Pushing on Pell

The Obama administration wants to bring back year-round Pell Grants and create a $300 bonus for Pell recipients who take at least 15 credits per semester.

January 19, 2016

The Obama administration wants to expand the federal Pell Grant program by bringing back year-round eligibility for the grants, which was eliminated four years ago, and by creating a $300 annual bonus for Pell recipients who take at least 15 credits per semester.

The two proposed changes announced today would cost $2 billion in the next fiscal year, the U.S. Department of Education said. Both would require approval by the Republican-led U.S. Congress, which will be a tall order for the White House.

However, the push to restore so-called year-round Pell recently has picked up some bipartisan backing. It has a chance of returning this budget season, said supporters of the plan.

“This proposal will provide nearly 700,000 students next year who are making real progress toward on-time graduation with an additional $1,915 on average to help pay for college and complete their degrees faster,” the department said in a written statement.

Currently, low-income students who attend college full time and receive Pell Grants often run through the maximum annual grant amount within two semesters, leaving no Pell money for summer courses. President George W. Bush and Congress in 2008 created a fix for that problem, by allowing students to access Pell Grants for the following year to help pay for summer courses.

That eligibility lasted three years. The Obama administration, with bipartisan backing from Congress, cut year-round Pell in 2011. The White House said the annual appropriation had become too expensive. Its elimination was defended as a necessary sacrifice and a way to protect Pell recipients from having their maximum award amounts slashed.

Many in the higher education lobby, particularly private colleges, were willing to see year-round Pell go -- at least quietly -- if it meant avoiding cuts to the then $5,550 maximum award. Advocates for community colleges and public four-year institutions were livid, however. Those two sectors enroll the most low-income students who benefited from year-round eligibility.

Congressional Republicans typically aren’t allies of increasing spending on Pell. But there is some Republican support for the restoration of the year-round version. For example, Senator Lamar Alexander, the Tennessee Republican who leads the Senate’s education committee, has introduced legislation to bring it back. Senator Michael Bennet, a Colorado Democrat, co-sponsored that 2014 bill.

"We have long supported providing students a more flexible Pell Grant program and hope this is one of many areas Congress and the administration can work together to strengthen higher education," said a spokesperson for the Republican leadership of the U.S. House of Representatives' education committee. "We look forward to reviewing all the details of the president's proposal and will work to ensure these reforms don't add new costs on taxpayers or jeopardize the long-term health of this vital program."

The White House’s new proposal closely mirrors the original year-round Pell, which has broad, bipartisan support, said David Baime, senior vice president for government relations and research for the American Association of Community Colleges.

“It is also something that we strongly support because it will help students stay enrolled and graduate faster,” Baime said in an email, “and many would-be year-round programs were derailed by the loss of the year-round Pell.”

The program would not be as expensive as it was in 2011, according to the department. That’s because Pell Grant spending over all spiked during that time, due in part to the recession. (The federal government spent $22.8 billion on Pell in 2014.) And some supporters of bringing back year-round Pell have argued that not enough budget information about the new eligibility was gleaned to see how expensive it might be.

“This is a common-sense idea whose time had come in 2008,” Baime said.

Federal 15 to Finish

As has been the case with year-round Pell in previous years, the proposed $300 bonus for Pell students likely will be divisive within higher education.

Some college completion advocates say offering students incentives to attend college full time can boost graduation rates. The Obama administration concurs, saying a $300 addition to the maximum Pell Grant award for students who take at least 15 credits per semester would help an estimated 2.3 million students “stay on track” or accelerate their progress to graduation.

“The bonus would encourage students to take the credits needed to finish an associate degree in two years (60 credits) or a bachelor’s degree in four years (120 credits),” the department said. “Finishing faster means more students will complete their education at a lower cost and likely with less student debt.”

Complete College America has been a supporter of similar policies, which the nonprofit calls “15 to finish” strategies. The group, which receives a good chunk of its funding from the Bill & Melinda Gates Foundation, has advocated for 15-credit incentives at the state level.

Stan Jones, president of Complete College America, said the administration’s proposals were a step in the right direction.

“Our data shows that students who take at least 15 credits per semester are more likely to complete, and Pell should reflect this reality,” Jones said in a written statement. “Efforts to incentivize students to take 15 credits per semester or 30 credits per year would not only make this a better investment for the federal government, it would show a true commitment to boosting graduation rates.”

Complete College America has backed statewide campaigns in Hawaii and Indiana to encourage more students to take 15-credit course loads.

That approach, however, has drawn fire from some community college leaders and from some advocates for adult students, who say 15 credits can be too many, particularly for students who work or are unprepared for college-level work.

Tom Snyder, president of Ivy Tech Community College, which is Indiana’s statewide system, is a critic of 15 to finish. He argued in a 2014 opinion piece for The Huffington Post that 15 credits is not a good fit for everyone.

“While I applaud any effort designed to help students get a degree, I know from experience that 15 to finish will not work with nontraditional students attending community colleges,” Snyder wrote. “In fact it might hurt many students. Students who are 25 or older often have families and need to work full time while attending college.”

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