Assault On Pell Grants Has Serious Implications

In recent years, both Republicans and Democrats in Washington have lost their way when making policy around one of most important things we will ever do: educate our children. Most recently, this has found its expression in the bipartisan assault on Pell Grants.

If we were to eliminate these grants tomorrow, the 9 million college students who rely upon them would be in peril of dropping out of college, including nearly half of African-American undergraduates and 40% of Hispanics.

Meanwhile, according to the Georgetown University Center on Education and the Workforce, we will already be at least 3 million college degrees short of filling the 62% of American jobs that require them by 2018–without adding 9 million more on top of that.

Cutting Pell Grants can only create to an ever-increasing pool of college dropouts, leading to a reduction in the number of college graduates and increased budget deficits, as personal income and government revenues are dramatically reduced along with graduation rates.

According to the American Institutes for Research, college dropouts cost both our economy and themselves a minimum of $4.5 billion in lost income taxes and personal earnings every year. Yet, even knowing all this, Democrats and Republicans have raided Pell-Grant funding, the most useful tool in our toolkit for helping those without the means acquire higher education.

The Obama Administration was all too willing in their FY11 budget agreement to cut $100 billion from Pell Grants to eliminate funding for summer classes. This directly harms those most likely to directly rely upon the grants, as pointed out by David Leonhardt of The New York Times:

The typical college student today is not the traditional college student who finishes in four years. Many are working at the same time and need to organize their classes around their work schedules. For them, summer classes can make a big difference.

Meanwhile, Congressional Republicans shamefully offered legislation that would have decimated the Pell Grant program in their Fiscal Year 2012 appropriations bill for the Labor, Health and Human Services and Education Committee.

It would have denied grants to students attending college less than half time, reduced the lifetime eligibility period from 18 to 12 semesters and lowered the family income threshold to receive benefits from $32,000 to $15,000 (or just above the poverty line).

By the time they were done implementing this dystopian policy, Pell Grants would have been left to cover the lowest percentage of college costs in almost 40 years. That was not a typo.

It is not those attending college, but (as was the original intent) the institutions themselves that must be held responsible for graduating students. They cannot simply collect Pell Grants, and the profit from pocketing them, while whistling past a graveyard of discarded textbooks and shamefully low graduation rates.

A recent study by Complete College America, with funding from Bill and Melinda Gates, found these numbers to be nothing short of scandalous. According to a report by The New York Times covering the study, "In Texas, for example, of every 100 students who enrolled in a public college, 79 started at a community college, and only 2 of them earned a two-year degree on time; even after four years, only 7 of them graduated. Of the 21 of those 100 who enrolled at a four-year college, 5 graduated on time; after eight years, only 13 had earned a degree."

So how do we create the proper incentive for colleges to work towards these ends?

One way would be to apply a penalty to educational institutions for admitting and not graduating students. This would send a clear message that graduating students is a must, in the financial interest of both the admitting institution and society as a whole.

An even more comprehensive model would be to create what I call Education Enterprise Zones (EEZ). Under this rubric, government would require collaborative contracts programmatically joining elementary, junior high and high schools with regional colleges—a vast network of educational continua.

The regional institutions would work together, to review and suggest improved methods of data collection, evaluation and overall student performance. This solution may seem revolutionary, but it is already practiced on a smaller level within primary school institutions, for example.

Requiring cooperation and responsibility, along with government assistance and industry where appropriate, would lead to a data-based approach that would markedly improved graduation rates. In turn, this would lead to explosive intellectual property improvements, a stronger economy and an improved standard of living for all of us.


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