Separate and Unequal: College Board Pell Grant Proposal Tackles College Completion, Solutions Fall Short

April 23, 2013

By CLASP

Last week, the College Board Study Group released its proposal to redesign the Pell Grant program to meet changing student needs. The proposal, Rethinking Pell Grants, which was authored by a 14-member panel of national higher education researchers and leadership, puts forth a plan to restructure the Pell Grant program into two separate and targeted programs based solely on the age of a student: “Pell Y” for younger students and “Pell A” for adult students (defined as 25 and older). We commend the College Board Study Group for recognizing the needs of all students, both young and old(er), as well as recognizing that many students need additional supportive services beyond financial aid to successfully persist and complete their programs.  Still, we remain concerned about the implications of a separate and unequal Pell Grant program that threatens to cut benefits for students based solely on age.

Importantly, a major proposed reform is that Pell A and Pell Y grants would be calculated differently. Among students in the Pell Y program, eligibility would be based on their parents' income as a percentage of the federal poverty level, whereas a student in the Pell A program would receive a flat grant (or partial grant) based (tentatively) on the average cost—including books and supplies—of community colleges.   This would be a stark departure from the current Pell grant program, which considers a number of factors including the cost of attendance, income, and living expenses required to be successful in school such as dependent care, transportation, and other significant “indirect costs.” These indirect costs are particularly relevant for adult students who must continue to cover such costs while pursuing a degree or certificate. Instead of including allowances for these living expenses in the Pell grant calculation, the proposal relies on an unrealistic assumption that federal and state workforce and income support programs alone can shore up these students’ living expenses and dependent care costs while in school.

The authors claim that such a bifurcated Pell program will serve all students better.  Yet increasingly, students no longer fall into typical traditional-versus-nontraditional or younger-versus-older categories. Is the College Board’s proposal going backwards by dividing students into rigid categories at a time when there are more “gray areas” between students than ever before?  Will an age-based student aid system lead to “tracking” students and creating eligibility “cliffs,” limiting financial aid eligibility and potentially limiting future choices?

The College Board Study Group presented the report as a framework and hopes to engage stakeholders to explore the implications of such a proposal and work to refine details. As such, CLASP poses key questions below in areas that we believe the proposal would benefit from refinements.

Is age the most important characteristic related to student completion trends?

The rationale for this proposal, stated by the panel, is that younger and older students vary across numerous dimensions all highly correlated with age. They claim adult students have lower completion rates and are more drawn to occupational, shorter-term programs. Though older students may indeed be more focused on programs that are well-connected to job opportunities (as are many younger students), we disagree with the claim that age alone dictates completion rates.

In fact, data from Achieving the Dream colleges show no significant difference in completion rates among students by age group. Instead, factors associated with lower completion rates included enrolling on a part-time basis, being referred to developmental education, and not having a chosen program of study/major.

Furthermore, data from the National Student Clearinghouse, which tracks the progress of students even as they transfer between institutions, show that differences in completion rates by age may have more to do with student choice of institution and enrollment status. At community colleges, adult learners and younger students have nearly identical completion rates. Furthermore, while older students who attend full-time complete at higher rates than their part-time peers, both these groups have higher completion rates than younger students who attend part-time.

Does determining financial aid eligibility based on a single characteristic—such as age—move in the wrong direction for improving equity in higher education?

Much attention and effort has gone into increasing equity in higher education across various types of student characteristics from race to income to family background. In that spirit, the goal of the federal student aid system is to ensure access and equity across disadvantaged groups of students. But the report draws a bright line between students based solely on age and gives no consideration to need and credential goals. Drawing such an arbitrary distinction between groups of students does not serve all students better and actually introduces inequality into the student aid system at a time when we are trying to reduce inequalities in access and success in postsecondary education.

Undergraduate students are increasingly diverse, and traditional students are quickly becoming the minority. Currently, among students 23 and younger, nearly one-sixth (14%) are independent, assuming no financial assistance from their parents. Furthermore, fully one-half of younger students are enrolled at community colleges, which are more likely to support occupationally focused learning. The College Board Study Group proposal could result in students in the same programs receiving vastly different financial packages, based on their age alone rather than the factors that contribute to their ability to pay for college, such as their income and having dependent children.

The proposal also introduces inequality into the system by suggesting that Pell A adult students should rely solely on federal and state assistance programs to cover living expenses while in college. CLASP believes the federal government and states should take steps to improve access to these assistance programs among low-income students. Nonetheless, we ask: How feasible is it for adult students to rely primarily on public benefit programs for living expenses in an era of reduced funding and tight eligibility requirements? (See discussion below.)

Will this proposal reduce postsecondary access and affordability, particularly for adult students? 

Current student aid law takes into consideration not only the cost of tuition, fees, books and supplies, but also a modest allowance for basic living expenses. This is designed to recognize that students, particularly those who are independent and may have children, face a myriad of costs associated with attending college which may include lost wages due to having to work fewer hours. But grant aid and the contribution low-income students can afford to make fall woefully short of high and growing college costs, and the vast majority of low-income students still have considerable unmet need (the amount they must pay above and beyond their expected family contribution and grant and scholarship aid). New analysis by CLASP shows that, while high percentages of low-income dependent and independent students have unmet need, over 98 percent of independent full-time community college students with incomes in the bottom three quartiles (≤$30,622) had unmet need in 2007-2008. Among the lowest-income students, the gap was as high as $10,181. This growing gap between college costs and financial aid is forcing students to borrow more, work more, enroll in fewer classes, lengthen their time in college, and, in some cases, drop out of college entirely.

