Pell spending declines

After nearly tripling in five years, Pell spending fell $2.2 billion in the last fiscal year, even as more students received grants, reports Inside Higher Ed. Spending totaled $33.4 billion, “well short of the department’s estimated $40 billion price tag for Pell.” Five years ago, the program cost $12.8 billion.

. . . more of the almost 9.7 million lower-income students who received the grants last year got smaller awards. One reason for that could be more students attending college part time, because part-time enrollment status reduces Pell award amounts.

Experts said another probable cause for the decrease in expenditures is the elimination of the year-round, or summer, Pell Grant, which allowed students to qualify for two awards in a year. But that cut, which went into effect in July 2011, was projected to save only $4 billion per year, and the program came in more than $6.5 billion under its estimated cost. So something else must also be at play.

Fewer recipients are attending for-profit institutions, accounting for $1.4 billion of the decline.  Slightly fewer community college students received Pell Grants, but Pell revenue increased a bit as students qualified for somewhat larger grants.

For-profit students’ average grant award is larger than that for students who attend community colleges, who are more likely to enroll on a part-time basis. So the flattening of Pell spending despite increasing numbers of recipients might be partially due to the for-profits’ woes, but experts said it was too early to make that call based on the new numbers.

The $2.2 billion decrease surprised officials at the American Association of Community Colleges, said David S. Baime, the association’s senior vice president of government relations and research. “It’s really dramatic at a time that the program is growing.”

Pell was expected to be short $20 billion this year. By cutting summer grants, Democrats saved the $5,550 maximum grant, which Republicans had proposed cutting by 845. However, advocates fear higher education spending will go off a “fiscal cliff” next year as Congress tries to balance the budget.