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Pell Grants Suffer a Serious Setback

New Eligibility Requirements Are Counterintuitive and Counterproductive

SOURCE: Center for American Progress

College students walk to class in this stock photo. Many will be affected by the Pell Grant setbacks.

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Last week congressional leaders agreed to a $1 trillion compromise that avoided another threatened government shutdown. But what this latest negotiation actually compromises is the future of many hard-working students who are struggling to complete their educations and put their best foot forward in one of the worst economic climates this country has experienced.

The Pell Grant program in particular took a significant hit in this latest round of negotiations. The House Fiscal Year 2012 appropriations package includes a six-year time limit on grants that will effectively prevent thousands of students from ever receiving another Pell Grant, even if they are currently only one or two semesters away from graduating.

Despite the fact that we know that recipients of the Pell Grants are disproportionately concentrated at institutions that prioritize the education of low-income students of color and that a college education has time and time again been shown to improve an individual’s chance in the job market, the program was ruthlessly targeted for cost-saving measures. Given that unemployment is at a record high, particularly for youth of color, with African American youth at 30 percent and Latino youth at 20 percent, this is precisely the time we should be investing in the Pell Grant program instead of cutting students off at their knees. Let’s look in more detail at the proposed cuts to show just how unproductive they would be if enacted.

Proposed cuts

Back in September the House leadership suggested a series of harmful cuts to the Pell Grant program that would eliminate grants for about 1 million students, mostly through changing rules for student eligibility requirements. This latest round thankfully avoids many of those changes, but it still includes lowering the grant time limit from nine years to six years, which harms some of the most vulnerable students.

In its bill for FY 2012, the House Appropriations Committee proposed $3.6 billion in cuts that would strip up to 1 million students of Pell Grants that proved vital in helping them afford higher education. These cuts were exacerbated by the House Budget Committee’s needless decision to change Pell scoring rules—the rules that determine how much funding Congress is required to enact—which forced appropriators to cut an additional $896 million.

While the Obama administration already passed some positive measures in the Pell Grant program, most notably preserving the current maximum award level at $5,550 and saving $300 million by reducing errors in payment, these changes in eligibility requirements will be a definite setback for the program. After all, who are these students who need on average seven or more years to complete their degree?

According to the Institute for College Access & Success, African American students would be disproportionately affected by the immediate six-year time limit. Though comprising just 24 percent of all Pell Grant recipients, African American students make up 41 percent of recipients working toward a degree after six years. At a majority of historically black colleges and universities in particular, two-thirds or more of all enrolled students receive Pell Grants, with more than 90 percent of students receiving grants at eight such institutions of higher learning.

The lower time limit would also disproportionately affect students at four-year public and nonprofit colleges (61 percent) and transfer students, and it fails to exempt any time for remedial coursework taken in preparation for college-level work.

Effectively, this means that students who are working hard to complete their degrees, despite simultaneously managing other responsibilities, would be penalized for taking courses that are necessary along their path to completion. Given that the eligibility cuts apply to all students as of July 1, 2012, this would immediately limit student access even if students are already enrolled—even if they are just one semester away from completion.

Students who usually need longer to complete their degrees are not twiddling their thumbs while delaying their graduation. They are being penalized despite evidence pointing to the contrary—that they are hardworking and attempting to complete their education in the face of odds against them. For instance, a 2009 National Center for Education Statistics report profiled typical Pell Grant recipients:

  • 60 percent were considered financially independent.
  • 24 percent had dependents of their own.
  • 11 percent were single parents.
  • 34 percent delayed their enrollment in postsecondary education for one or more years after high school.
  • 58 percent left college or career school for four or more months and later returned to complete a degree at either the same school or a different one.

While Pell Grant recipients typically take longer to compete a bachelor’s degree than their counterparts who did not receive a grant, a closer look at the data demonstrates that a Pell Grant was actually associated with a shorter time to degree completion once many undergraduate risk factors common to the Pell Grant population—transferring, stopping out, and having parents who did not complete a degree—are taken into account.

Additionally, while it may be a constructive goal to want to move students through college more quickly, this change to the program assumes that it’s a student’s choice to attend school for more than six years.

Instead, there is ample research demonstrating the fact that a poorly functioning education system may be at fault—particularly when many colleges refuse to accept transfer credit, which results in many students taking more time than they would otherwise need to complete their degree.

The Pell Grant program was established to provide need-based grants to low-income students, so it seems particularly counterintuitive for new eligibility requirements to punish those students who often take longer to complete their education because they are simultaneously making sure their families have enough food on the table. Considering one of the main obstacles to college completion is affordability, eliminating resources for students who seem determined to finish their education seems to defy the fundamental premise of such a federal program.

Counterproductive cuts

The new eligibility requirements are not only counterintuitive but also counterproductive. We know that educational attainment is correlated with lower rates of unemployment: The 2010 unemployment rate for high school graduates with no college education was 10.3 percent but was just 4.7 percent for those students with a bachelor’s degree or higher. Research also shows that Pell Grant recipients tended to have higher aspirations for graduate school enrollment in the future, if they were not already enrolled, indicating that this student population is ambitious on the whole and should not be penalized for taking longer to complete their education.

In an economic climate where more students will need a good education to be competitive in the international economy, cutting student access to this aid is counterproductive to our country’s economic growth. Moreover, as our country shifts to become a majority-minority nation throughout the next three decades, our future workforce will be mainly workers of color. Aid programs that are shown to disproportionately assist in their education will become even more important to preserve, not eliminate.

Julie Ajinkya is a Policy Analyst for Progress 2050 and Sophia Kerby is the Special Assistant for Progress 2050 at American Progress.

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