Students received some good news in the 2017 budget agreement unveiled Sunday night: the return of year-round Pell Grants. As early as this summer, this provision should help hundreds of thousands of low-income students finish college by giving additional grant aid to those who want to catch up on or accelerate their studies by attempting additional course work -- such as taking summer courses.
This change also gives the U.S. Department of Education a second shot at implementing year-round Pell Grants. Congress previously approved year-round Pell Grants in the 2008 reauthorization of the Higher Education Act, only to take them away three years later due to funding shortfalls in the program and unfair claims that the program was ineffective.
The second chance for year-round Pell Grants also means a new opportunity for the Department of Education to get implementation right this go-round. Although the prior version of year-round Pell Grants lacked the fundamental design errors that critics have previously claimed, it did have certain elements that made the program more complex to administer, especially for financial aid administrators. This is also another chance to collect data on usage and effectiveness, which would help combat other myths that helped make the last iteration an acceptable cut when the Pell program needed more money.
With the goal of easy implementation in mind, here are three important parts of establishing a year-round Pell program that should make it operate more smoothly this time.
Don’t Count Credits Earned
One complication of the original year-round program was a requirement that students had to use the additional aid to “accelerate” their path to program completion. In other words, students could only get additional aid if they were attempting credits that counted toward a second academic year.
That was potentially problematic because of the disconnect between what it means to be full-time for federal aid and the number of credits a student needs to advance an academic year. Federal aid requires attempting 24 credits or their equivalent to go full-time. But most colleges require 30 credits in a year to advance an academic year. The old definition thus excluded year-round Pell Grants from a key population -- students who wanted to fill the credit gap between federal and school requirements.
The statutory language in the new rules for year-round Pell, however, does not include acceleration. As such, the Department of Education should ensure that the new grant follows as simple a path as possible: additional aid for students if they are going half time and meeting satisfactory academic progress, as required by law.
Admittedly, this approach will increase the number of students eligible for the additional aid, raising costs and meaning more students will use part of their lifetime limits in the program faster. That is why institutional rules on satisfactory academic progress matter so much. Those requirements prevent students from continuing to get federal aid if they are not moving fast enough toward completing a program. Enforcing academic progress rules should stop year-round Pell payments to students who are not otherwise passing enough courses. Colleges can also deal with this issue by providing better guidance and pathways for students to finish before using all their Pell eligibility.
Let Colleges Pick the Award Year
The original year-round Pell Grant created headaches for financial aid administrators in part due to requirements about which year an additional award should be assigned to if it took place over the summer. Institutions treat the summer session differently. Some act like it is the start of a new aid award year (e.g. summer 2017 is the beginning of the 2017-18 award year), while others act like it is the end of the current year (e.g. summer 2017 is the end of the 2016-17 award year).
The original year-round Pell Grant required colleges to award the additional aid to the year that provides the most generous grant for students. In other words, if a student’s 2017-18 award under year-round Pell would be $1,000 and in 2018-19 it would be $999, then the grant had to be assigned to 2017-18.
While generosity to students sounds great, the requirement created implementation headaches: colleges could not adopt an institutionwide policy about how to assign awards. It also might have required institutions to get students to submit aid applications they had not yet completed.
The new legislative language allows each institution to pick the award year that it determines is most beneficial to students. In implementing this provision, the Department of Education should provide colleges with ample discretion to figure out which financial aid year would be more beneficial. Students, meanwhile, should be able to appeal the award through standard financial aid processes in the likely limited number of cases where a student’s economic circumstances change or they believe they would get more money.
Collect and Report Data
Insufficient data and reporting on the original year-round Pell Grant program made it impossible to refute or verify certain persistent myths about the additional awards. For example, when the Obama administration proposed eliminating the program in its fiscal year 2012 budget, it did so partly on the grounds that the provision “has not yet shown any evidence of accelerating students’ college completion time.” Though subsequent studies have challenged that point, the Education Department never published sufficient data to judge whether year-round Pell Grants worked.
Similarly, the extent to which different institutions made use of year-round Pell Grants was never clear. Bloomberg, for example, cited Department of Education statistics showing that nearly one-third of year-round Pell Grant dollars went to for-profit colleges. But the department never provided any clarifying data to show whether that represented a disproportionate share of students who take additional course work, or how these students fared compared to those in other sectors.
Now is the time to fix these problems. The Department of Education should commit to collecting and publishing data about year-round Pell volume separate from standard Pell Grant awards by institution. It should also work with the Institute for Education Sciences to assess the progress of year-round Pell students to see if the additional grant aid helps with time to completion or gets students back on track to finish.
Second chances are a rare occurrence in policy programs. The return of year-round Pell is a welcome win for today’s students. Now it’s up to the Department of Education to make swift and sensible implementation choices so that students can start receiving this aid as soon as possible. Summer is not all that far away.