Why do so few low-income students go to college? Is it simply because there is not enough federal financial aid available? Or are there other factors at play?
These are vital questions to answer considering that the federal government spends about $35 billion a year on the Pell Grant program, which annually provides low-income students up to $5,730 each to help pay for college.
Despite the government’s huge investment in the program, the college-going rates of low-income students continue to lag far below those of their more-affluent peers. In fact, the gap in college attendance between the highest- and lowest-income students remains as wide as it was in the 1970s, when Congress created the Pell Grant program.
Many financial-aid advocates and college lobbyists say that the only problem with the government’s student aid programs is that they have not been adequately financed. After all, the percentage of the cost of attending a public four-year college that is covered by the maximum Pell award has fallen significantly over the past 40 years—from 77 percent in 1979-80 to 30 percent in 2014-15. These advocates argue that if Congress dramatically increased the maximum grant amount, millions more low-income students would be able to gain access to college.
But many higher-education researchers believe the problem is more complicated than just inadequate funding. They worry that the complexity of applying for aid may blunt the impact of federal programs. Low-income students may not know that financial aid is available or how to access it, and thus conclude at an early age they will not be able to afford college.
In the most recent volume of the Journal for Higher Education, two respected researchers—Robert Kelchen of Seton Hall and Sara Goldrick-Rab of the University of Wisconsin at Madison—offer a creative proposal aimed at preventing this outcome: a pilot program guaranteeing the maximum Pell Grant to low-income eighth-graders who complete high school and enroll in college.
This “early commitment” program would be modeled after similar efforts that several states and a number of cities and towns have undertaken to motivate financially needy students to take the academic steps necessary to pursue a higher education.
Take the Kalamazoo Promise, for example. Since 2005, private donors have covered most or all of the public college tuition for students who attended public schools in Kalamazoo, Mich., since at least ninth grade and graduated from high school. The program has offered the promise of higher education at Michigan’s public universities and community colleges to many students who otherwise wouldn’t have considered going.
“One of every three students in the Kalamazoo district falls below the national poverty level. One in 12 is homeless,” according to The New York Times. “Many of them are the first in their families to finish high school; many come from single-parent homes. Some are young parents themselves: Kalamazoo has one of the highest pregnancy rates among black teenagers in the state.”
Evaluations of the program are encouraging. A 2015 analysis of state data by the Kalamazoo Gazette found that a greater proportion of graduates of Kalamazoo public schools go to college than do high school graduates in the rest of the region or the state as a whole.
The Kalamazoo Promise and other similar programs appear to be effective because students know at a fairly young age that college will be affordable for them. Unfortunately, federal financial aid programs don’t offer similar guarantees.
In fact, students don’t currently know how much federal aid they will receive until a college has accepted them and offered them a financial aid package. This is way too late for many low-income students. “After completing three years of high school, students begin a complex process in order to obtain specific information about the costs of college attendance. While nearly all eighth grade students express a desire to attend college, many give up hope long before this point, never considering applying for financial aid,” Kelchen and Goldrick-Rab write. “Figuring that college is out of their financial reach, many high school students from economically fragile families opt for easier high school courses, invest in work or friends rather than school, and stop thinking of themselves as college material.”
Based on peer-reviewed studies of other college access programs, the researchers estimate that adding an early commitment component to the Pell Grant program would increase overall postsecondary enrollment rates by approximately four percentage points—which adds up over time and is nothing to sneeze at. But there are potential downsides to the proposal. First, such a change could make the Pell Grant program inefficient by promising maximum grants to students whose families’ financial circumstances could significantly improve by the time they apply for college. Second, the program’s additional costs to the government could prove prohibitive.
To address the first concern, Kelchen and Goldrick-Rab came up with a concrete way to define the target population. They studied 2,240 children from 1,503 households and determined that the early commitment program would work best if tied to the free and reduced-price lunch program. In other words, the program would promise eighth-graders who receive free or reduced-price lunch that they would get the maximum Pell Grant if they complete high school and enroll in college.
Looking at income data over time, the researchers concluded that such a program would be “reasonably well-targeted, as nearly seven in ten students who would receive the maximum Pell Grant under this new approach” would get it under current rules. The rest of the students would have been eligible for a smaller Pell Grant or would have just missed being eligible for the awards.
With regard to the second concern, Kelchen and Goldrick-Rab estimate that adding an early commitment component to Pell Grants would increase the program’s annual costs by $1.5 billion. However, they project that the government would receive an additional $2.1 billion annually in tax revenues from students who enrolled in and graduated from college as a result of it.
Still, they say there are remaining questions about how effective the program would be. Therefore, before permanently changing the Pell Grant program, Congress should “authorize and rigorously evaluate a demonstration program over a period of several years” to see if it is successful in inspiring more low-income students to take the necessary academic steps to graduate from high school and enroll in college, the researchers write.
This is an exciting plan, and one that Congress should definitely consider. While increasing funding for federal financial aid programs is certainly important, redesigning the programs to make them less complicated and easier to navigate may be just as crucial to increasing college attendance and degree completion rates.