The Future of Pell Grants

A few days ago the National Association of Financial Aid Administrators held a welcome forum on “The State of College Access.”  The session was motivated by concern over the future of the Pell Grant program. Panels addressed “The Future Role of Federal Pell Grants” and “Beyond Pell – Other Pieces to the Access Puzzle.” Congressman Tim Bishop, a strong supporter of federal student-aid programs, opened the session with a discussion of recent changes to the Pell program designed to reduce costs and an explanation of upcoming deficit-reduction requirements, emphasizing that both revenue increases and significant spending cuts will be required.

For the rest of the morning, there was a lot of discussion about important issues related to college access and success.  But even with so many seasoned access advocates, financial-aid experts, and others committed to the goal of increasing attainment present, most chose not to pursue the opportunity to think about whether modifications to the design of the foundational federal subsidy program might be necessary to ensure its future success.

Expenditures on Pell grants increased from $8-billion in 2000-1 to $18-billion in 2008-9 and $35-billion in 2010-11. The number of recipients increased from 4 million in 2000-1 to 6 million in 2008-9 and 9 million in 2010-11. The average grant increased from $2,000 to $3,000 to $3,800. (In constant 2010 dollars these figures are $2,600, $2,900, and $3,800.) In 2010-11, 35 percent of all undergraduate students received Pell Grants, up from 20 percent a decade earlier.

Clearly, a significant portion of the recent growth is cyclical. More people are enrolling in college because of bleak job-market opportunities and more families are struggling financially. But economic recovery will not make the trend disappear. No matter how important federal support of low- and moderate-income students is, the federal government cannot continue to allow so many taxpayer dollars to flow to this program without carefully examining its design to determine whether the same dollars could have a larger impact on the persistent problems it addresses – or whether fewer dollars could accomplish the same outcomes.

If we want program changes to have the primary goal of improving educational opportunities, not just saving money, people committed to the federal role in improving access and success have to engage in developing ideas. The two of us are involved in a long-term project with the College Board, funded by the Bill and Melinda Gates Foundation and Lumina Foundation for Education, to reimagine Pell. We are working with a group of smart, knowledgeable, committed researchers and other experts to make some suggestions about creative and constructive directions for federal student aid.  We don’t have the answers – at least not yet – but we do have some ideas and we hope that others will think with us rather than just trying to hold onto the status quo.

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