With President Obama’s new proposal to greatly expand federal support for community colleges getting all the attention, many on Capitol Hill want to bring back a large program tailor-made for the students who attend these institutions – one that the president himself led the charge to cut.
In late 2008, President Bush and a Democratically controlled Congress fixed one of the Pell Grant program’s biggest flaws. A student who attended full-time for two semesters would exhaust her grant such that if she wanted to attend an additional semester that year (say in the summer) she would have to do so without any federal grant aid. Yet when the calendar flipped to the next school year a few months later, she’d have access to another Pell Grant. The solution to this problem was always obvious: Let her access next year’s grant sooner.
With the 2008 reauthorization of the Higher Education Act, lawmakers finally allowed that to happen. The so-called year-round Pell Grant became available on July 1, 2009, although most grants likely were not awarded until the summer of 2010. Shortly thereafter, the Obama administration -- with the help of Congress -- shocked the higher education community and ended it to solve a budget crisis within the overall Pell Grant program.
Many believe that, despite the elegant simplicity of a year-round Pell Grant, the original version somehow got it wrong thanks to bureaucratic incompetence, abuse, or an ill-conceived design, which caused its costs to explode. Those views are hampering calls to reinstate the policy. Worse yet, the purported flaws in the policy are more myth than reality. Our new paper, “Myths and Misunderstandings: The Undeserved Legacy of Year-Round Pell Grants” (Jan. 22),argues that year-round Pell Grants did not suffer from any design flaws and that many of these explanations are erroneous. We highlight some below.
Many understand that year-round Pell Grants cost far more than budget experts and policy makers expected, implying that unexpected costs were unreasonable. It turns out that those higher costs were not due to some feature of the year-round grant. Every part of the Pell Grant program ultimately cost more in 2010 and 2011 than predicted, driven by a combination of increased benefits, eligibility changes, and the economic recession. Had policy makers never enacted the year-round grant, the cost of the Pell Grant program would still have spiked, peaking at $33.6 billion instead of $35.7 billion in the 2010-11 school year.
Still, many are under the impression that a year-round grant should not increase the cost of the overall Pell Grant program at all, so something must have been wrong. After all, students who use two years’ worth of grant aid on two years’ worth of classes theoretically would receive the same amount of Pell Grants whether they take one year or two to complete those courses.
Federal budgeting principles, however, mean that any year-round Pell Grant program must appear as an increase in spending on Pell Grants equal to the amount of year-round grants disbursed. That is because a year-round grant pulls funding forward from a future, yet-to-be drafted spending bill, and makes it appear on the current bill. Spending on the current bill is thus higher. The effect is no different in a multi-year budget window -- as long as one assumes the Pell Grant Program exists in perpetuity.
The Department of Education is another common scapegoat for the unexpectedly high cost of year-round Pell Grants. Under this reasoning, the department loosened eligibility rules beyond Congressional intent so that more students benefited and received more money. Instead, we found that the department narrowed the scope of the year-round program so much so that its rules were originally viewed within the higher education community as too restrictive.
The department’s rule was stricter than it could have been because it did not allow students to collect year-round grants only because they had exhausted their regular grants for the year, as some desired. Student aid advocates argued that students should qualify for year-round grants simply because they had used up one year’s worth but were enrolling in more classes. The department disagreed and argued that students needed to demonstrate that they were “accelerating” progress toward a degree by some other standard than simply taking more classes.
At the same time, the department’s interpretation was looser than the most restrictive option possible because it made eligibility contingent on students' first accumulating a certain number of credits in a year, not overall progress toward a degree. A student did not need to demonstrate he was going to finish a credential early, in other words. Even so, those provisions were not so loose that they would have dramatically expanded the year-round Pell Grant beyond what Congress intended, nor should they have meaningfully increased the cost beyond initial expectations.
Another erroneous argument one hears often in the policy community is that due to a design quirk, the year-round Pell Grant program provided 50 percent more benefits than intended as students inadvertently received two full Pell Grants in a single year. Costs were therefore higher than expected.
