July 16 2012
Have 40 Years of Pell Grants Made College More Affordable?
Vicki E. Alger
The U.S. Department of Education had a recent blog post celebrating 40 years of Pell Grant success at making college more affordable. The post quoted from a speech by President Obama commemorating the anniversary:
Forty years ago, our Nation codified a commitment to bringing higher education within reach for every American by creating the Basic Educational Opportunity Grant—later renamed the Federal Pell Grant after Senator Claiborne Pell, to honor his efforts in creating the program. On this anniversary, we reflect on four decades of progress toward fulfilling that fundamental promise and rededicate ourselves to making college affordable for all.
But have Pell Grants really helped make college more affordable?
College tuition prices alone increase about twice the general inflation rate based on statistics going back to 1958. Examples of administrative and other forms of higher education bloat are plentiful. A recent analysis indicates that over a fifteen-year period postsecondary administration grew more than twice as much as instructional staff. This is significant since dozens of mid-level and senior-level administrative positions command six-figure salaries, compared to the relative handful of faculty positions that do. Meanwhile, six-year college completion rates at public four-year institutions have remained just below 55 percent for a decade. The four-year rate has been stuck around 30 percent.
Increased federal subsidies did little—if anything—to keep college affordable or productive. In fact, a strong case can be made that federal loans and aid likely fueled this situation instead of squelching it. (See here, here, here, here, and here.) With regard to Pell grants, more students are qualifying for them, but fewer low-income recipients are actually graduating. (See also here.)
Helping students with genuine need is one thing. But until outcomes-based standards for public funding of postsecondary institutions becomes the rule instead of the exception, don’t expect taxpayer dollars—or students who use them—to go very far. Institutions should be required to demonstrate that they actually graduate students—not just enroll them. They should also quantify how much institutional need-based aid they offer, as well as how they keep costs down and generate additional income (from alumni, for instance).