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The Devil's Workshop

2 Million Pell Grants: Any Takers?

December 7, 2006

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Three feet. Three feet is how close I was to testifying before the U.S. Senate Finance Committee Tuesday. Two million Pell Grants was my offer. No luck.
    
I’d only been waiting for this hearing all my life. The announcement read:

"Report Card on Tax Exemptions and Incentives for Higher Education: Pass, Fail, or Need Improvement?”

Background: With tuition going up every year, endowments growing bigger every year, and the salary of another college president breaking the million-dollar mark seemingly every week, it's important for the Finance Committee to closely examine what colleges and universities are doing to justify their tax-exempt status.

I couldn’t have written the issue better myself. I'd been praying for a shot across the bow for these tax issues, and as a Christmas present the Republicans and the Democrats had blown off the rudder with a torpedo. Would smoke be pouring out of the chimneys at One Dupont Circle? That's the higher ed Kremlin, with many entrenched associations. They must be thinking about burning the files before evacuating.

Two weeks ago, right here on IHE, I saw the headline: "Surprising Shift For Senate Tax Panel," about all the tax breaks and why the tuition keeps going up. I’d just finished a think-tank paper on the very topic. With some modest spins of the tax and research dials, I was offering $8.1 billion in Pell Grants. Two million new grants.

I know this from Sam and Josh on "West Wing:" Don’t go to the Hill with an idea unless you know to pay for it. I knew. Blue shirt, red tie for the cameras. My chance for my country.

Here’s how my testimony would open. Sound bites? We’re talking headlines:

Columbia University has announced a $1 billion -- or 246,913 Pell Grant -- raid on the U.S. Treasury. Cornell University has also joined the game, taking away another $1 billion dollars in possible taxes. So have the University of Virginia and Yale, which are in for $3 billion each. A $5 billion drive by Harvard is said to be in the wings. These raids have the blessings of the Secretary of the Treasury, of both Houses of Congress, and of you and me. By titling the raid a “$4 billion capital campaign”, Columbia and Cornell can proceed without further approval. We, the people, have deemed contributions to such campaigns to be deductible from our income taxable by the Internal Revenue Service. In principle, Columbia will take $4 billion off the taxable income of the donors. In a conservative estimate, this translates into at least $1 billion less federal taxes collected. 

I looked up the committee on the Web, clicked “Contact Us” and dialed the telephone number. “Hi, my name is Sloane. I’d like to testify at the December 5, 2006 hearing on tax breaks and nonprofit status in higher education.” No lobbyists. A citizen and a telephone.

Friendly voice. No. The hearing wasn’t posted yet, so the hearing was not official. I couldn’t talk with any staff about testifying until the hearing was official. Watch the Web site. But how come everyone knows there will be a hearing December 5? Well, my new friend explained, that’s the plan. But until it’s official…

On the Web, the Committee schedule ended at November. Called back.

“Oh, we’re going to update it for December. But the hearing isn’t official yet.”

“Two million Pell Grants without new spending? There must be someone I can talk with.”

No. That afternoon, a friend e-mailed the notice: Tuesday, November 28, 2006, 5:29 p.m. Hearing posted, 215 Dirksen Senate Office Building. With six witnesses, and excellent witnesses at that. Called again.

Voice mail. I called the number for the Democratic minority. “You have reached the U.S. Senate voice mail system, if you know the extension….”

Finally, a person. The hearing is full. No room for more witnesses. OK. I called and called and called around. Here’s how to send your comments to the public record. I did. Express mail. Did I need to offer $10 billion?

I redeemed some frequent flyer miles and headed down. I called everywhere I could think of to see if there was a way to testify. I kept my cell phone charged, waiting. My only incoming call before the hearing was from Delta, a recording that my flight was delayed. 

The scene at a hearing: Line up outside Dirksen 215. I arrived 45 minutes early and found about 50 people already waiting. It’s a bright hallway, marble floors. People going in both directions. High heels clack, I learned. Men’s tie shoes a soft clop. This man, coming my way, no sounds at all. Senator Kennedy! Black, soft-soled walking shoes. I am a sucker for democracy. We, the people, really can be in the same room as those who govern. If we show up.

The door opened. A guard let the line enter. It stopped with a dozen people ahead of me. The room was full. Being locked out did serve my story. I saw the witnesses arrive. One, Jim Duderstadt, president emeritus at University of Michigan, said hello. “I read your paper. Are you going to replace me as a witness?” No luck, I said.

