Report: Pell Grant Purchasing Power Down at Public Colleges and Universities

Related Topics in the Ref Desk: Pell Grant; Cost of Attendance

By Owen Daugherty, NASFAA Staff Reporter

Students from low-income backgrounds have increasingly fewer affordable higher education options available to them, according to a new report.

The report from the National College Attainment Network (NCAN) found that less than a quarter of public four-year institutions were considered affordable for a student receiving an average-sized Pell Grant award for the 2018-19 academic year, and less than half of two-year public colleges were affordable during the same time period.

The findings come at a particularly concerning time, as undergraduate enrollment at higher education institutions is down across the board and those without college degrees are the ones hit hardest by the lack of job opportunities as the economy recovers from the effects of the coronavirus pandemic.

The affordability gap, defined by NCAN in the report as the amount of unmet financial need, for the average Pell Grant recipient in 2018-19 was $2,524 at four-year public institutions and $855 at two-year institutions.

Even though the 2018-19 academic year provided the most recent data available for the report, it underscores the college affordability landscape before the onset of the pandemic, likely meaning the current state for students hailing from low-income families is even worse now.

“Given the devastating economic effects of COVID-19, it is reasonable to posit that college affordability will only worsen unless policymakers intervene,” the report states, pointing to indicators such as enrollment decline and a decrease in FAFSA completion rates. 

Due to the fact that the Pell Grant no longer holds the purchasing power it once did, with rising tuition rates and stagnant investment from Congress, in the 44 states with college affordability gaps at four-year public institutions identified in the report, students receiving Pell Grants had an average of $3,160 in unmet financial need.

Additionally, the report found that 23 states saw decreases in their percentage of affordable public institutions between 2014-15 and 2018-19 and there were zero affordable four-year institutions in 10 states for all five academic years examined.

To combat the worrying trend, the report calls on lawmakers this session of Congress to double the maximum Pell Grant award.

“Doubling Pell would restore the maximum grant’s purchasing power to cover half of the cost of attendance for an in-state student at a public four-year university,” the report adds.

NASFAA has also been active urging lawmakers this session to double the maximum Pell Grant award, joining NCAN and nearly 1,200 organizations in a letter to Congress calling for the increased investment. 

President Joe Biden called for a $400 increase to the maximum Pell Grant award in his initial budget proposal and last week in the second part of his infrastructure plan called for $80 billion in funding for the program to increase the maximum award by $1,400. The $1,400 increase to the Pell Grant serves as a “down payment” on Biden’s campaign commitment to double the maximum award, the plan noted. 

“A strong investment in the Pell Grant program would go a long way toward rebuilding public postsecondary education with roots in equity,” the report concluded. “The policy choices Congress makes today will have consequences for the potential of a generation of students.”


Publication Date: 5/4/2021

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