Consider, however, that the department awarded year-round grants by the same calculations used during the rest of the year. A student who earned a school year’s worth of credit and enrolled for an additional semester, such as a summer semester, would receive an additional grant worth no more than what he would receive in any other semester. As a result, the average year-round Pell Grant was $1,700, which was less than half of the average $3,833 annual grant then.
Perhaps the most disingenuous claim about the year-round Pell Grant came from the Obama administration, which argued in early 2011 that the program “has not yet shown any evidence” that it encouraged students to accelerate their studies. That’s true, but misleading. The timing between implementation and the proposed elimination of the policy was such that there could be little evidence to judge the program, positively or negatively, on that measure.
The Obama administration proposed eliminating the program in February 2011, in a budget that was likely developed in the late fall of 2010. Only one round of year-round grants had been issued by that point, mostly in the summer of 2010. That would have given the administration one year’s worth of information about how the year-round program was performing, hardly enough time to gauge whether students had accelerated their coursework. Furthermore, the information would not have provided a perfectly accurate snapshot of the year-round grant. Schools implemented the year-round Pell Grant under their own interpretation of the program that year as regulations produced by the department had yet to take effect.
The timing of the proposal also calls into question whether the Obama administration could have obtained reliable data about the year-round grants issued in the summer of 2010 in time to make its claims in a budget proposal developed in late 2010. If it had obtained such data, it did not release them or any related statistics.
Separating facts from misinformation regarding the year-round Pell Grant will help policy makers enact sensible policy changes in the future. Today’s higher education students increasingly do not fit the profile for which the Pell Grant program was originally designed. The year-round Pell Grant was a much-needed modernization of the program and it should be reinstated.
Jason Delisle is director of the Federal Education Budget Project and Ben Miller is higher education research director for New America, in Washington.
With the country’s focus on college access and success, policy leaders are taking a close look at the Pell grant program, which is our country’s principal college financial aid program. This issue is especially timely with the reauthorization of the Higher Education Act on the horizon. One policy expert, Complete College America, has recommended moving Pell Grant eligibility for full-time status from a required course load of 12 credit hours to 15.
In a research brief by Complete College America called “The Power of 15 Credits,” the group makes a good case (citing data on first-time enrollees) that the larger credit load does, indeed, have an impact -- and improved students’ chances of earning a degree.
But is it that true for everyone?
What about the nontraditional or adult learner? Only 16 percent of higher education enrollments are 18- to 22-year-old full-time undergraduate students residing on campus. Adult students over 25 years old make up 38 percent of the college population. For these adult students, a 15 credit-hour load per semester is not realistic given current student supports.
Many of these students are returning adults with some college, but no degree. They are often juggling full-time jobs and family obligations that they must balance against their dreams of a college degree. In fact, almost a third of college students are working full-time. Should all these students be required to quit their jobs and take on more debt than what they already have so they can take 15 hours of classes? Requiring them to take 15 hours might cause them to give up their studies altogether.
Promoting the 15 hours per semester message for all students comes with a real risk. Most jobs of the future will require workers to possess postsecondary credentials. If we insist on requiring 15 credits for financial aid to the 80 million working adults who do not yet have a degree, we could seriously damage our nation’s workforce productivity by cutting off access to education and training for low-income workers. Instead of creating more obstacles, we should be looking for ways to address the challenges already facing adult students by:
Increasing financial aid support to reduce the need to work full-time to cover living expenses
Including in eligible expenses under Pell grants innovative approaches that help adults accelerate their path to a degree or credential
Providing incentives for adults to maintain their momentum over a longer time to degree
Encouraging institutions to structure their programs to better serve adults
At the end of the day, we can all agree on the importance of having a college education. We can also agree that having a more educated population is an overall advantage for our country. However, we cannot take a one-size-fits-all approach to the number of semester hours students should take. While encouraging students to finish their studies as soon as possible, we should also be finding ways to promote success at a pace that is reasonable for them.