A few more of the people, including me, were able to enter. Get this. The people have about 50 seats in the back. Arrivals included lobbyists from the University of Texas, Harvard, the land grant colleges and universities' association, Georgetown. What were these other seats with white sheets of paper on them, “Reserved”? Treasury, eight seats? Fair enough. ITC? JTC? Mr. Pinkert?

The Embassy of the Netherlands?

Another witness I know, Sue Dynarski of the Kennedy School at Harvard, had three seats reserved. She didn’t know why and offered me one. I moved from the back row, since someone else was waiting without a seat. At least 20 reserved seats were empty for the hearing, AP and Reuters, too. I don’t know how many people were stuck in the hall.

But there I was, right behind the witness table. I sat and listened. Question after question from the senators. Fine replies from thoughtful witnesses. No one offering even a million new Pell Grants. An aide handed a note to Sen. Charles Grassley, the Iowan and departing committee chairman, and, I swear, Grassley looked right at me. One of my calls had worked. He was going to ask, “Is Mr. Sloane present?”  No luck again. Just had to excuse himself for a moment for another hearing. 

Do I stand up and shout about my Pell Grants? No. Security guards. (I looked after the hearing. Half my head is right there on the Webcast, just behind the witness table.) The hearing ended. Senator Grassley was sitting right there, alone. Could I talk with him? If I walk slowly, he may leave. Too fast and will security tackle me?

I walked my regular pace the 30 feet to the table for the committee. Carpet, so no sounds from my tie shoes. Staff right behind him. If I hand over my 2 million Pell paper, well, I’m told staff would rather I didn’t. If I tried to explain, well, the man had asked all the right questions already and did look tired. A compliment. A thank you.

“Senator Grassley, I’ve been working on these issues for years. It’s a dream come true to have you raising these questions here in this room. Thank you.”

I swear, the senator's eyes brightened. “Well, I’m just doing my job. It’s not just my job, it’s my responsibility to raise these issues,” he said. I shook his hand. No guards to prevent me. And I headed home. This people had spoken.

I’ll get my paper into the mix and more than half my head on some video file bound for the National Archives. This afternoon at 3 p.m., I report for my shift as a tutor at Bunker Hill Community College. The students need these Pell Grants. Yes, I missed testifying by a few feet. In the meantime, I’ll help one student at a time. My issue is on the table, at last, back in Washington.

Wick Sloane’s Inside Higher Ed column, The Devil’s Workshop, appears as needed. He is an end user of higher education.

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Comments on 2 Million Pell Grants: Any Takers?

  • Policy By The Strangely Informed
  • Posted by RWH on December 7, 2006 at 9:25am EST
  • Very nice ... ahhh, the rigors of being an intelligent, concerned citizen in the American democracy.

  • Sadly Misinformed
  • Posted by Leslie on December 7, 2006 at 10:30am EST
  • Ivy League fund-raising is not the enemy of Pell Grants. Singling out Columbia in his diatribe is unfair. The Columbia Campaign has nothing whatsoever to do with Pell Grant funding.

    This is an overly simplistic argument with ramifications far beyond the numbers of Pell Grants. There's no way that increased tax revenue would flow directly in Pell Grants--not anymore likely than it would flow into tax rebates for us all.

    The author is advocating that the US dismantle a portion of the tax code (deductions for charitable contributions) that helps keep higher education and many other 501C3 institutions in business. These deductions do not "take away" tax revenue for educational use--it's not a zero sum equation.

    Common sense would suggest that charitable contributions to higher ed provide a great range of resources to university students beyond Pell Grants--professorships, buildings and yes, scholarships and other types of financial aid.

    Taking the Ivy League schools to task for fund-raising campaigns is a red herring. Columbia itself has said that the $4B is a total long term fund-raising goal which includes all sorts of projects. A huge amount of that goal has been targeted for improvements to financial aid for Columbia students so that they are less dependent on instruments like Pell Grants. Ironic, no?

    What does Inside Higher Ed gaine by giving such misinformed and misleading views a venue? We can get this sort of anti-intellectual rant from tabloid TV any day of the week.

    Get real. See the bigger picture.

    PS: I am also a beneficiary of higher ed and a satisfied Pell Grant recipient--but don't ask what years. ;)

  • I'm not classist - I have poor friends
  • Posted by ANT on December 7, 2006 at 3:05pm EST
  • As a former Pell Grant recipient, I'll defend them to the death, but it seems rather disingenuous to throw it out for its cred factor every time we have to talk about money (whether Pell be related to the issue or not). Seriously. Please. Respect the Pell. Stop trotting it out like a $5 whore every time a new issue of the week comes along.

