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Pell Grants cover a dwindling share of college costs as students borrow more

Even as more students enroll in college and earn degrees, inequalities in U.S. higher education opportunity are increasing.

That finding is in a new report, “Indicators of Higher Education Equity in the United States — 2019 Historical Trend Report,” from the Pell Institute for the Study of Opportunity in Higher Education and the Alliance for Higher Education and Democracy at the University of Pennsylvania (PennAHEAD). The organizations share a mission “to foster a U.S. higher education system in which all citizens, regardless of family backgrounds, have the opportunity to develop their talents and capacity to fully participate in a democratic society.”

Laura Perna, director of PennAHEAD, and Margaret Cahalan, director of the Pell Institute, joined me on Episode 16 of the Lumina Foundation’s podcast “Today’s Students/Tomorrow’s Talent” to talk about the report.

Their research found that:

  • Family income increasingly determines whether and where students go to college, and if they will graduate. Black bachelor’s degree recipients have the highest borrowing rates (85 percent) and the highest average amount borrowed ($34,000).
  • Families continue to take on more of the costs of their students’ higher education. In 2017, parents and students were responsible for 48 percent of higher education expenditures, up from around 33 percent from 1975 to 1981. State and local sources accounted for just 42 percent of higher education expenditures in 2017, down from 58 in 1975.
  • Where students go to college is important. Lower-income students are more likely to attend for-profit, community colleges, or less-selective four-year institutions, and their numbers are relatively unchanged over the past 20 years at selective institutions.

Perna notes that while the costs of college continue to rise, family income has remained largely stagnant and the availability and amount of Pell grants has continued to fall. In the mid-1970s, Pell grants covered two-thirds of the average college cost. By 2017, the maximum grant — $6,000 — covered only 25 percent.

One of the results: Borrowing rates and amounts borrowed are higher for Black students than for students in other racial and ethnic groups.

“We have some really worrisome things going on when it comes to figuring out who gets the opportunity to go to college,” she says.

The federal government now provides $28 billion for Pell grants, serving 7.7 million students a year. Cahalan says when the grants were introduced, Congress imagined they would cover two-thirds to three-quarters of students’ costs. Since then, it’s been a steady decline. Today, to meet the expectation that Congress had, the maximum grant would have to be $16,000 a year.

That could be done with an infusion of $50 billion in the program. Cahalan says that’s eminently doable. Quoting Martin Luther King, she says, “it’s really a question of will and not of resources.”

Look at the defense budget, she says, which increased from $600 billion to $900 billion from 2016–2019. “That’s 32 times what we spend per year on the Pell grant program,” she adds.

The question is, Cahalan says, “Do we want to educate young people, or do we want to have the situation that we have right now?”

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Tracy Chen
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FEATURED VIDEO
Lumina Foundation: Working to ensure a quality education for all Americans
Lumina Foundation: Working to ensure a quality education for all Americans
August 8, 2019

Lumina Foundation is an independent, private foundation in the United States that is committed to making opportunities for learning beyond high school available to all.