The Pell Grant Program, enacted in its earliest form in 1972, provides financial assistance to lower-income students who otherwise would not be able to afford college. Award amounts depend on the family’s expected financial contribution and remaining financial need, with a current maximum award of $5,550 per year. Our economy has reaped the benefits of a more educated population as a result.
However, Pell Grants are no longer keeping up with need, and the problem of affordability is no longer limited to lower-income students. Today, a college education is unaffordable for many students who are considered middle-class, but who do not qualify for Pell Grants.
More realistic expectations of what families can afford should be reflected in Pell Grant awards. Families with higher incomes, perhaps even $100,000, should qualify for Pell Grants. And families that currently qualify should receive larger grants.
To help fund this expansion of the Pell Grant program, tuition tax credits should be eliminated. The equivalent of the tax revenue previously lost to the credits should be spent on Pell Grants.
Focus on the Neediest
In a companion essay,
Arthur Hauptman argues
for revamping Pell to
ensure that dollars flow
to the poorest students.
In 2010 Congress created the $2,500 American Opportunity Tax Credit, which is designed to give middle-income families some relief from costs for tuition, fees and course material. Yet I question the usefulness of a tax credit that only benefits families who already have the resources to pay college-related expenses. This tax credit has been most beneficial to wealthier families with an adjusted gross income of $100,000 to $180,000; they received an average credit of $1,773 in 2009. In comparison, the average credit was $1,572 for recipients with incomes of $75,000 to $99,999; $1,164 for recipients with incomes of $50,000 to $74,999; and $866 for recipients with incomes of $25,000 to $49,999.
Somewhere in between the families benefiting from the tax credit and those eligible for the Pell grant are families who have substantial need, but receive very little or no assistance from either program.
Because tax credit-equivalent funds (approximately $5.5 billion in 2009 but estimated to increase to an average of $9 billion in 2011 and 2012) most likely will not cover the full cost of expanding the existing $30 billion program, the federal government will have to spend more on Pell.
The facts for today’s students are bleak, as are the implications for future students.
Tuition is skyrocketing. The average tuition at a public four-year university for 2011-12 is $8,244, an 8.3 percent increase from the previous year that also follows a 7.9 percent increase the year before. A longer-term perspective is even more dramatic; tuition at public four-year universities, when adjusted for inflation, is more than 3.5 times greater than it was in 1981-82. Thus, a college degree is roughly 3.5 times more expensive for this generation than the previous generation.
At the same time that tuition increases are far outpacing inflation, incomes are faltering. The median household income was $49,445 in 2010. When adjusted for inflation, this represents a 6.4 percent decline since 2007 and a 7.1 percent decline since 1999. Families with declining purchasing power find it even more difficult to keep up with rising tuition. Unsurprisingly, then, the average amount of student debt for graduates of public four-year universities is also increasing, reaching $22,000 per borrower in 2010. Unless these trends change, student and family debt will continue to increase as tuition increases.
It is impossible to identify a specific income where students become ineligible for Pell grants, since awards are calculated based on a number of factors, including family size and the cost of attendance. But it is possible to identify ranges where students will probably not be eligible for Pell grants. Well over half of dependent students with a family income of $39,999 or less receive federal grants (Pell grants are by far the most common, though a small small number of other grants are included). However, less than a quarter of dependent students with family incomes of $40,000-$59,999 receive federal grants, and almost no dependent students with family incomes of $60,000 or more receive federal grants.
Who, then, do we consider to be middle-class, and can they still afford higher education? The $40,000-$59,999 range for comparing federal grant recipients is roughly equivalent to the middle quintile of household income in 2010: $38,044 to $61,735. Some would argue that this could be viewed as the true “middle” class. Yet, the long held notion of middle class has always been associated with norms that include home ownership, retirement savings, and college educations. Many might argue that the fourth quintile, with incomes from $61,736 to $100,065, and even some households in the fifth quintile, with incomes of $100,066 or more, could also be considered middle-class.
Can these families afford higher education? The average annual cost to attend a four-year public university, including room, board and expenses, is $21,447. At the higher range of the middle quintile, $60,000 is one-third of the family’s annual income for just one child. Yet, the fact that this family would likely have an expected contribution so high as to disqualify the student from Pell grant eligibility seems totally unreasonable. These students still have great financial need!
