Making college not only more affordable but also actually free for everyone has been the subject of much recent debate in Washington, in the national news and on the presidential campaign trail. While a wonderful concept in theory, such a proposal would be all but impossible in practice, given today’s political climate and the massive growth in government spending that a truly free college plan would require. What’s more, these ideas distract from the work we can and should be doing to strengthen an existing federal program that already makes college free, or mostly free, for many low-income students: the Pell Grant.
With a current maximum award of $5,775, Pell Grants cover virtually full freight at most community colleges and, when combined with need and merit-based institutional aid, can make a sizable dent in the bill at most public four-year schools, too. But while more than eight million low-income students used some form of the program last year alone, millions more never even knew it was an option.
That disconnect is troubling for many reasons, not least of all because it means our poorest students are leaving money on the table. And in some cases, the perceived lack of affordable options could deter them from applying to college at all.
President Obama’s recent executive action allowing students to file the Free Application for Federal Student Aid earlier in the year will help address these concerns. In fact, the change is projected to add as many as 50,000 new students to the Pell Grant ranks once implemented next fall. And yet we know more than two million students every year could qualify for federal financial aid but never even apply, including roughly 1.3 million students who would be eligible for the maximum Pell Grant.
Clearly, we in higher education need to do more work to ensure low-income students understand their full range of college and financial aid options. Our organizations are both grounded in the belief that, when it comes to college access, better information yields better outcomes. It’s the reason we teamed up in November to promote the Thankful4Pell campaign, a coordinated effort that brought students, educators, advocates and policy leaders together to raise awareness about the availability and importance of Pell Grants. But we also recognize that, without the necessary federal resources, our work to make the financial aid process easier to navigate can only go so far.
Unfortunately, the portion of college costs fully covered by Pell Grants is shrinking. While that is largely due to rising tuition rates and deep funding cuts to higher education budgets at the state level, it can also be attributed to stagnating support at the federal level. For proof, we need look no further than the most recent spending plan of the Budget Committee of the U.S. House of Representatives, which sought to freeze Pell funding for the next 10 years.
The good news is that as lawmakers begin to consider the reauthorization of the Higher Education Act this year, it will provide an important opportunity for strengthening and fortifying the Pell Grant system. From a college access perspective, efforts to insulate the program from the increasingly frequent volatility of partisan budget fights by authorizing mandatory funding would be a key step forward. Equally important, Congress should work to address the challenge of shrinking grant-to-tuition ratios by tying award amounts to the consumer price index, just as we do with Social Security benefits. That would provide some much-needed predictability around grant levels, not to mention increased purchasing power for students.
Finally, efforts to make Pell Grants available year-round have garnered strong bipartisan support, including the backing of President Obama and the U.S. Senate Health, Education and Labor Committee chairman, Lamar Alexander (R-Tenn.). Legislators should seriously consider these grants as a means of increasingly flexibility for the growing number of students taking classes outside of the standard fall and spring semesters.
For more than four decades, Pell Grants have allowed tens of millions of poor Americans to access the economic opportunity and personal empowerment that only a college education can provide. They are the original “free college” plan, and that’s something we should all be working to preserve.
Abigail Seldin is the co-founder of College Abacus and vice president of innovation and product management at ECMC Group.Kim Cook is the executive director of the National College Access Network, a nonprofit organization.
Submitted by Ben Miller on February 24, 2015 - 3:00am
Seemingly from the day it was created in 1992, the Free Application for Federal Student Aid, or FAFSA, has been a popular target for reform. The Obama administration shortened the time it takes to finish the form by two-thirds and created an automated tool so families can import their tax data. And now there’s a competition to see who can drop more of the FAFSA’s 105 questions. The president’s latest budget targets 30 questions for removal, while a bipartisan group of senators led by Lamar Alexander, the Tennessee Republican now in charge of the committee that covers higher education, wants to go even farther -- shortening the FAFSA to just two questions that could fit on a postcard.
Making the FAFSA less of a burdensome impediment to financial aid receipt and reform is a laudable goal. But the obsessive “who can go lower” approach to simplifying the FAFSA is misdiagnosing the disease. FAFSA’s problem is not its length -- it’s the frequency that it’s required.
Reducing the number of FAFSA questions gets at a very specific problem -- the annual burden associated with completing the form. Doing so would free families from the yearly process of digging up complex tax, asset and other income data.
But as Michael Stratford discussed recently in Inside Higher Ed, removing FAFSA questions comes with its own set of concerns. In particular, colleges and most states do not have unlimited entitlement funds for financial aid, so they want as much data as possible, in order to vary the price charged to students to a degree that would make the airlines jealous. Take away that data by bringing the form down to two questions and you may just drive the creation of additional forms like the dreaded and expensive CSS Profile.
Fortunately, there’s a middle path that accomplishes the goal of reducing burden while still giving colleges and states the data they need to make nuanced decisions: a one-time FAFSA.
Since students would still fill out a detailed form, colleges would have the data they need to parcel out resources. They just would not have new information to do so year after year.
For students, the FAFSA would become more like any other part of the college application process, which is full of one-time submissions like essays and transcripts. This includes the Department of Education’s master promissory note, which only needs to be filled out once to receive federal student loans. And it would reduce the chances that students would lose financial aid solely because they failed to reapply the following year -- a problem that professors Sara Goldrick-Rab and Robert Kelchen identified in a post on a similar proposal in 2013.
What families and students would get in return for this one-time burden is something that could never be earned in any annual application process, regardless of length: predictability. Few students entering college have any idea what their financial aid might be beyond the first year. And they will not know for sure until they actually apply for aid again. A shorter form can help families more accurately predict what they might receive -- but it’s still an estimate, not a given.
A one-time FAFSA would make it possible to promise a student on day one what their aid package would look like for the rest of their undergraduate career. Families could use that information to budget and plan for costs in a way they cannot today. It could also be a huge help for low-income students considering different college options, since they would know exactly what support they could count on from the federal government at the same time they submit applications.
Only requiring the FAFSA a single time is a required step for many proposals for reforming federal student aid. For example, House Republicans proposed last year to create a flex account for Pell Grants. Students would be told upon entering college the total amount of Pell aid they are entitled to throughout their whole education and then would be allowed to spend it down as they took classes. It’s an intriguing idea that could send a strong message to students about just how much money they can get for college. But it’s also an empty promise for students under the current system, since the account balance would have to be recalculated each year.
Many of the most common objections to a one-time FAFSA could be addressed with simple tweaks. For example, it should pull in multiple years of older data so families cannot manipulate their income for a single year to appear poorer and get better aid. Students who see significant downward financial changes, such as a parent losing a job, could either follow the existing process of appealing to the financial aid office or refile for federal aid. And while it would be better to worry less about the unlikely cases that students see massive income increases, a threshold test could be added to only require new FAFSAs if income went up by very large dollar amounts, such as $20,000.
More broadly, moving to a one-time FAFSA system sends a message of simplicity and flexibility that extends far beyond paperwork. It makes the financial aid system less about obsessing over one's ability to pay in a single year to a longer-term assessment of financial circumstances that are probably not changing a great deal on an annual basis anyway. It builds in a tolerance for some income growth without making families go back through the hoop-jumping process. And in a world where tuition increases are an annual uncertainty, it could be a welcome source of predictability for students.
If the goal of financial aid simplification is really to make the process easier and more predictable for students and families, then the emphasis should be predictability, not a postcard.
Ben Miller is the higher education research director at New America.
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.