Cutting Pell wisely

The huge increase in Pell Grant costs — spending has nearly doubled in the last three years — makes cuts inevitable, nearly everyone agrees. Cut Pell wisely, advises a group of economists in a letter to College Board with recommendations for controlling costs with the least harm to low-income college students. Their ideas will be controversial, writes Inside Higher Ed.

Sandy Baum, a senior associate at the Institute for Higher Education Policy and senior fellow at George Washington University’s School of Education and Human Development, organized the letter.

The letter proposes increasing the number of credit hours students must take to qualify for a maximum Pell Grant. More than 40 percent of  maximum Pell recipients take only 12 credits, while most colleges consider 15 the minimum for full-time status. A 2009 study by signer Judith Scott-Clayton of Columbia University’s Teachers College, suggests the change would encourage students to take more credits and graduate more quickly, using less Pell funding.

A second change would decrease from nine the number of years for which a student could qualify for a Pell Grant. Only 3 percent of Pell recipients have grants for more than six years, but cutting the maximum eligibility period to eight or even six years . . .  would still “allow time for students who require remediation,” the letter says. “This move could provide a clear signal that the program is not designed to subsidize students indefinitely, but to support them to complete their degrees in a timely manner.”

In 2009, Congress let students qualify for a maximum grant with a family income of $30,000, up from $20,000.  Students earning more than $20,000 could be asked to contribute to their education, the economists suggest.

Money provided for living expenses also could be reduced “without sacrificing simplification,” they write.

Pell Grant eligibility should be limited to “institutions committed to student success,” the economists advise, without providing specifics.

“Minimizing the extent to which institutions and/or students can manipulate the system and divert dollars away from their necessary role of increasing meaningful educational opportunities is a necessary component of assuring the long-term viability of the program,” they write.

That idea could extend beyond for-profit colleges with high costs and low graduation rates. Community colleges have lower graduation rates than two-year for-profit programs; some four-year public and private, nonprofit institutions also have low graduation rates.