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College Graduation Rates: Income Really Matters

NEW YORK (CNNMoney) -- It's getting more difficult for low-income students to climb the economic ladder as the college graduation gap between the rich and poor grows.

While more students from all backgrounds are finishing college, the difference in graduation rates between the top and bottom income groups has widened by nearly 50 percent over two decades.

And since education is a key driver of upward mobility, this gulf means that it's even harder for the poor to prosper.

Some 54 percent of students from wealthy families obtained bachelor's degrees, said Martha Bailey, an assistant economics professor at the University of Michigan. But only 9 percent of low-income students got college diplomas.

Bailey recently co-authored a paper looking at students who graduated in the late 1990s and early 2000s and compared them to those in college two decades before. She found the wealthy made great gains in graduation rates, while the poor only inched up over that time period.

In the earlier group, 36 percent of the upper-income children graduated college and 5 percent of the poor did.

Part of the reason is because more students from households earning at least $87,000 annually are going onto higher education. But children from families making less than $26,000 have not made the same advances, said Bailey.

And while two-thirds of freshmen from wealthier households finish, only one-third of their poorer classmates do.

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