As the United States politicians continue to negotiate about budget cuts to rein in our country’s spiraling debt, it is no surprise that our leaders would turn their gaze to higher education and financial aid. As governments, companies, transportation, and every other form of business shifts more financial burden to individual consumers, colleges and universities are doing their best to meet their students’ financial need as tuition prices continue to soar year after year. This paper will examine the current higher education turmoil surrounding the potential cuts to the Pell Grant and I will offer some ideas as to what I believe is the best course of action for the Pell Grant.
In 1972, the Pell Grant was created as an amendment of the Higher Education Act. Named after Senator Claiborne Pell, the Pell Grant is a non-repayable grant from the United States Federal Government, typically awarded to low-income students pursuing a bachelor’s degree at an undergraduate degree granting institution to promote access to postsecondary education. The value of the Pell Grant award need is determined by the U.S. Department of Education using a standard formula, established by Congress, to evaluate the financial information reported on the Free Application for Federal Student Aid (FAFSA). Multiple factors in the formula include the costs to attend school, a student’s status as a full-time or part-time student, and plans to attend school for a full academic year or less. The current maximum Pell Grant award for the 2011-12 award years (July 1, 2011 to June 30, 2012) is $5,550. (US Department of Education, 2011).
Congress's failure to pass this year's budget, has kept the Pell Grant program in limbo for quite some time. Doing so has allowed the program to continue as is, but with a $10.7-billion shortfall in the Pell Grant program, Congress is looking to desperately reform the program in the next round of budget negotiations. This state of confusion is causing many institutions to discuss the possibility of rolling back a portion of the financial-aid offers they have made to students for the coming academic year. This is a major concern when we are seeing a huge increase in the students qualifying for federal aid. In 2011, it is estimated that up to 9.4 million students are expected to receive grants, up from 6.2 million in 2008 (Field, 2011). Because of the large increases in numbers and the growth in the maximum award, analysts have seen the cost of Pell Grants double over the past three years. To combat the issue, Republicans in the House of Representatives, have proposed cutting $5.7-billion from the Pell Grant Program. If the Bill is passed, it would end aid to a quarter of all Pell Grant recipients and cut the average award by $785, forcing students to borrow more for their college education (Field, 2011).
In our current state of economic perplexity, high unemployment and lack of direction and purpose, it seems to be counterproductive to cut the funding to a program that was set up to help low-income Americans who have a desire to attend college and attain a degree. While the decrease does not seem like a whole lot for our aspiring degree seeking students, what about the average cost in tuition increases? Growth in college costs has exponentially outpaced growth in the Pell Grant program. In addition, the aid colleges are awarding is covering less of students costs. In 2008, the average institutional grant for first-time freshmen covered 52.3 percent of the average sticker price for grant recipients. In 2009, it fell to 48.5 percent, and it was estimated to cover 49.1 percent for those entering in fall 2010 (Blumenstyk, 2011).
With higher costs, lower grant amounts, and lower discount rates from colleges, this cut could potentially force some students who have an unsteady income or those who don't have much financial flexibility, to take fewer classes or drop out altogether. An increasing number of jobs require a college education. If we have more jobs than there will be qualified people to fill the vacancies, how will we put our current workforce back to work? What about our economic future and impact across the world? All of these questions are all strongly connected to the current financial aid questions, funds, and future of our higher education system. Without stable Pell Grant funds available to all driven students who qualify and have a desire to pursue a college degree, no matter what their age or experiences may be, we will see a growing mismatch between the demand for skills and the supply of skills. If this qualified workforce has to pay back higher loans, or take out riskier private loans, due to lower Pell Grants and our institutions inability to offer them institutional aid to meet their need, this will continue to add to the burden of fees and rising costs being imposed on our citizens from every other facet in their lives.
The challenges for higher education financial aid are great, but there are also opportunities to rise to these challenges and make progress that is best for all parties involved. I do believe that we need to adjust the Pell Grant, but I am confident that it can be done in a way without cutting funding to the program. Currently, proposed changes to the Pell grant include eliminating funding for summer semesters. Instead of eliminating funding for summer semesters, I think we should find a way to encourage students to complete summer classes to potentially graduate earlier. This could also reduce the number of guaranteed Pell Grant semesters from the current 18, to a lower number, and allow for more potential savings and allocate finite funds more efficiently to those that need the Pell Grant. Another proposed adjustment the Pell grant program is warning students who are not meeting the academic benchmarks that their benefits could be cut off if they do not adjust their scholarly performance.
While this analysis includes a small sample of the issues and proposals surrounding the Pell Grant, all proposals have some merit. Going forward, I believe it is best for our higher education system to look at both goals of access and efficiency of completion, instead of looking at it as we can only have one or the other. With both of these objectives serving as a guide for the best interest of our students, access and success, we can look to make significant strides forward that will prove to be a strong investment for our nation and our future qualified workforce.
References
Blumenstyk, G. (2011). Private Colleges Increased Aid as Economy Sank, Tuition-Discounting Survey Finds, The Chronicle of Higher Education. Retrieved on October 1, 2011 from http://chronicle.com.ezproxy.lib.usf.edu/article/Private-Colleges-Increased-Aid/127599/.
Field, K. (2011). Pell Grants Face Cuts, Possible Overhaul, The Chronicle of Higher Education. Retrieved on October 2, 2011 from http://chronicle.com.ezproxy.lib.usf.edu/article/Pell-Grants-Face-Cuts/126807/.
U.S. Department of Education. Federal Pell Grant Program. Retrieved on October 1, 2011 from http://www2.ed.gov/programs/fpg/index.html.
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