Undermining Pell

This report examines U.S. Department of Education data showing the average net price for students from families making $30,000 or less at more than 1,400 four-year colleges in the 2013-14 academic year. The analysis finds that hundreds of colleges expect the neediest to pay an amount that equals more than half of their families’ yearly earnings.

For years, colleges complemented the government’s efforts by using their financial aid resources to open their doors to the neediest students. But those days appear to be in the past. Over the last several decades, a powerful enrollment management industry has emerged to show colleges how they can use their institutional aid strategically in the pursuit of high-achieving and affluent students. 

Worse yet, there is compelling evidence to suggest that many schools are engaged in an elaborate shell game: using Pell Grants to supplant institutional aid they would have otherwise provided to financially needy students, and then shifting their own funds to help recruit wealthier students. This is one reason why even after the federal government has almost doubled the total amount it spends on Pell Grants each year, low-income students continue to take on heavier debt loads than ever before. They are not receiving the full benefits intended. 

Overall, too many four-year colleges, both public and private, are failing to help the government achieve national college access goals. They are, instead, adding hurdles that could stymie the educational progress of needy students or leave these students with mountains of debt after they graduate. 

Remarkably, the retrenchment in colleges’ commitment to helping low-income students has barely registered in Washington. Federal officials appear to be operating under the assumption that colleges are continuing to complement the government’s efforts, rather than increasingly undermining them. 

The time has come for policymakers to take notice.