Pamela Tate is president and CEO of Council for Adult and Experiential Learning.
Prominent university says government's proposal to deregulate tuition will allow it to give scholarships to a third of its students; critics say Sydney's plan will help it cream students from other universities.
College admissions is already a high-stakes, daunting process. There are so many moving parts students have to deal with: essays, letters of recommendation, financial aid, interviews, standardized testing — not to mention keeping up with high school classes and activities.
In my previous role as a college counselor for Bottom Line (a college access and success program for first-generation, low-income students), I worked with a cohort of high school students from start to finish in their application process. I was there to answer questions, give responsible advice, help make college accessible, and ease the stress of the process. My students were often worried about making mistakes -- as evidenced by the countless frantic phone calls and emails I would receive -- and now I have to wonder if their biggest mistake was trusting that their applications would be reviewed fairly.
I asked several of the students I worked with what they made of the situation.
For Kimberlee Cruz, a student I counseled in high school and college, having to worry about the FAFSA position would have been a huge concern. “It would have stressed me out, to worry that my fifth choice could have given me terrible aid just because I didn’t list them first. What if I didn’t get into my first choice? Would that mean I would have no options with good aid?”
Financial aid was the most important part of the application process for Cruz, a junior at Worcester State University, as well as the part that was most confusing. “Regardless of the position, you’re interested in the school; otherwise, it wouldn’t be on your FAFSA.”
Most of the students I have worked with wouldn’t think twice about the order they listed colleges on the FAFSA. For some, sure, it was probably in the order of their preference, but for others, maybe the order was alphabetical, geographical, FAFSA code numerical (O.K., probably not that last one, but you get the idea).
And why should they think twice? There’s not any indication on FAFSA that the order matters or that it will be shared.
Daniel Figueiredo, another former student, was shocked to find out that some colleges use information in this manner. “I think it’s completely unethical. To infer something like preference based on a list, it’s sneaky and can really mess up someone’s future -- it shouldn’t be evaluated.”
Figueiredo, a senior at Worcester State, said that he applied to a few reach colleges at the last minute, institutions he wasn’t sure he could get into but wanted to try. “I thought, what the heck, I’ll do it. Maybe I had a chance, but I put them farther down on my FAFSA list since I added them to my list later than some more attainable schools. I did get waitlisted for two of them, and now I’m wondering if the FAFSA position played a role.”
What students should focus on with the FAFSA is having accurate information, having all their colleges added, and meeting all of the priority deadlines. Financial aid can be confusing enough for students and their families, and for many, the weight of their future completely rests on the aid packages that schools offer.
Throwing FAFSA position in the mix is another step for applicants to remember, another potential barrier to access. And I wonder, would an alphabetical or random order even make a difference, or would schools interpret the list as preferential anyway?
Maybe it’s just me, but a college taking its FAFSA position into consideration for admissions and aid decisions seems like a popularity contest. I know that colleges want to fill their classes, that admissions recruiters have goals to meet, that everyone wants the best and the brightest to want to attend their institution. But holding a FAFSA position against a student -- especially since many students don’t realize that something so arbitrary could greatly affect them -- seems in direct opposition to the ultimate goal of getting students to attend and graduate from college.
If FAFSA continues to share this information, colleges engaging in this practice really need to reconsider their position on student access and success. And students thinking about applying to these institutions might want to reconsider as well.
Ali Lincoln is a project director for TVP Communications, a national public relations agency with expertise in higher education.
The ubiquitous coffee chain Starbucks has received a great deal of positive media attention for its announcement that it will provide full reimbursement for tuition and fees of employees at company-owned stores who enroll in one of Arizona State University’s online bachelor’s degree programs. Education Secretary Arne Duncan even made an appearance at the program’s unveiling, alongside Starbucks CEO Howard Schultz and Arizona State President Michael Crow. But, while I applaud Starbucks for providing financial assistance to students who want to continue their education, the conditions in the model will result in fewer employees successfully completing bachelor’s degrees. Below are the reasons not all employees will benefit.
