Report Details Erosion Of Pell Purchasing Power, Suggests Strategies To Improve Equity

By Charlotte Pollack, Policy & Federal Relations Staff 

On Tuesday The Pell Institute and PennAHEAD released their new report, “Indicators of Higher Education in Equity in the United States: 45-Year Report,” co-authored by Laura Perna and Margaret Cahalan, during an event held at The National Press Club in Washington, D.C. The goal of this project was to report the status of higher education equity and identify policies and practices that promote, or potentially hinder, progress. 

Some key findings, which compared data from 1970-2012, included: 

  • Over the past decade, the share of Pell Grant recipients enrolling in a 4-year rather than a 2-year institution has declined slightly (from 57 percent to 55 percent), while the share of non-Pell recipients enrolling in a 4-year rather than a 2-year institution increased (from 71 percent to 75 percent).
  • In 2012, students who received Pell Grants were roughly 3.5 times as likely to attend a private-for profit college as students who did not receive Pell Grants, up from 2 times as likely in 2001.
  • From 1974-2012 the average cost for college grew from $8,858 to $20,234, but the amount covered by a maximum Pell award only grew from $4,690 to $5,550. A decline of 67 percent of average cost covered by max Pell Grant in 1974 to 27 percent in 2012.
  • Declining state and local support shifted the share of higher education revenues paid by students and families from approximately 33 percent in 1977, to approximately 49 percent in 2012.
    • The share of higher education revenues provided by the federal government was about the same in 2012 as in 1980 (12 percent). 

The report concludes with an essay each from each author addressing policy implications and strategies for increasing equity. Co-author Margaret Cahalan, Ph.D., director of the Pell Institute for the Study of Opportunity in Higher Education included 16 strategies for widening equity of participation in higher education that included:

  • Setting place based achievement targets
  • Supporting competency-mastery based learning and recognition of prior learning
  • Restoring public funding at the federal, state, and local levels to earlier levels and restoring Pell Grants to their former buying power
  • Universal free tuition for community college and first two years at 4-year college
  • Incentivizing completion through conversion of loans to grants upon completion

A large focus of the project includes “Searching for Solutions with Shared Dialogues” so attendees at Tuesday’s event engaged in roundtable dialogues to discuss “the top three changes to improve equity in higher education.” Emerging ideas included:

  • More counseling for Pell Grant recipients
  • Shifting perception of college completion as an individual good to that of a collective good
  • Exploring cost containment strategies in higher education
  • Addressing the issues related to transfer credits
  • Updating the narrative on who goes to college

NASFAA is exploring competency-mastery based learning and recognition of prior learning, among other things, through the work of the Innovative Learning Models Task Force and previously reported on President Obama’s America’s College Promise proposal.


Publication Date: 2/5/2015

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