Resources & Publications

If It's Not Broke ...

Apr 13, 2011

By Vickie Choitz

If all you have is a hammer, everything looks like a nail.

In the case of the U.S. House 2012 budget proposal, the chosen tool was a hacksaw, which was severely misapplied to critical education, workforce development and other opportunity-promoting programs.  The proposal notably spared generous tax cuts for wealthy households and ignored revenue generating tools.

The Pell grant program is one of the targets for cuts. Although the proposal specifics are vague, the stated reasons for cutting the program are clear - and misguided.

The proposal purports that deep Pell cuts are necessary because the program has grown too big. As the full House weighs the proposal, it should consider what impact deep program cuts will have on students trying to get education to be more marketable in our increasingly competitive economy.   

About forty percent of the recent growth in Pell expenditures is due to increased enrollments, driven by workers returning to school during a poor economy and the largest high school graduating classes in decades. Many students also qualify for the maximum grant due to the sluggish economy and stubbornly low incomes. As the economy recovers and the number of high school graduates declines due to an aging population, college enrollment growth will slow substantially. It's projected to increase by half as much over the next decade as it did in recent years.  So this source of rising Pell spending will ease.

The other 60 percent of recent Pell spending growth is due to deliberate choices Congress made over the last few years to update the program. It was important to begin to reverse decades of decline in the purchasing power of the Pell Grant, which fell from covering nearly three-quarters of the cost of attendance at a typical public four-year college (72 percent) in 1976 to covering just one-third of the cost of attendance at a typical public four-year college in 2008. Congress improved the program to better meet the needs of a new generation of truly needy students - nontraditional  adult students, a group projected to  grow twice as fast as that of traditional age students coming years. Undoing these updates will undermine efforts to bring Pell into the 21st century.

The House budget proposal suggests that Pell may not be targeted to the "truly needy." The vast majority of Pell funds go to students in families that make less than $40,000 annually in an era when a family of four needs almost $68,000 annually just to have basic economic security in this country. It's quite clear the program is targeted to the "truly needy." The House proposal cited an old study that found a correlation between tuition increases at private universities and Pell Grant increases. Considering that more than twice as many students attend public universities as private universities - 28.5 percent compared to 12.5 percent - and even more attend public community colleges (34 percent), it is imprudent to make such a weighty policy proposal on such a small slice of the Pell pie.

Making deep cuts to Pell is the wrong direction for federal higher education policy, especially since, by 2018, nearly two-thirds of all jobs will require at least some postsecondary education. Without Pell Grant investments to help even more students to attain these skills and credentials, our economy will lack the skilled workforce to grow the economy and we will miss this mark.


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