Endangered Species: After 40 Years, Pell Grants Look Forward to a Shaky Future

The Pell Grant program soldiers on, after turning 40 this weekend, despite threats to funding and struggles to keep in step with spiking college costs-- rising at twice the rate of health care costs--to fulfill its mission to help impoverished and working-class families finance their children’s dreams of acquiring a postsecondary education.

But because of a student debt bubble that is inflating twice as fast as the housing one did in the run-up to the financial crisis, accessing an affordable college education--a proven pathway to economic security--is getting further out of reach for young poor and working-class Americans.

At the start of the Pell Grant program the average award was more than the average year of tuition; the $5,550 maximum Pell Grant award accounted for just 29 percent of a student’s total cost of attendance for nine months of education in the 2010–2011 academic year.

Thanks to Sen. Claiborne Pell from Rhode Island who sponsored the creation of the Basic Educational Opportunity Grant program as part of the Higher Education Amendments of 1972, Pell Grants (named after the senator) has been a four-decade success story and more generally receiving a Pell Grant is associated with a shorter time to a degree and transferring from a community college to a four-year university. Although the grant does not eradicate disparities between Pell-eligible students and ineligible ones--recipients start with more socioeconomic disadvantages relative to their more wealthier counterparts--it does make a difference.

For example, the percentage of low-income high school graduates enrolling in college the fall after graduation has risen from 31 percent in 1975 to 54 percent in 2009 and today-- thanks to the nation's investment in higher education over four-decades--around 9.5 million students qualifying for Pell today, up from 2 million in the mid-1970s.

Unfortunately awards are becoming less able to meet students' needs. While lower-income students struggle to finance their education in the face of steadily rising tuition rates, more and more applicants are qualifying for the program in the wake of the financial crisis. As more students qualify for Pell assistance, Pell expenditures have spiked. This is not a story of a government program growing too big, but of a financial disaster eroding America’s middle class and plunging millions of students and their families into near-poverty conditions.

But right at the crucial time when the Pell safety net is doing what it was designed to do-- providing money-strapped students access to higher education--there are some who want to cut the  program.

After forty years of the program’s growth and success, the most recent budget passed by the House, often referred to as the “Republican Ryan Budget,” jeapordizes Pell Grant funding for close to 1 million students.. Even if that disaster is averted, the program faces a funding cliff after the fiscal year 2013. Then, Congress would have to choose to either re-approve temporary funding, or be forced to exclude students from the program, or reduce the maximum grant size.

The Pell Grant program has been crucial for the last forty years in providing an opportunity for upward mobility, by helping poor and working class students attend college and keep them from dropping out once they're enrolled. Educating the nation’s rising generation's workforce and ensuring they have a vehicle to eneter the middle class is key to our economic success going forward. Ensuring that the Pell program remains intact and viable will be a significant part of that equation.

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