    Likewise, let's discuss another tried and true knee-jerk getter, cuz it works every time - Harvard. Yale! Princeton! Billion dollars! In reality, for every billion dollar Harvard-esque enterprise, there are dozens of poor country cousins like Sarah Lawrence or Barnard - great schools that would sink under even the smallest added financial burden. So, again, let's stop with the bad-guy flavor-of-the-week attention getting device. It takes the issue out of context and harms everyone it doesn't include - which is pretty much everyone EXCEPT the Ivies, who wouldn't be affected by this sort of trivial rap on the wrist, anyway.

    Now, none of this is to say there might not be a few good reasons for re-evaluating tax exemption with a fine, critical eye. But if we're doing it as clumsily as we have in this article, woe to academia when it comes out the other side.

  • From the author
  • Posted by Wick Sloane , The Author on December 7, 2006 at 8:10pm EST
  • Check out the paper. You can click on it in the column. Proposal is progressive tax benefits to do no harm to the poor cousins. I think you'll find that I agree with you both. Column just a summary and opening salvo. No call for across the board actions from me. How do we create tax policy to incent education of those in need?

    ws

  • Waffling now
  • Posted by Leslie on December 8, 2006 at 12:10pm EST
  • Wick: Thanks for agreeing with us, but you also prove my point.

    If you have a higher purpose, why set it up as a "Haves" (Ivies) vs "Have Nots" (all other colleges)? What, not sexy enough?

    Sounds like FOX NEWS--snarky headline, but substance is something else.

  • Me, more of a pancake man. Not waffles.
  • Posted by Wick Sloane on December 8, 2006 at 2:45pm EST
  • Higher purpose, from the paper and other work:

    "A Modest Proposal.

    "What’s a tax policy that incents a population educated for the 21st Century? For employment and citizenship? A tax policy as powerful as what mortgage interest deductions do for home ownership? Not free PhDs for all. The basics.

    "Defining education is possible. Start, first, with the Hippocratic Oath. First, do no harm. Proposal: A tax policy that ensures the 90% of US residents, by the time they are 20 years old, can pass the AP exams in English Language and in Statistics. That will everyone on a path of their own choosing. "

    These are good challenges. Thanks.

    Of course, read smile, part of why I have to resort to Fox tactics may or may not be the tough editors here at IHE.

    Why hammer the haves? My schools are among them. If you are going to be critical, a look in the mirror never hurts. Then, I don't think many realize just how much money these places have. Sure, take a tax-deductible donation for a needs-based scholarship. But for indoor golf practice nets, as at Williams College? DOE and Congress say there is no more money for the low-income students, Pell Grants or otherwise. Higher ed often cries poor. But those debates never look at the money to higher ed through tax subsidy and research and research overheard. I don't mean scrap all that. Some modest shifts of the dials add up to billions.

    If, say, as a national interest, the people decide the nation needs more need-based aid, why not at least discuss making a donation for a golf net less than 100% deductible for that year? Or taking five percent off everyone's federal indirect-cost reimbursement for sponsored research at universities?

    The Columbia campaign and others -- I disagree with the comment that they have nothing to do with Pell Grants. They have everything to do with Pell Grants, and federal highway funding, too, for that matter. Columbia, and the Ivy League and Stanford and many small liberal arts colleges will admit that their endowments are big enough to eliminate tuition altogether. The market at the moment does not require them to. If Yale is only going to spend 3.8% of it's endowment, instead of the moral minimum of 5%, why should the federal government let Yale accept Pell Grants at all?

    The behavior of the "have's" at the moment consumes billions in federal resources that could go elsewhere. Headstart would be fine with me. If the "have's" were flaunting less money, perhaps using them as an example would be a weak rhetorical trick. I don't think the story can have headlines large or loud enough.

  • 2 Million Pell Grants: Any Takers?
  • Posted by Phil Kinnicutt on December 8, 2006 at 7:35pm EST
  • Sometimes you have to get peoples' attention before they will read and get the point. Wick does this well.

    The bottom line is that public institutions of higher learning are stuggling to deal with the shift to becoming publicly assisted vs. being publicly funded. That being the case, some mechanism must be found to encourage more private support for these invaluable institutions. Wick has taken one approach. Does anyone else ahve any ideas on how to do it?