Report: Reforms Needed to Boost Pell Grant Program’s Impact

By Allie Bidwell, Communications Staff

The Pell Grant program has for decades provided financial assistance for low-income college students, but as the price of college has risen, the program’s impact has not kept pace. In order to maximize the impact of the program for students, policymakers should make some adjustments to how students apply for a Pell Grant, and how awards are distributed, according to a new research brief.

In the research brief – one of several released this week from the Urban Institute – author Judith Scott-Clayton suggested eliminating the FAFSA and replacing it with a significantly streamlined application to determine Pell Grant eligibility. Additionally, she wrote that students should only have to determine their eligibility once, rather than submitting a new application every year.

Most of the information used to calculate a student’s Pell Grant eligibility is already collected when students and families file their taxes each year, she argued. Simplifying the application and eliminating the need to reapply would help better direct aid toward the neediest students, she wrote.

"The FAFSA is more than just an annoyance. The form, and the convoluted eligibility formula underlying it, obscures the significant amount of aid available to low-income students," the brief said. "Many students who would qualify for aid never submit a FAFSA. Others may fail to adequately prepare for college because they assume from an early age that they cannot afford it. Ironically, the students who need aid the most are the most likely to be discouraged by the complicated application process."

Scott-Clayton also proposed prorating Pell Grant awards to students’ credits, rather than to an "arbitrary" definition of full-time enrollment status. While grant awards are reduced for part-time students, those who are full-time receive the same award whether they take 12 or 15 credits, she wrote. The way grant awards are currently structured "has led to perverse incentives that discourage timely completion," the brief said.

Finally, Scott-Clayton suggested leveraging technology to provide guidance and counseling to prospective and current Pell Grant recipients.

"Given the stakes involved for students and taxpayers, it is essential that every dollar of student aid have the maximum impact," the brief said. "Simplifying the aid eligibility and application process, removing perverse incentives that slow progress toward completion, and leveraging low-cost guidance services to help students make the most of their awards, could help students spend less time worrying about money and more time focusing on what they need to do academically to prepare for and succeed in college."


Publication Date: 9/21/2017

Robert P | 9/21/2017 11:49:30 AM

For those on public assistance and not filing taxes, the states or federal agencies could indicate that the student/parent is receiving public assistance. This would make them automatically eligible for Pell. True, getting states to report this information would be a huge challenge but so was getting access to IRS. If they do not file taxes and are not reported as having public assistance, perhaps they get cash under the table, then they have a problem.

G. Mike J | 9/21/2017 11:6:56 AM

After reading the paper, it isn't clear to me how students whose families don't file tax returns could avoid completing a financial aid application. What options exist other than a simplified FAFSA?

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