Poverty Rates and College Students: A look at the impact on Utah’s college towns

By: Andrew Reeve, Economist

Poverty rates are an indicator of how well an economy of any size can provide the economic means to support its citizens. High poverty rates suggest that an economy has underlying issues that are not allowing the citizenry to reap the benefits of a truly prosperous and healthy economic environment or that there is simply not enough economic opportunity in the area. It’s easy to blame the issues on a lack of management by local governments or institutions that are designed to help those they serve. However, published poverty rates neglect to factor in the presence of poverty populations who may have domestic tranquility and a strong sense of general welfare. Those are, at least for the sake of argument presented in this article, college students.

The U.S. Census Bureau quantifies poverty by the earned income of an individual and compares it to the Census poverty income threshold — essentially, a person is experiencing poverty if they do not generate enough income to afford their basic needs. But that is on paper. What if their income and support doesn’t come through themselves, but instead comes through another source, such as parents and family? The Census Bureau definition does not look beyond the student and see the family behind them. Instead, it only sees the student’s income, or lack thereof. Thus, the college student becomes a poverty statistic; when, in reality, they probably are not.

Students in college towns can comprise a large population proportion and can considerably affect the local economic structure. Three areas in Utah — Logan, Provo and Cedar City — have an impacted economic structure because of their college student populations. Although all economies are unique in their own right, college students provide a certain uniqueness that shapes the local demographics differently. For one, they are young, eager and more-often-than-not “poor.” But just because they lack the means and likely the skill sets to budget out a week from today does that place them in a true state of poverty? I argue it does not — at least not in the traditional sense. Hence, their exclusion should be considered when we are looking for the authentic poverty rate of a given college town.

It is important to look at the make-up of an area’s demographics and how that can relate to the area’s characteristics, such as poverty. Using the variable of college student population in the three Utah cities cited above we can examine their influence on those characteristics.

According to the U.S. Census Bureau, Logan (home of Utah State University) has an overall poverty rate of 25.4 percent (see graph above). If we were to adjust that poverty rate by excluding off-campus college students (those who are not housed in on-campus dormitory units or living with family), the rate drops to 19.7 percent — a difference of 5.7 percentage points. That equates to roughly 2,650 individuals in poverty who are college students. Although aspects of the way they live may lead one to believe they are impoverished, the likelihood that most of these individuals are facing true poverty hardship is low. For many college students, support from family is a main source of assistance for rent and food expenses. On-campus resources designed to help students facing economic adversity are also readily available*. In contrast, those who are experiencing actual impoverishment often do not have such readily available resources to fall back on.

When we look at Provo (home of Brigham Young University) we see the difference in the adjusted poverty rates are more pronounced. In Provo, the difference between total poverty and college — adjusted poverty is 8.6 percentage points — roughly 9,185 individuals.

Cedar City (home of Southern Utah University) shows the greatest difference, with the poverty rate virtually cut in half to 12.6 percent — equating to roughly 3,625 individuals.

The bottom line is that when we consider poverty rates for various areas it is important to look at the underlying factors that contribute to those numbers. Understanding the full story of what is included in an area’s rate of poverty gives elected officials, policy makers, nonprofits and community leaders a clearer picture of the actual need for addressing poverty in their community.

(*) For example, Utah State University’s Student Support Services, a federally-funded TRiO program.