Pell A establishes Pell award levels based on a flat income eligibility level (yet undetermined) that does not vary based on the needs of students. This has the potential to increase the level of unmet need among these students, keeping college further out of reach and decreasing completion rates among these students.

Given the current capacity and low eligibility levels of federal and state workforce and income support programs, is it realistic to assume many students will be able to secure sufficient support to meet their living expenses?

The proposal hinges on an unrealistic assumption that Pell A students will have greater access to other training resources and income supports. However, public investments in education and training programs that might help to cover these costs – such as career-technical education, workforce development, and adult education -- have been slashed over the last three years alone by 16 percent, before the devastating impact of sequestration.

CLASP applauds the panel for beginning a conversation about how to improve student access to income supports such as the Supplemental Nutrition Assistance Program (SNAP), housing subsidies, Medicaid, and Temporary Assistance for Needy Families (TANF) cash assistance.  However, these supports should be seen as supplements to the portions of financial aid that can be devoted to living expenses, not replacements for them. Relying on these programs as a main source of financial support for students is not realistic for a number of reasons:

  • Income support programs have numerous eligibility requirements and rules that would make many needy students ineligible to receive them. In order to be eligible, students must frequently fall far below the poverty line, have dependent children, or work.  Students are explicitly excluded from SNAP eligibility unless they meet specific requirements.  Other programs, such as housing subsidies and child care assistance, are capped and only reach a small share of qualifying households—and TANF is time-limited.
  • Income support programs also vary significantly by state; in 2012, the maximum monthly TANF benefit for a family of three ranged from $170 in Mississippi to $923 in Alaska.  
  • While encouraging the federal government and states to streamline access to these supports for students is a good idea, incentivizing states to make benefits available to students may have the unintended consequence of limiting access to benefits for other low-income individuals who are more needy than students.
  • The capacity to assist low-income students to enroll in these programs does not currently exist on the vast majority of college campuses.

Assisting students to enroll in income support programs is out of the purview of most student aid officers. If asked, they would likely say they do not have time, nor do they know enough about the programs to be helpful. And, today, they are generally correct. However, a number of campuses are building this capacity into their institutions, in student aid offices as well as in other offices on campus. On most of these campuses, individual staff are not expected to know all of the rules; most are also not expected to spend significant amounts of time assisting students. These institutions are seeking ways to strike a balance that will enable them to use existing staff to provide additional information about income supports, without losing current capacity to connect students with financial aid. In order to be successful on a large scale, simplification of financial aid and other processes, not unlike what is proposed in the report, would be required. And, even so, only students who met the eligibility requirements would be able to receive assistance through these means. Income supports are financial resources that could contribute to the living expenses of a sub-group of students, but they are not viable solutions for all students.

The report recommends the federal government encourage and incentivize states to allow students to use income support programs while enrolled in college. CLASP wholeheartedly agrees with the report’s recommendation that federal and state governments should reform programs so they do not needlessly discourage students from pursuing postsecondary education and training.  Many states restrict eligibility for state-administered programs --including cash assistance under TANF and child care subsidies -- for those pursuing postsecondary attendance to students who work part- or full-time, despite what we know about part-time attendance leading to lower completion. In addition, Congress should remove federal barriers to access. For instance, college students are excluded from receiving assistance through SNAP unless they meet one of a set of “exemptions.” This can leave likely eligible students either assuming they are ineligible or confused about how to prove they are.  While encouraging the federal government and states to streamline access to these supports for students is a good idea, given capped federal funding for benefit programs such as TANF and child care subsides, incentivizing states to make benefits available to students may have the unintended consequence of limiting access to benefits for other low-income individuals.

CLASP also commends the authors of the report for making students in the under-25 age category whose parents receive means-tested income supports automatically eligible for the maximum Pell award. They recommend including orphans and wards of the court, as well as recipients of TANF, Medicaid, public housing benefits, or Supplemental Security Income (SSI).

Additionally, the report recommends requiring students receiving Pell A grants, but not those receiving Pell Y grants, to utilize services of one-stop career centers before enrolling. We believe the proposal misses the opportunity to include traditional aged students in this effort. These students should receive the counseling and career guidance the panel recommends for adults, as well as the assistance accessing additional financial resources in the form of public income supports. Another reason to include Pell Y grantees in this conversation is to connect all low-income students with new health coverage. Starting in 2014, the majority of students will be required to enroll in health coverage and many more will be eligible for Medicaid and other subsidized or inexpensive coverage. Ignoring the potential to connect this group to assistance has implications not only for assistance with housing, food and transportation, but especially for students who will be newly eligible for health coverage.

We appreciate that the panel has spurred a conversation about how to best serve adult students, and how federal and state income supports could play a role in doing so. As more detailed proposals develop, CLASP recommends that any reforms of Pell should consider—and thoughtfully address -- the capacity of these programs, their disparate rules and requirements, and the often-challenging political circumstances in which they are administered.

We commend the College Board Study Group for highlighting the importance of Pell Grants and other student aid for both younger and older students and for particularly thinking hard about the additional supports adult students need, such as increased college and career counseling and access to other supportive services. However, the proposals to redefine student aid eligibility based on age alone and to limit the types of college costs that adult students can include in their grant calculation sets up a separate and unequal student aid system. In helping low-income students – especially adults -  obtain more financial resources for college, the solution is not to create an arbitrarily bifurcated system of aid that gives one group an advantage over another. The solution is to keep college costs from growing and to find ways to help students access a broader range of financial resources above and beyond student financial aid.

 

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