First there are diploma mills that persuade unqualified students to sign up for federal grants. Some are for-profit colleges, he writes, but unselective non-profits also sign up the unqualified.
Second is the “probable fact” that most Pell Grant recipients do not graduate from college. (It’s “probable” because the U.S. Education Department doesn’t publish data on Pell graduation rates.) “This is arguably a scandal, certainly an inefficient use of public money,” Vedder writes.
Even worse, Pell “has been hijacked from its original purpose –helping poor people get degrees,” he writes. Fewer Pell recipients come from bottom-quartile families as the program expands to more and more students.
In 1980, fewer than 40 percent of full-time students received Pell Grants, according to Vedder’s calculations. That rose to 47 percent in 2006-07 — and soared to 82 percent in 2011-12. While that probably reflects the growing eligibility of part-time students for Pell aid, it’s out of line with the number of low-income students, he writes.
About 40 percent of college students — roughly seven million out of 18 million undergraduates — come from families earning less than $60,000 a year, a generous definition of financial need. Yet in 2011-12, there were 9.6 million Pell Grant recipients.
Pell Grants “have not increased the proportion of lower-income Americans amongst those graduating from college,” Vedder concludes. “It is time for a new federal financial aid model – a leaner, more efficient one that is both performance and need driven, not just an entitlement handed out to a majority of those attending college.”