CED: Replace Pell with matching grants

Pell Grants should be replaced with a single federal-state matching grant, recommends the Committee for Economic Development in A New Partnership: The Road to Reshaping Federal & State Financial Aid. Cut higher ed tax credits to save $18.2 billion for student aid that expands access, the report also urges.

Income-based repayment of student loans should be the norm, CED writes.

“Replacing Pell Grants and the other federal grant programs with a need-based grant that would be partly matched by states is both novel and controversial,” notes the Chronicle of Higher Education.

At a luncheon . . . to release the report, several audience members voiced skepticism about the plan, worrying that it would penalize students in states that chose not to participate, and expressing doubt that a federal methodology for determining need would distribute aid fairly.

William R. Doyle, the Vanderbilt University professor who wrote the report, said he doubted states would refuse the aid, given the consequences for their students and colleges. He noted that states fought matching requirements in Medicaid and elementary and secondary education, but ultimately accepted the money.

“The federal government can’t be the only actor that’s concerned with access,” he argued. “They have to start expecting something back from states and institutions.”

The report is one of the studies commissioned by the Gates Foundation’s Reimagining Aid Design and Delivery project.

Employers see higher ed as costly, stodgy

The nation’s higher education system is costly, unaccountable and unwilling to change, say business leaders interviewed for Hiring and Higher Education, a report by Public Agenda for the Committee for Economic Development (CED).

“There are growing and grave concerns about the system’s ability to remain a leader and produce the workforce our future economy demands,” said Steve Farkas, lead author of the Public Agenda report. “Business leaders told us that, if higher education fails to control costs and hold itself accountable for results, our colleges and universities will become less relevant, and our economy will suffer greatly.”

However, the business leaders praised community colleges as no-frills institutions that are able to adapt to new challenges and work with employers on job training.

The widely shared perception is that higher education is highly resistant to change, and that innovation and adaptability are hardly the forte of colleges and the administrators who run them. Some executives talked about experiences they had trying to work with their local colleges only to run up against a “can’t-do” system tied up by committees, paperwork requirements and institutional prerogatives.

“The colleges, as creative as they may be, lack innovation,” said one executive. “They’ve set up a certain structure, tenured staff, and because of that they’re opposed to change.”

Despite the high unemployment rate, it’s difficult to find skilled workers in some fields, the executives said.