Pell Grants: Glass Half Full

June 1, 2009

President Obama’s avowed goal is to provide an “education so that every child can compete in the global economy,” and in so doing to restore the United States’ leadership role by having the highest proportion of college graduates in the world by the year 2020. He’s recognized that one of the mechanisms necessary to achieve that is to transform Pell Grants into an entitlement.

The Pell Grant program is the sine qua non of equal educational opportunity. It represents one of the most important mechanisms developed in higher education to ensure low-income students are afforded financial access to postsecondary opportunities. By all accounts, Pell Grants historically have contributed to allowing millions of low-income students unparalleled access to higher education in the last four decades, and yet they have been vulnerable to funding shortfalls and their value has frequently lagged behind college cost increases. Therefore, proposing to make the Pell Grant an entitlement is a smart step by the Obama Administration. This constitutes a much-needed, long-overdue reform.

However, unless the administration changes course, it is likely to squander this terrific opportunity for the United States to boost both its academic and economic competitiveness. The administration risks compromising this critical investment in human capital by failing to dramatically enhance investment in college retention and completion.

So the president’s reform measure, as it now stands, resembles nothing so much as a doctor’s prescription to treat a complex condition — in this case, barriers to postsecondary access and attainment — with a single medication. In isolating an important and necessary pre-condition — the provision of financial aid — but failing to consider other dimensions of this phenomenon, the treatment is doomed to failure.

Unless and until the administration addresses the full spectrum of causes, it will not achieve its goals. And until it takes a holistic approach to student aid, its enormous investment in Pell Grants will not be fully leveraged.

Simply put, the Obama administration’s definition of student aid is far too narrow. What is desperately needed instead is a more comprehensive view of student aid that reflects the recognition that low-income and first-generation students face multiple barriers — class, cultural, informational, academic, and social — to postsecondary education, and not just a lack of funds. Merely providing financial resources through mechanisms like the Pell Grant alone will not solve the problem of getting first-generation and low-income students through college. Congress recognized this more than a quarter of a century ago in the Education Amendments of 1980 when it proclaimed the principle that the TRIO programs were “an integral part of the student assistance programs aimed at achieving equal educational opportunity.”

“Without the information, counseling, and academic services provided by the TRIO programs,” the House Report went on to say, “disadvantaged students are often unable to take advantage of the financial assistance provided by the other Title IV programs, and more importantly, such students do not develop their talents by gaining access to postsecondary educational opportunities and completing a course of study once they have embarked on it.”

By investing in financial aid but not providing increases for TRIO and GEAR UP, the Obama administration is failing to raise the aspirations of low-income students and to equip them with the tools necessary to persist in their studies and, ultimately, achieve college degrees. Thus we have to conclude that in this budget, the Administration is, perhaps unwittingly, undermining its own policy goals.

There is ample evidence that financial aid alone has never been and can never be the “silver bullet” to guarantee educational opportunity. And the public investment in Pell Grants has grown so large that there is a real liability to taxpayers unless it can be properly leveraged. In fact, just over the last eight years, Pell Grants have seen a 214 percent increase in funding (from $8.8 billion FY2001 to $18.8 billion in FY2009).

Looked at another way, in constant terms, funding for Pell Grants in the last three decades has grown by 143 percent. Yet the disparity in bachelor’s degree attainment rates between students from the top and bottom quartiles of family income has nearly doubled since 1970, according to Tom Mortenson in “Family Income and Higher Education Opportunity, 1970-2006."

Through a comparison of college completion rates of Pell recipients who did and did not receive support services, we know that Pell Grants alone do not suffice to retain low-income and first-generation students. Data from the U.S. Department of Education show that six years after beginning a postsecondary program, students who have participated in TRIO Student Support Services have a higher rate of earning a baccalaureate degree (30.9 percent) than other low-income college students, regardless of whether they received (21 percent) or did not receive (8.9 percent) Pell Grants.

Yet the president’s budget continues the pattern of previous years of level funding. Funding for TRIO and GEAR UP programs that provide such vital supports to low-income and first-generation students has essentially been flat for the last seven years. By virtue of this stagnant funding as well as rising costs, TRIO programs serve 25,000 fewer students now than in 2003.

Here’s what we know for certain: This year, an estimated 1.6 million low-income students will begin their pursuit of a postsecondary degree. If previous trends continue, only 176,000 of these students will earn a baccalaureate within the next six years. And if the president’s budget proposal is enacted, about 20,000 students already in college will lose support services, thus increasing the likelihood that they will fail to earn degrees.

Is it possible that President Obama is ignoring his campaign promise to support TRIO, GEAR UP, and the first-generation and low-income students the programs serve across the country? During a May 2008 speech in Denver, then-candidate Obama said the key to improving the lives of American families was to “expand college outreach programs like GEAR UP and TRIO.” If these “promises” are to become reality, President Obama must act decisively to assume responsibility for students’ success now. America simply does not have time to “wait and see” while the futures of hundreds of thousands of low-income students hang in the balance. Their futures are our own.


Arnold Mitchem is president of the Council for Opportunity in Education.

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