Congress voted to restore year-round Pell in the 2017 omnibus budget, allowing students additional funds they can use to complete their degrees faster. This broadly bipartisan achievement shouldn’t stop us from continuing to focus on the effort to keep the Pell program well-funded to meet the ever-growing needs of today’s students.

As a first-generation African-American student who received Pell, I can honestly state that I would not have completed college without it. My story is like so many other students for whom Pell Grants make college both accessible and affordable. According to The Institute for College Access and Success (TICAS):

  • In 2015, 7.8 million students depended on Pell Grants to attend and complete college.
  • More than 60 percent of African-American undergraduates and half of Hispanic undergraduates rely on Pell Grants to attend.
  • This year’s maximum Pell Grant award covers the smallest share of college costs in more than 40 years.
  • Pell Grant recipients are more than twice as likely to have student loans (with an average debt $4,750 higher than that of their higher-income peers).

Ensuring an affordable pathway for low-income students is core to Lumina Foundation’s equity imperative, which recognizes that historic, persistent factors have created an unequal postsecondary education system. We firmly believe that this system must be redesigned to give all Americans—regardless of race, income and other socioeconomic factors—the opportunities that postsecondary attainment provides.

Two recent reports further underscore the issue of equity in higher education.

The Pell Institute for the Study of Opportunity in Higher Education, in partnership with the Alliance for Higher Education and Democracy at the University of Pennsylvania (PennAHEAD), recently released its Indicators of Higher Education Equity in the United States: 2017 Historical Trend Report. That report provides disturbing evidence of a “two-tiered educational system that is increasingly likely to produce different life outcomes for rich and poor students.” Some examples:

  • Students from the highest-income families are nearly five times more likely to earn a bachelor’s degree by age 24 than are students from the poorest families.
  • The value of the federal Pell Grant is declining. The maximum Pell Grant covered 67 percent of average college costs in 1975-76, but only 26 percent of those costs in 2015-16. To cover the same percentage of college costs as in 1975-76, the 2015-16 Pell maximum ($5,775) would have had to be $15,029.
  • Financial aid is insufficient to cover college costs for many low-income students. In 2012, dependent, full-time undergraduates from the lowest family income quartile averaged $8,221 in unmet financial need. In 1990, the amount (in constant 2012 dollars) was just $3,495.
  • As the selectivity of the college increases, the percentage of low-income students attending decreases. In 2014, the percentage of full-time, first-time degree/certificate-seeking undergraduate students who were awarded Pell or other federal grants ranged from a low of 16 percent at the most competitive institutions, to 59 percent at two-year institutions and non-competitive four-year institutions, to 75 percent at private, for-profit institutions.

The Center on Education and the Workforce (CEW) at Georgetown University released an analysis that further demonstrates increasing stratification in higher education. The 20% Solution: Selective Colleges Can Afford to Admit More Pell Grant Recipients shows that 69 of the most selective private colleges had annual budget surpluses of nearly $140 million over the last four years, yet admitted fewer than 20 percent of Pell Grant recipients.

While the Pell Grant was created to alleviate income inequality across all types of institutions, the most selective institutions have the smallest proportion of low-income students.

  • Highly qualified Pell Grant students are, for the most part, not attending selective colleges, which have much higher graduation rates (82 percent, on average).

    Of the 150,000 Pell Grant recipients with SAT/ACT scores at or above the median, more than half (86,000) do not attend selective universities.

  • Pell Grant recipients graduate at higher rates at selective colleges than at open-access colleges.

    Seventy-eight percent of Pell recipients who attend selective colleges graduate, compared to only 48 percent at open-access colleges.

  • The nation’s most elite universities could enroll more low-income students without significantly hurting their graduation rates or budgets.

    To meet a threshold of 20 percent Pell Grant recipients, the selective colleges that would have to add the most Pell students are the University of Wisconsin-Madison (1,467) and Penn State University (1,357). The private selective universities that would have to add the most students are Boston University (1,046) and Washington University in St. Louis (975).

The nation’s most elite universities could enroll more low-income students without significantly hurting their graduation rates or budgets.Tweet This

These recent reports highlight that there is still a ways to go in providing equitable opportunities for all students. CEW suggests that one potential way to equalize opportunity would be to federally mandate a certain percentage of Pell students at all colleges. For example, only 6 percent of the nation’s 5,500 institutions would have to change their student mix to meet the 20 percent threshold. According to the center’s director, Tony Carnevale: “If we give low-income students better access to selective colleges or the kinds of resources those colleges provide, their graduation rates would almost double. And that’s an outcome we should all strive for.”

This is but one approach; it is clear that to achieve equity and excellence in education, we must level the playing field. The Pell Grant program was intended to do just that. It laid the foundation for greater inclusiveness and opportunity within higher education. The goal now can’t be merely to preserve the program. We must ensure that our federal financing system does even more to close the prevailing gaps in the American higher education system.

Debunking the Five Myths Behind the Pell Grant | Anthony Carnevale | May 9, 2017

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