Widespread opposition to the existing Pell grant program will make expansion politically challenging. However, as President Obama has said, "A world-class education is the single most important factor in determining not just whether our kids can compete for the best jobs but whether America can out-compete countries around the world. America's business leaders understand that when it comes to education, we need to up our game. That's why we're working together to put an outstanding education within reach for every child."
If we do nothing to help students who are falling into the middle-class abyss, and if college continues to become unaffordable to a growing number of students, we must be willing to accept the consequences of a less-educated workforce at a time when a quality education is more important than ever, not only for the betterment of the individual (intellectually and financially) but for the future of our country.
Hamid Shirvani is president of California State University at Stanislaus.
Last year, as Washington State faced a severe budget crisis, legislators embraced a novel way to fund student financial aid: a public-private partnership between the state and private corporations. Called the Opportunity Scholarship Fund, the fund attracts private donations and matches them with public money in order to support students in science, technology, and other “high demand” fields.
Washington’s legislators, like their counterparts around the nation, are shifting the purposes of college away from the civic and personal toward the economic and vocational, undermining the broader goals that have historically been part of American college education. (Even in the 1862 Morrill Act providing federal support for colleges in “agriculture and the mechanic arts,” legislators recognized that college education demands both “liberal and practical education.”)
The idea for the fund originated in a task force established in summer 2010 by Governor Christine Gregoire, a Democrat. The task force was made up of 16 members and chaired by Brad Smith, a senior vice president at Microsoft. The vast majority of task force members represented the business community. There were a smattering of higher education administrators, but no faculty or students. There was only one elected leader, the mayor of Everett, Wash. The task force’s composition alone makes clear Governor Gregoire’s approach to higher education: align it with the needs of the state’s major corporations.
Nowhere on the panel were the other interests of society represented. There were no social workers, no doctors or nurses, no ministers; there were no teachers nor civil servants; there were no artists, no writers. It should not be surprising, then, that the task force recommended a financial aid policy that not only offers corporations tax breaks but allows them to determine which college programs are worthwhile. As a Tacoma News Tribune editor wrote, there would be more aid for some students, but less for those “pursuing a degree in, say, history or business or education.”
Such an approach challenges the idea that a collegiate education is a liberal education first and a vocational education second. It ignores the civic and personal purposes of liberal education. It threatens the general education curriculum designed to prepare future leaders. It reduces students’ ability to choose majors based on their own interests, goals, and values (unless of course they are already wealthy enough to turn down financial aid).
But the scholarship fund is only one piece of Washington legislators’ larger effort to transform the broader purposes of college. Although the per-student cost of educating a college student in Washington has not changed dramatically, the share of that cost paid for by students and families has grown substantially. This shifting burden makes it harder for students to take a chance with a liberal arts major, especially if they come from disadvantaged backgrounds. It also means that students and their families are paying more for college and looking for ways to save money.
In response, legislators have been offering students ways around colleges’ general education requirements. Unlike a major, general education is the heart of the curriculum because it represents what all students must learn to graduate. It is designed to ensure that students receive the kind of broad education in the arts and sciences that will allow them to grow as human beings and be better civic leaders. The liberal arts also offer students the skills employers most desire: the ability to think, analyze, write, and find creative solutions to problems.
But legislators have no interest in these broad goals and want students to get their general education requirements out of the way fast. For example, Washington’s “Running Start” program urges students to take general education courses in high school, where it is cheaper for students and the state. A more recent program authorizes high school teachers to teach college credit courses in partnership with local colleges. Both programs send students the signal that general education courses are a hurdle to overcome and not worth students’ time and money.
Last year, Washington policy makers launched a serious attack on liberal arts education. First, they authorized the establishment of Western Governors University-Washington, an online institution with no faculty and the most minimal of liberal arts requirements. Instead, WGU promises students degrees in vocational fields as fast as they can earn them. Second, legislators urged colleges to design three-year degrees for advanced students, which would probably mean limiting their time on campus to receive a broad education. And, finally, legislators established the Opportunity Scholarship Fund.
The broader context in which the Opportunity Scholarship Fund is situated should trouble all Americans. It threatens to transform the very purpose of college education. At a time when many commentators are noting the economic value of a liberal arts education, and our foreign competitors are embracing the liberal arts college model, it seems shortsighted for us to turn our back on it. More important, by reducing students’ access to the liberal arts, they, and our society, will lose something extremely valuable.
Johann Neem is associate professor of history at Western Washington University.
Student debt has emerged as a major focus of the protests. Some worry that prospective students are hearing the wrong message -- while others see important shifts in the political debate about borrowing.