Proposed Pell Grant reform

Roughly 37 million students in the United States have student loans, bringing the national total owed to $1 trillion. Tuition costs are trending further upward. Both the federal and Utah state governments have made post-secondary education a priority, but the main reason students are dropping out nationally is for financial reasons.

To combat this, the Obama administration has invested more in Pell Grants, raising the maximum amount to $5,635 for 2013-2014 (up from $4,730 when he took office in 2008). The percentage of eligible students has also increased since 2008 because of a weaker economy – more students have been returning to school in hopes of better career outlooks and more students were eligible from lower incomes. The total amount awarded in 2008 was $16.1 billion, and in 2013 that number reached $33.5 billion.

A study released in April 2013 by the nonprofit College Board posits that the current system of awarding these Pell Grants is inefficient, and grants are being awarded to students that don’t graduate.

According to the study, 44% of Pell Grant recipients are over age 24, and only 3% of Pell students that were over the age of 25 at enrollment had graduated 6 years later. 25% of Pell recipients that were under the age of 25 at enrollment had graduated 6 years later.

Utah Valley University, as an open enrollment university, has a larger percentage of non-traditional students than average (for Utah). 33% of its students were over age 24 in the fall 2013 semester. Michelle Kearns, Associate Vice President of Student Success and Retention, found that traditional students (students under age 24) are slightly more likely to graduate than non-traditional students (students age 24 and older) by 2% (over a 3-year average).

The data for UVU doesn’t reflect the national average displayed in the study.

“There is no significant difference in graduation rates of students with or without Pell eligibility [at UVU],” said Kearns. “Students with Pell eligibility are retained at a rate slightly higher (4% over a 5-year average) than those without Pell eligibility.”

The proposal, Rethinking Pell Grants, suggests a two-pronged approach. Pell Y Grants would be offered to younger (traditional) students and Pell A Grants would be offered to students age 24 and older (non-traditional), each with a separate set of requirements and support.

Rather than taking Pell awards away from the 25 and older demographic, The College Board proposes the students receive academic and career advising in deciding what study to pursue, as well as throughout their post-secondary education.

The proposal also suggests the process start before the students are college-aged to bolster preparedness. The federal government could open college funds for 11- and 12-year-olds that are projected to be eligible based on their parents finances.

UVU’s department of Student Success and Retention conducts research to find out why students drop out and operates active initiatives that aim at retention.

“The primary reasons students leave UVU are a) finances/work, b) family/life obligations c)moving/transferring d)LDS mission/military service and e) [they] underprepared for university-level work,” said Kearns.

As the proposal reaches its one-year anniversary, the emphasis on Pell Grant reform has been strengthened. Sandy Baum, chair of The College Board, has seen a positive response.

“We have been pleased that people are discussing the ideas we raise and we are optimistic that constructive conversations will continue,” said Baum. “We are eager for the conversations to continue and for evidence to accumulate about the most constructive path for the Pell program.”

The U.S. Congress has yet to adopt any of the measures, but legislators are keeping Pell Grants relevant on the hill.

“One of our central proposals involves simplifying the application process and the eligibility formula, and those issues are likely to be discussed as Congress works on reauthorizing the Higher Education Act,” said Baum.

The budget released April 1, 2014 by House Republicans freezes the current maximum-award level, eliminates eligibility for students attending less than half time and implements a maximum-income cap (disqualifying students from families with a higher-level income rather than awarding them small amounts).

Senate Budget Committee Chairwoman Patty Murray (D-Wash.) has said she will not release a competing budget from Senate Democrats. Congress will debate the House Republican-published budget over the next two weeks.