Pell Grant policy is a mess, writes economist Richard Vedder in The Chronicle of Higher Education. Spending on grants for low-income students hit $28 billion in 2010, doubling in four years, and is set to rise by more than 25 percent this fiscal year. We’re not getting much education for the money, Vedder believes.
Most Pell Grant recipients enrolled in four-year colleges and universities don’t graduate within six years, he writes. Those who complete a degree in three or four years receive less money than those who fail classes but remain enrolled.
As maximum Pell amounts grow and eligibility is extended to less poor persons, the award is taking on the nature of an entitlement—which is precisely what President Obama wants.
Instead, we should redesign Pell Grants to be more cost effective, Vedder writes.
- Grants would become true vouchers, payable to the students, not to financial aid offices, but usable only for higher education expenses (this is easy enough to do in this advanced tech age);
- Grants would vary in size and length with academic performance as well as student financial need;
- Students graduating in less than four years or with an academic record greatly outperforming expectations, given the student’s academic and socioeconomic background, would be given bonuses for good performance;
- Students whose predicted academic success rate (based on high school performance, test scores, etc.) is low would be given a Pell Grant on a probationary basis usable initially only at two-year degree colleges or certificated career-college programs; if they succeed there, they could pursue a four-year degree.
Under his plan, “5 million well placed Pell Grants averaging $4,000 each, costing collectively $20-billion, would do far more than the current system” to improve the incomes and mobility of low-income Americans, Vedder argues.
Completion rates in certificate programs are two or three times higher than success rates for students pursuing academic associate or bachelor’s degrees. Linking grants to academic performance almost certainly would improve success rates.
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at 6:46 am
[...] With the cost of Pell Grants soaring to $44 billion, it’s time to rethink the federal aid program for low-income college students. Should students get loans that convert to grants when they meet academic goals? How about bonuses for good performance or probationary grants for high-risk students? [...]