Gaps in Success for Pell Grant Students

Report sheds light on how well aid recipients fare at individual colleges, showing in some cases significant disparities among Pell and non-Pell students within a campus and across similar campuses.

September 24, 2015

The University of Alabama and Michigan State University look pretty similar on paper.

Both are selective public research universities. Students enter with similar standardized test scores. And the proportions of low-income and underrepresented minority students on each campus are roughly the same.

Yet students who receive a Pell Grant to attend Michigan State are far more likely -- by 20 percentage points -- to graduate within six years compared to their counterparts at the University of Alabama flagship campus at Tuscaloosa, according to a report published Thursday by the Education Trust, an advocacy group for low-income students.

Andrew Howard Nichols, the group’s director of higher education research and data analytics, compiled and analyzed information on how well Pell Grant recipients perform at 1,500 public and private nonprofit colleges; no for-profit colleges were included in the study.

Still, it is among the most comprehensive looks at how Pell Grant recipients fare at specific colleges and universities. Policy makers and the public have long been in the dark on such information because a 2008 law required colleges to disclose their own Pell Grant graduation rate to prospective students but not report it to the government.

The Obama administration over the past several years made changes to the Education Department’s data systems to improve tracking of whether Pell Grant recipients graduate from a college. But it still has had to turn to external data sources in some cases. (An earlier version of this story incorrectly said that the department used data from the National Student Clearinghouse to produce Pell Grant completion rates on its Scorecard; in fact the department only used such data to compare the accuracy of federal data.)

The Education Trust report gathered Pell Grant data from state higher education systems and also purchased data that colleges report to U.S. News & World Report for ranking purposes.

Among the report’s key findings is that colleges that serve similar student populations can have “wildly” different outcomes for Pell Grant recipients -- like Michigan State’s 72 percent graduation rate for Pell Grant students compared to Alabama’s 52 percent.

Such disparities “provide evidence that institutional performance isn’t simply a by-product of the entering class institutions enroll,” Nichols writes. “The decisions leaders make regarding curriculum, instruction, financial aid, and academic and social support services have a far-reaching impact on students, particularly those from low-income families.”

Beyond differences in graduation rates for Pell Grant recipients among similar institutions, the report also shows gaps on the same campus between how frequently Pell Grant recipients graduate compared to their non-Pell peers.

Nationally, the six-year graduation rate for Pell Grant students at the colleges in the report was 51 percent compared to 65 percent for non-Pell students, a 14-point gap.

But compared to their non-Pell peers on the same campus, Pell Grant recipients lagged behind in graduating by an average of 5.7 percentage points, which the report calls a “much more positive” story. However, gaps on individual campuses vary significantly and in some cases are “egregious,” the report says.

Of the 1,500 colleges included in the study, more than one-third had virtually no gap (3 percentage points or less) in the graduation rates between Pell Grant recipients and their non-Pell peers. But roughly another third of institutions had completion gaps that were greater than 9 percentage points.

But even if all colleges in the report were to suddenly graduate Pell Grant recipients at the same rate they do their other students, that wouldn’t be enough to overcome the overall lag in Pell Grant recipient rates nationwide. For example, Pell Grant students might graduate at the same rate as every other student at a campus, but if that college's overall rate remains low, those Pell Grant recipients will not catch up to their non-Pell peers nationally, many of whom attend colleges with higher graduation rates.

That’s because, as Nichols writes in the report, “too many Pell students attend institutions where few students of any sort graduate, and too few attend institutions where most students graduate.”

The solution, he says, is that “colleges with large gaps need to do more to ensure low-income student success, and more selective institutions should open their doors to more Pell students.”


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