Redesigning the Pell Grant Program

financial-aidLast month the Hamilton Project, an economic policy initiative launched by the Brookings Institution, released a discussion paper proposing a series of reforms to improve the Federal Pell Grant program. The paper titled, “Redesigning the Pell Grant Program for the Twenty-First Century,” was co-authored by Judith Scott-Clayton an Assistant Professor of Economics and Education at Columbia University and Sandy Baum a Senior Fellow at the Urban Institute.

Together they argue that the Pell Grant program has evolved from its initial conception as a “one-size-fits-all voucher” for recent high school graduates from low-income families to the “federal government’s primary workforce investment effort.” Put another way, the size and scope of the federal Pell Grant program has fundamentally changed since its creation in 1972 from one that served primarily younger students to one that is increasingly used by recent graduates and adults alike. This trend is borne out in the data which shows that 44 percent of Pell recipients are twenty-five or older.

Yet, the larger problem the paper’s authors seek to address (and partly the impetus behind a Congressional hearing today) is the disproportionate number of Pell recipients who fail to earn a credential or degree after six years. Over fifty percent of all Pell recipients fall into this category which has fueled discussions about the efficacy of the program as a whole. The underlying cause(s) of these figures remains very much open to debate and the authors do acknowledge that there are many possible explanations for non-completion. For instance labor market conditions could improve, encouraging those recipients who enrolled in a postsecondary program likely stemming from difficulties finding employment, to reenter the workforce.

Whatever the root cause may be, Scott-Clayton and Baum argue that three broad-based structural reforms would help focus and strengthen the program to ultimately improve these outcomes:

  •   Supplement individual grants with personalized guidance and support services
  •   Simplify the eligibility and application process
  •   Create incentives for additional grants based on student performance and effort

Taken together the authors argue that these reforms would make Pell more of a program and less of a grant, “thus inducing its beneficiaries to become full participants, and not just recipients.” Many Pell recipients have never had access to career coaching or academic advisement— linking these efforts to a grant would help student’s plan for the future and lead to higher persistence rates. The complicated application process, the subject of much discussion today in Congress, would diminish the amount of time students currently devote each year to remain eligible. And finally, the authors argue incentivizing— at least in part— portions of the grant would persuade students to complete a credential or degree.

Since the Pell Grant program’s creation, a postsecondary credential, certificate, or degree has become increasingly a prerequisite to entry into the workforce. As this trend continues, it is imperative that the program maintain its intended goal of improving equitable access to higher education while ensuring grants are being efficiently put to use. The authors of this paper have put forward several sensible policy recommendations that could prove vital to furthering that goal.

Steve Voytek, Government Relations Associate 

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