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The Pell Grant should be redesigned to cover a student’s living costs instead of an institution’s tuition and fees, a new report from the conservative Defense of Freedom Institution for Policy Studies suggests.
“If policymakers focused Pell Grants on helping low-income students cover their living costs, they would not only substantially lower the living-cost obstacle to college completion, but they would also remove the incentive for institutions to increase tuition,” wrote Arthur Hauptman, the report’s author and a consultant focused on higher education finance. “By the same token, this approach would require states and institutions to cover tuition for low-income students, as some already do.”
Hauptman wrote that the equity gaps in college access and completion persist in the current system, which doesn’t reflect how higher education has changed. Redesigning the Pell Grant would address both issues, he wrote.
“Since low-income students would no longer need to borrow to pay their living expenses, attending postsecondary education and training programs would become personally less financially risky,” he wrote. “That, in turn, would have a positive effect on persistence and completion rates.”
The changes also would target the Pell Grant investment toward the most disadvantaged students and could help to slow or reverse tuition increases, he wrote.
Hauptman recommended as part of the overall redesign that Congress expand tuition tax credits for middle-income families and replace the Free Application for Federal Student Aid with income tax returns from the prior year, among other changes.
