college town amid gentle green hills, with abundant intellectual
life and a town square where you can get a $1.91 espresso or the latest
Talbots classic fashion.



That, at least, is how many of the townsfolk and Indiana University
students see it. Yet there's another, much less charming view of
Bloomington. In the Census Bureau's newest report last month,
Bloomington popped up as the poverty capital of the Midwest, with
nearly 20,000 of its 55,000 residents broke -- a percentage greater
than almost anywhere in the nation.



That would explain why Bloomington, with a poverty rate worse than
Cleveland, Gary, Ind., and Flint, Mich. -- old factory towns that
symbolize Rust Belt decline -- gets an unusual share of federal tax
dollars to fight poverty and blight. Money for the poor is supposed to
go to the poorest places...

So what is lacking in the analysis presented in the article?
 A
few things.  For one, there is an implication that college
students are not really poor.  Second, the authors seem to be
unaware that legislation has been drafted to address the issue.
 Third, they do not mention the fact that many college towns
are
at least somewhat burdened by the fact that colleges do not pay
property taxes.  Fourth, they not not address the fact that
one of
the best ways to combat poverty is to promote college education.
 



The authors of the article have reason to be concerned about this:

Cleveland, for one, has seen its CDBG funding shrink
from
$31.2 million in 2001 to $24.6 million this year even as it regained
the title of poorest big city in the United States. Part is due to cuts
the Bush administration and Congress made to the program. But part is
from rising competition for HUD money, some from college towns which,
according to the Census Bureau, have high poverty rates.

Cleveland has its own share of higher education facilities, but it is
not a classical college town, in that the colleges comprise a modest
proportion of the city.  Even so, it does have at least href="http://www.uscollegesearch.org/cleveland-ohio-colleges.html">38
institutions
for post-high school education.  It would take an extensive
analysis to determine if the cuts that Cleveland is facing are due to
the competition mentioned in the article.  That would not be
easy
to do.  For example, do the enrollees at the Lincoln Welding
School get counted as college students?  There are many such
questions that one would have to examine in order to get a complete
picture of the poverty situation and the effect of various statistical
classifications on the CDBG program.



As for the question of whether college students are really poor, that
question itself has no easy answer.  Certainly, many of them
are.
 Although the article pokes fun at coffee houses selling $1.91
espresso, there are plenty of college kids who exist on peanut butter
and jelly sandwiches because they really don't have a lot of money.
 



The article points out that federal official are aware of the "problem"
and want to fix it.  

HUD officials have sought ways to better allocate
their
money, and they want to tweak the formulas pegged to population, growth
rate and age of housing. They also want to exclude the majority of
off-campus college students from the poverty count.

That is true, they are trying to do that.  In fact,
legislation has been proposed to do exactly that: the href="http://www.hud.gov/content/releases/pr06-056analysis.cfm">CDGB
Reform Act of 2006.  I was not able to find this
legislation on the Library
of Congress THOMAS
site, so perhaps it has not been formally introduced.  Still,
a
thorough treatment of the issue should mention this proposed
legislation.  The Act proposes that all "unrelated individuals
enrolled in college" be excluded from the formula used for computing
the size of the grants.  The href="http://www.nahro.org/">National Association of Housing
and Redevelopment Officials expresses concern about this, and
points
out
(207 KB PDF) that the proposed legislation does not address the
college-town issue with precision.  For example, it does not
distinguish between part-time and full-time students, and does not make
any distinction between students who are dependent upon their parent's
income, and those who are not.  This would merely replace one
potentially-misleading statistic with another.



A cynical person might think that the Act was written that way, simply
because it would provide an apparent justification for lowering the
overall grants.  The fact that the communities that would
loose
the most, would be liberal-leaning communities could heighten this
suspicion.    



Another factor to consider in this is the fact that colleges often
occupy large tracts of land within communities.  This has the
effect of decreasing the tax base, while still requiring public
services.  The impact is ofset somewhat by the additional
economic
activity generated by the college.  Even so, it leaves
communities
vulnerable to stagnation of infrastructure due to the funding
shortfall.  It seems reasonable for block grants to be used to
offset this effect.  One could argue that this is not the
intended
purpose for the funds.  On the other hand, if the desire is to
reduce poverty, it would be reasonable to allocate at least some of the
funds to prevent stagnation, as opposed to always waiting until an area
falls apart, then trying to fix it.



That leads to the final point.  One of the best ways to combat
poverty is to educate people.  Clearly, the allocation of
block grants to communities does enhance education, albeit indirectly.
 Although such indirect support may not be the best or most
straightforward approach, it is a reasonable thing to do.  If
the decision were made to end the counting of college students for the
purpose of calculating the block grants, that decision should be made
with the understanding of the full implications of the decision.
 



It probably would make sense to make changes gradually, if they are to
be made at all.  For a community to suddenly loose millions of
dollars in funding could risk causing the very thing they are trying to
prevent.  



As for the article in the Cleveland Plain Dealer, it does serve to call
attention to an important policy issue that could affect higher
education.  But it seems to convey a stereotype of college
students that is not accurate or fair.  It also fails to
address the complexities of the issue.