Only juniors and seniors will get a full reimbursement. The frequently asked questions document on the Starbucks website notes that there will only be a “partial scholarship” for employees who have not at least achieved junior status (likely 60 credits earned). ASU Online’s tuition rates are between $480 and $543 per credit hour, meaning that credits taken at the local community college will probably be a fraction of the cost of the ASU Online credits after partial reimbursement. This means that students are less likely to use the Starbucks program for the first 60 credits, although the promise of future reimbursement may be enough to induce Starbucks employees to go back to college.
Discussion of ASU/Starbucks
On Friday, Arizona State President Michael Crow will discuss the university's new partnership on This Week @ Inside Higher Ed, our weekly audio newscast. Click here to find out more about This Week or here to sign up for an email link to each program.
Students are not reimbursed until they complete 21 credits. This policy was designed in order to encourage completion, as the goal is to motivate students to continue their studies until they are reimbursed. However, given the per-credit cost, a student not receiving any grants from the federal government would have to pay about $10,000 out of pocket (or borrow that amount) before being reimbursed. ASU Online recommends that students take two or three 3-credit classes during each 7.5-week class window, meaning that a continuously enrolled full-time student who started in August would probably complete seven classes by March or May of the following year. Students can also qualify for reimbursement by enrolling part-time, but they may take two years to complete the 21 credits necessary for reimbursement. This also provides a strong incentive for students to stay at Starbucks to claim the benefit, which can limit their mobility as employees but may be worthwhile given the potential value of the benefit.
The delay between paying tuition and fees and being reimbursed introduces substantial risk for students. A student who is willing to pay up to $10,000 and get reimbursed later only if successful likely has a higher tolerance for risk, is more willing to borrow, and is more likely to complete courses than a student who is hesitant to participate in the program. This means that the Starbucks employees who participate in the program as currently constructed are probably from higher-income families with more social and cultural capital — potentially minimizing the social mobility the program offers. Reimbursing students after each successfully completed course would help mitigate this risk and reduce the amount of money students have to pay upfront.
Reimbursements by Starbucks take place after other grant aid is applied, making the company’s contribution smaller. Students are required to file the Free Application for Federal Student Aid (FAFSA) in order to participate in the program and any grant aid received will be applied before Starbucks makes its contribution. Consider the case of a student with a zero expected family contribution, representing the greatest level of financial need, who enrolls for 12 credits in a semester. Her tuition at $500 per credit would be $12,000 for the academic year. She is eligible for the maximum Pell Grant of $5,730 in the 2014-15 academic year, which is applied before any aid from Starbucks. This leaves $6,270 uncovered by the Pell Grant, but Arizona State is offering scholarships of $4,840 per year to all Starbucks employees. The resulting $1,430 would be paid by Starbucks if the student didn't receive any other grants or scholarships. This is an admirable contribution, but most of the burden of financing the student is not on Starbucks.
Online education may not be right for everyone, yet it is the only option funded. It is far easier for Starbucks to work with one college than hundreds for administrative purposes. However, the lack of choice in the program may not be best for all students. ASU Online does offer about 40 majors, but they are all online — and research suggests that online courses may not work as well as face-to-face courses for students from lower-income families. While I don’t know enough about ASU’s programs to pass judgment on their quality, some students may not be interested in enrolling online even if the quality is high and the cost to the student is low.
All of these factors suggest that the percentage of Starbucks employees who successfully complete a bachelor’s degree as a result of the tuition reimbursement program will be fairly low. Starbucks should be commended for offering this benefit to its employees, but policymakers shouldn’t expect this program to substantially move the college completion rate dial in its current form.
Robert Kelchen (@rkelchen) is an assistant professor in the department of education leadership, management and policy at Seton Hall University. He blogs at Kelchen on Education. All opinions are his own.