Pell Grants don’t always go for college tuition, writes Nancy Marshall Genzer on the Hechinger Report. (Listen to the story on Marketplace.) The maximum grant of $5,500 is more than tuition at low-cost colleges; students get the rest back a few weeks into the term to spend on books and living expenses. They don’t have to account for how they spend the money. A single mother might pay the babysitter so she can get to night classes; a recipient living with parents might buy a car, clothing or Christmas gifts.
While most Pell recipients try to pass their classes, those at low-cost colleges have an incentive to enroll, cash the refund check and then stop attending. Teachers say there’s no trouble parking on campus once the checks go out.
They’ll lose eligibility for aid after two or three semesters, but they can move on to another college and try again, says Mark Kantrowitz, publisher of FinAid.org. Colleges should track these “Pell runners” and turn them into the U.S. Education Department, he says.
Kantrowitz: If you see a student transferring from one college to another to another within a small geographic area, that may be a sign that they’re a Pell runner.
At community colleges in California’s Central Valley, 25 percent of Pell Grant recipients each semester fail their classes or earn such low grades that they lose aid eligibility, a Fresno Bee investigation found. Financial aid administrators suspect some are not serious students, but nobody can say how many are enrolling for the refund check.
Louisiana’s technical colleges charge very low tuition, raising the value of the refund check. An estimated 20 percent of students collect Pell Grants, then fail all their classes, often because they stop attending, says Joe May, president of the college system. The legislature is considering a bill that would raise tuition to discourage aid abuse.
Of course, all the honest, hard-working students would pay more for classes.