'Rethinking Pell Grants': Group Suggests Separate Pathways for Younger Students and Adult Learners

April 09, 2013

During the economic downturn, the Pell Grant program, the government's main support for needy college students, got more expensive, and at the same time President Obama called for more Americans to earn a postsecondary credential.

Now, with scrutiny of federal programs strong and Congress expected to take up the reauthorization of the Higher Education Act next year, a group of experts is proposing a new approach for the Pell program: creating separate pathways to promote social mobility for younger students and job training for adult learners.

The idea comes after two years of discussion led by Sandy Baum, a senior fellow at George Washington University's School of Education and Human Development and an independent higher-education-policy analyst. The group's report, "Rethinking Pell Grants," was financed by the Bill & Melinda Gates Foundation and the Lumina Foundation, and was released by the College Board on Tuesday.

At first, the group of 14 experts—who also included Bridget Terry Long, a professor at the Harvard Graduate School of Education, and Donald Saleh, senior vice president for enrollment management at Syracuse University—did not expect to reach a consensus, but instead to make several broad proposals, said Ms. Baum. In fact, they quickly agreed on the two distinct pathways, she said.

It's well understood that so-called traditional students are no longer typical in American higher education. As for the Pell program, in the 1970s, its early days, about 60 percent of recipients were dependent students, meaning their eligibility for aid was based on their parents' financial strength. The rest of the recipients were independent students, whose parents' finances were not considered because either the students were 24 or older, or they met other criteria, such as being active-duty service members or military veterans.

Today those shares have flipped, with 60 percent of Pell Grant recipients now independent students.

Low-income students who go to college right out of high school and low-income adults are two very different populations, said Ms. Baum. Many people think of Pell Grants as going to those in the former group, with the program opening campus gates to students whose families can't pay for college.

Meanwhile, the many adult learners the program serves tend to come to higher education with distinct goals and needs. A considerable number are looking for short-term educational programs that will lead to a better job. Many continue to work while they attend classes. And quite a few have families to support.

The Pell program should recognize those different groups with two avenues, to support each population of low-income students, the group decided. At the same time, the experts felt strongly that both paths should remain part of the same program. Pell continues to have broad bipartisan support, and spinning off one pathway into a separate program, they thought, could invite Congress to cut support for that program.

Today the Pell program provides $34.5-billion in grants to some 9.4 million students. As the program has grown more costly, some of its advocates have worried about its sustainability.

Traditional-Student Pell

To ensure that the needs of both populations identified in the report are well served, the group came up with "Pell Y" for younger students and "Pell A" for adult students.

As proposed, Pell Y would be available to students 24 and younger, marking a slight shift from the current dividing line, under which 24-year-olds are considered independent. For most students, grant eligibility would be simplified, based only on their families' size and adjusted gross income, rather than the opaque and complex formula used now.

Prospective students would be able to look up their grant eligibility in advance, and those whose families received certain federal benefits, such as Temporary Assistance for Needy Families or Section 8 housing, would automatically qualify for the maximum Pell Y award. Financial information, which many families now fill in themselves, would be pulled directly from the Internal Revenue Service. And the maximum grant, now determined at Congressional discretion, would be raised annually by the increase in the Consumer Price Index plus one percentage point.

Under the group's proposal, students would be able to get Pell grants for all enrollment sessions, meaning that students who used them for the fall and spring semesters would still be eligible over the summer, which they now are not. And students who took more credits would be able to get larger grants, whereas now everyone taking at least 12 credits is treated the same way.

To supplement the grants in paying for college, Pell Y students would also benefit from a federal college-savings program for low-income families, the group said, with accounts opened for children when they were 11 or 12 years old.

Adult-Learner Pell

While Pell has become a key resource for adults pursuing job training, the group said, the program wasn't designed with that use in mind. Nor have experts considered it much, said Ms. Baum. "We'd thought about student aid without thinking about work-force development."

So the group suggested creating Pell A grants to serve that purpose. For adult students, grant size would not be determined by the current federal financial-aid formula. Instead, based on students' income over the previous few years, they could qualify for a full or a half grant. That eligibility would be multiplied by the number of academic credits the student was taking to determine the total amount of his or her grant award.

The group's proposal would require Pell A recipients to go through counseling at the One-Stop Career Centers provided through the Workforce Investment Act.

Because Pell grants cannot financially sustain adult students' families, the experts said, those students should have access to supplemental programs. The report suggests that the federal government work with states to give adult students access to the same income-support programs available to low-income workers.

The experts also recommended using federal money that now goes to campus-based aid programs, such as Federal Work-Study, to reward institutions that do a good job of serving low-income students.

Discussion of Pell Grants often focuses on how much money Congress approves for the program. The group intentionally avoided getting into that at all. Instead, the experts wanted to take a step back and ask if whatever money is spent on Pell could be used more effectively.