Recently, several DC think tanks and advocacy organizations have issued a series of reports about how to improve and sustain federal financial aid programs. The recommendations have been varied – converting Pell grants into entitlements, consolidating duplicative federal loan programs, and holding institutions more accountable for student progress and completion. But there’s one thing that’s been insufficiently addressed: the issue of how Pell Grants can promote college retention and completion.
At the same time, Colorado has announced changes to its need-based aid program. Students will see their awards increase as they progress through their studies (see Inside Higher Ed article). Colorado freshmen who qualify for Pell grants will receive $610 awards. These amounts will increase as students earn more credits, ultimately to $1210 for seniors. Said one Colorado official, “[W]e don’t have the ability with the limited number of dollars we have to fundamentally change the cost of attending an institution.” He continued, “[I]nstead of trying to have our policies do a poor job of keeping up with a vastly differing universe of costs, we figured it was a more appropriate way to target funds to have some effect on progress.”
We could use a good dose of that humility and pragmatism in Washington. Congress and the Obama administration have touted college affordability and made generous increases to the Pell program to demonstrate their sincerity. In particular, the president has preserved the maximum Pell grant for the poorest recipients, even while jettisoning other components, like the year-round Pell award, that had begun to serve the growing number of students who attend college in non-traditional ways. But in fairness to President Obama, even Governor Romney proposed very few if any changes to Pell.
Is leaving Pell untouched the right policy? The data suggest not. Despite politicians’ claims, recent increases and policies concerning Pell have really not made college more affordable for recipients, and retention and completion for these students remain miserably low. The purchasing power of the Pell grant has never been lower (the maximum grant now covers just 36 percent of tuition at a public four-year school, down from 77 percent in 1980). And, the evidence suggests that while increases to Pell may not be fueling the rise in college costs, tuition increases have consistently outpaced increases in grant aid. Meanwhile, the limited data on completion suggests rates for Pell students lag behind national averages and are well below 50 percent. Yet funding for the program has doubled since 2009, and policymakers continue to profess fealty to preserving the maximum award.
It’s time for a wholly different approach to Pell along the lines of what Colorado has in mind. Total spending on state need-based aid programs pales in comparison to Pell; we must make changes to the federal program. Do we know what specific incentives we would put in place for students at scale? Do we know if they would improve student retention and completion? No, but the Education Department can experiment with different models under current law to see what approaches work best before making program-wide changes. If they’re interested in improving outcomes for students and preserving the Pell program long term, policymakers would pursue this course.
*The views expressed in this blog post are Dawson’s own.
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