Expanding Access to Pell Grants

As student loan debt and the cost of attending college continue to rise, the U.S. Department of Education has proposed a study to assess what effect expanding access to Pell grants to students will have on their employment and earnings.

The study consists of two experiments. In each, the Department will make a single change to the Pell grant eligibility criteria. The first experiment will allow more students who already have bachelor’s degrees to receive grants. To be eligible for this experiment, students must have a bachelor’s degree, be unemployed or underemployed and pursue vocational training. The second experiment will loosen the program requirements for some Pell grant recipients, reducing the hours and duration of their education and training program.

The study will measure the employment and earning levels of the students after they graduate against students who have not had expanded access to Pell grants.

The Federal Pell Grant Program has made higher education affordable to millions of students—mostly undergraduates—by providing need-based grants since its establishment in 1972. Proposed and signed into law by President Richard Nixon, the program was designed to allow students who would otherwise not be able to afford it go to college. Because the program offers grants, not loans, students receiving Pell grants, without having to repay the money, incur less debt.

In the 40 years since the Pell grant program’s inception, Congress has expanded the program to include more recipients and more money.

The maximum grant for students surged to $5,500 in the past school year from $452 in 1973, (which is about $2,340 in today’s money)—a large increase that still lags far behind hikes in college tuition.

According to the Institute for College Access and Success, a nonprofit organization that aims to expand access to higher education:

As recently as in the 1980s, the maximum Pell Grant covered more than half the cost of attending a four-year public college. Even after the recent increases, the scheduled $5,635 maximum Pell Grant is expected to cover less than one-third of the cost of college—the lowest in history.

Catherine Rampell wrote in a New York Times piece in March, “College tuition and fees today are 559 percent of their cost in 1985. In other words, they have nearly sextupled (while consumer prices have roughly doubled).” Rampell reported that college tuition has increased even faster than medical care costs, gasoline prices and inflation.

The number of students receiving Pell grants has increased with maximum grants, to nearly 9 million today from 185, 249 in 1973.

The Department of Education’s proposed study, which the Office of Management and Budget will review for approval, will focus not on increasing maximum grant but on expanding access to Pell grants, presumably with the intent of implementing changes in Pell grant eligibility criteria should increases prove effective. The department expects the five-year study to involve 10,800 participants.

In addition to examining changes in employment and earnings of students, the Department of Education expects to the study to offer insight into students’ experiences with education and training, their debt and financial aid, and the role of services to help job search. The proposal for the study, published today in the Federal Register, is open to public comment for 30 days.

Minjae Park

Minjae Park is an intern at the Washington Monthly.