GAO Report Identifies Second Chance Pell Implementation Challenges, Urges ED to Evaluate

By Allie Arcese, Sr. Director of Strategic Communications & Engagement

By Allie Bidwell, NASFAA Senior Reporter

In evaluating the Department of Education's (ED) on going Second Chance Pell pilot program, the Government Accountability Office (GAO) identified several challenges some participating schools faced—such as establishing eligibility and navigating verification for incarcerated individuals—and urged the department to more thoroughly evaluate the pilot program.

GAO analyzed summary-level data from the 2016-17 and 2017-18 academic years of the pilot program and interviewed 12 institutions of higher education, as well as ED officials in writing the report. Since 1994, incarcerated students have been prohibited from receiving a federal Pell Grant. Recent research has suggested that lifting that ban and opening up Pell Grant eligibility to the more than 460,000 otherwise eligible individuals currently in prison could save states as much as $365.8 million each year in incarceration costs by helping those who are ultimately released from prison to be more employable and less susceptible to recidivism.

In the first two years of the pilot program, participating institutions disbursed about $35.6 million in Pell Grants to more than 8,700 students. Still, the non-generalizable sample of schools interviewed said they encountered some challenges implementing the program, and developed new methods to address them. Officials from half of the schools interviewed, for example, said some students did not know or have access to their Social Security Number. Others found that common reasons applicants were initially ineligible for Pell Grants was because they did not register for Selective Service, and some had federal student loans in default.

While just 2% of FAFSA applicants in the general population had not registered for Selective Service, about 15% of FAFSA applicants in the pilot program's first year had not registered. According to GAO, school officials found that many were continuously incarcerated from ages 18 to 26, but had trouble obtaining documentation in some circumstances. Schools can determine an applicant is not ineligible for a Pell Grant for failing to register for Selective Service if: he was "unable to present himself for registration because of reasons beyond his control," or he is older than 26 and when he was between 18 and 26 "he did not knowingly and willfully fail to register with the Selective Service."

Similarly, about 2% of FAFSA applicants in the general population had existing loans in default, compared with about 10% of applicants in the first year of the pilot program. While borrowers typically can rehabilitate their loans, doing so can be more challenging for incarcerated individuals, GAO said. Officials from one school told GAO applicants "generally cannot make phone calls to set up loan repayment plans," and instead have to rely on postal mail. Another said applicants may have to rely on family outside the prison to make payments, which is not guaranteed.

Schools also encountered problems with financial aid verification—a process that is already complicated and burdensome for students in the general population.

"Communication between the applicant, the applicant's family, and the school's financial aid office is limited by virtue of the applicant's confinement," the report said. "For example, incarcerated applicants were typically unable to be reached via phone or email to answer questions, according to school officials we interviewed, and completing verification paperwork sometimes required multiple trips to the prison, which in some cases was more than an hour away."

Some incarcerated applicants also did not have access to personal records, such as copies of high school transcripts, or tax records.

ED guidance indicated that institutions may in some circumstances accept alternate forms of documentation, such as documentation from the prison showing the applicant was incarcerated for a certain tax year, rather than requiring the applicant to obtain a letter of non-filing.

But the challenges were amplified, schools said, due to the high verification selection rate among incarcerated applicants. Overall, 76% and 59% of FAFSAs were selected for verification in the two years examined. By comparison, the verification selection rate for the general student population was 53% in 2017-18, according to the report.

Schools reported hiring additional staff to manage the increased workload, and making adjustments like collecting FAFSAs earlier in the second year to account for additional time to collect documentation.

When GAO provided ED with a draft of the report, which urged ED to evaluate the program, ED responded saying it was already evaluating the program and would continue to do so. However, GAO said that "at the time of our review [ED] was not able to provide evidence that it was evaluating the pilot and stated on more than one occasion that it planned to report descriptive information about the pilot's outcomes … because it did not have funding for an evaluation."

"We are pleased to see that [ED] is not planning to evaluate the pilot and report on the pilot's objectives, and accordingly, we revised our report and recommendation to state that [ED] should complete its evaluation," the report said. "An evaluation of Second Chance Pell that goes beyond summarizing descriptive information can help provide policymakers with the information needed to make decisions about the future of Pell grants for incarcerated students."


Publication Date: 4/8/2019

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