During the Fall Activities Fair, many starry-eyed freshmen are enticed to join campus service organizations with claims that Athens-Clarke County has one of the highest poverty rates in the state of Georgia. Sometimes, service-minded individuals, having heard statistics from other students in similar organizations, will even claim that Athens-Clarke County has one of the highest poverty rates in the nation. It turns out that though they inspire public service and outreach in Athens, most of these estimates fall short of statistical accuracy, and so does the federal formula for determining poverty.
In fact, the Census Bureau, with research conducted by the American Community Survey, discovered that, in general, the rates of poverty in college towns tended to be inflated by the college students living off-campus. For instance, Athens-Clarke County experienced the second highest change in poverty calculation in the country when excluding college students from the formula, a drop of nearly 11.4 percent from 38.3 percent to 26.9 percent. The problem lies with the fact that the Census Bureau defines poverty based on household income. Though the definition is seemingly straightforward, this misrepresentation arises from their classification of a college student living off campus and not with relatives as a household. The Bureau identifies income for the 23.2 million students who fit these criteria as personal incomes in the form of scholarships, Pell Grants, and financial support from relatives. However, this estimate does not include loans, a key source of money for many college students. Because few students earn more than $12,119 per year from the above-mentioned income definition, 51.8 percent of college students nationwide living-off campus and not living with relatives are considered impoverished.
These inflated statistics, though, are not only concerning because of their inaccurate methodology; this flawed formula is funneling federal funding to relatively well-off college towns at the expense of highly impoverished inner cities and rural areas. In this manner, Community Development Block Grants, federal funding for affordable housing, job creation, and community development to assist low- and moderate-income individuals, are diverted to college towns at a rate higher than necessary because allocation is dependent upon flawed federal formulas. The Department of Housing and Urban Development (HUD) has even claimed that student-related poverty inflation accounted for at least $27.5 million per year in inefficiently allocated funds.
The Block Grants formula even considers many college towns to be “entitlement” communities: metropolitan cities with populations greater than 50,000 that meet the criterion of having a poverty rate above the threshold. Such communities receive funding directly from the federal government. This contrasts with non-entitlement communities, where the states have discretion over how funding is allocated. Because of the lack of discretion over how funds are allocated to entitlement communities, many of which are college towns because of the population requirement and poverty calculation, the states have no say in whether or not more funds, relatively speaking, are granted to high-need metropolitan areas or college towns.
The fact that Athens-Clarke County drops from having the third highest poverty rate in the state of Georgia to 47th when disregarding college students living off-campus seems puzzling yet harmless. But the allocation of block grants based on misguided poverty calculations can be detrimental to high-need communities that face poverty rates higher than college towns, especially after factoring out college student populations, because such high-need communities lose proper funding. With that in mind, changes in the formula by excluding the majority of off-campus college students from poverty estimates, as HUD has lobbied Congress to do, would help alleviate this problem. Similarly, granting more discretion to the states in terms of entitlement communities or raising the population threshold of entitlement communities to 200,000 instead of 50,000 could easily exclude college towns and allow a more efficient allocation of federal funding.
