Pell Proposal's Price and Politics

September 25, 2006

There is no contest: By far, college officials' favorite element of the final report of the Secretary of Education's Commission on the Future of Higher Education is its clarion call for a major expansion of need-based financial aid, specifically in the form of a huge influx of funds into the federal Pell Grant Program. When Secretary Margaret Spellings lays out her vision for how to carry out the panel's report in a speech on Tuesday, higher education leaders and lobbyists will be listening intently, among other things, for signals about how aggressively the Bush administration will pursue this goal.

In virtually all of their public comments to date, most recently Thursday's statement by the six leading higher education associations, college leaders have trumpeted the commission's Pell Grant recommendation, not least to keep up public pressure on administration officials and members of Congress.

But privately, more than a few say they are worried about whether the massive increase in Pell funds is realistic. And if it is not, they say -- either because the money won’t be there or policy makers' commitment to it is lacking – college leaders who endorsed the overall report (and the many tough requirements it would impose on higher education) might come to regret that support.

Some recent developments suggest that they might be right to be concerned.

Last week, for instance, the American Council on Education circulated an analysis estimating that the Spellings Commission’s recommendation to increase the average Pell Grant over five years so that it covers 70 percent of the the average in-state tuition at public four-year colleges (instead of the current 44 percent) would cost the government anywhere from $9 to $12 billion above the $13 billion it currently spends, depending on how much enrollment increases during that period.

Assuming no enrollment increase at all, just raising the Pell Grant’s “purchasing power” to 70 percent of in-state tuition would mean increasing the size of the average grant to $3,845 and the maximum award to $6,150, up from the current top grant of $4,050. That would cost an additional $9 billion a year. Assuming the 7.5 percent enrollment increase that the Education Department projects between 2006 and 2011, the costs would mount to $10.2 billion more a year. And if the availability of more need-based financial aid were to persuade more low-income students to pursue a higher education – resulting in a 15 percent increase in Pell Grant participation – the cost of meeting the 70 percent threshold would rise to $24.9 billion, the ACE analysis finds.

“Accomplishing this goal will, in short, require the largest and most sustained increase in federal funding for Pell Grants in the program’s history,” Melanie E. Corrigan, associate director for National Initiatives & Analysis at ACE, wrote in the memo. “The amount of money is considerable, but so is the opportunity,” she said, adding: “The impact of a much larger Pell Grant award for low-income students as called for in the commission’s report could easily have as profound an impact on our nation as the G.I. Bill did at the end of the Second World War.”

College leaders are almost certainly not using lofty language like that accidentally. Describing the commission’s proposal in grand terms may have the effect of building the public’s fascination with and support for the Pell increase and, in turn, turning up the pressure on policy makers to enact such an increase.

A Caveat From the Chairman

But the head of the Spellings commission, Charles Miller, sent his own signal last week that challenged college leaders’s rhetoric on the Pell issue. Commenting on the statement by the “big six” higher education associations about the commission’s work – which said that the groups “strongly support the bold recommendation of the Secretary of Education's Commission on the Future of Higher Education to increase the average Pell grant to 70 percent (from 48 percent in 2004-05) of the average in-state tuition at public four-year colleges” -- Miller warned that college leaders were reading the panel’s report selectively.

“There is a condition we laid that gets left out in the telling – and it is going to be an important one,” Miller said. “We made a conditional recommendation that Pell would have that increase over a period of time if there was a moderation in growth in tuition.”

Specifically, Miller noted, the paragraph in the commission's report that calls for the mammoth increase in Pell funds includes a sentence that says” [E]ven with significant additional federal investment, there is little chance of restoring the Pell’s purchasing power if tuition increases absorb most or all of the new money.” Two paragraphs later, the panel’s report describes as an “important benchmark” the idea that “the growth in college tuition not exceed the growth in median family income over a five-year period.”

As Miller sees it, then, the commission’s Pell Grant recommendation is directly tied to “the idea that tuition increases would be moderate over the period, like 3 percent,” he said. “The accuracy needs to be there – it’s the two things, not just the one. There has to be some understanding that if that kind of funding comes into the system, it has to be matched by success in keeping tuition low.”

Although the ACE analysis includes some recognition of the relationship between potential increases in Pell funds and tuition growth, college leaders, in embracing the commission’s proposal on the Pell expansion, have not necessarily seen the two as a quid pro quo. (The letter from the six associations did clearly state, as its second major point, that colleges must do more to keep college affordable.)

If Spellings and other policy makers accept Miller’s suggestion that a significant Pell increase should be dependent on colleges’ keeping their tuition increases to the rate of inflation, that could dampen the enthusiasm with which higher education officials have embraced the commission’s Pell proposal – and diminish even more their overall support for the panel’s work.

Another thing to listen for, perhaps, in Spellings’ speech Tuesday. 

Search for Jobs


  • Viewed
  • Commented
  • Past:
  • Day
  • Week
  • Month
  • Year
Back to Top