The reduced purchasing power of the Pell Grant

by Grace

Cornell professor of political science Suzanne Mettler writes about how federal student aid has become less effective in promoting opportunity”.

…  In the 1970s, the maximum Pell grants for low-income students covered nearly 80 percent of costs at the average four-year public university, but by 2013-14 they covered just 31 percent. Presidents beginning with Bill Clinton introduced costly new tax policies to help with tuition, but these have failed to improve access for the less well off.

Perhaps if Pell Grant funds were spent more efficiently, they could be used to cover a higher percent of costs for qualifying students.

‘Pell Grants Shouldn’t Pay for Remedial College’

 … A huge proportion of this $40 billion annual federal investment is flowing to people who simply aren’t prepared to do college-level work. And this is perverting higher education’s mission, suppressing completion rates and warping the country’s K-12 system.

Current Pell Grant spending is wasteful.

About two-thirds of low-income community-college students — and one-third of poor students at four-year colleges — need remedial (aka “developmental”) education, according to Complete College America, a nonprofit group. But it’s not working: Less than 10 percent of students who start in remedial education graduate from community college within three years, and just 35 percent of remedial students earn a four-year degree within six years.

One solution would be to limit Pell Grant eligibility to students prepared to do college-level work.  That could be accomplished by having colleges establish minimum requirements for admission based on rigorous entrance exams.

Related:  We spend $40 billion yearly on Pell Grants, but we have no idea about results (Cost of College) 


19 Comments to “The reduced purchasing power of the Pell Grant”

  1. Given the current furor over “high stakes testing” in K12, do you really think Americans would stand for colleges establishing admission requirements “based on rigorous entrance exams”?
    The trend in fact seems to be going the opposite way – get rid of the need for remedial education by state mandate. Just wave the magic wand, and presto! students no longer need remedial courses. That is what Florida has done.
    We have the educational system we deserve….


  2. I suspect that high stakes testing would be more accepted if it were tied in with handing out money for higher education. Well, at least among some segments of the population.


  3. So you would only test the students who get the money? That could lead to the anomalous situation of colleges populated by poor bright kids and stupid wealthy kids…Personally, I think an entrance exam should apply to all, and tuition should be low for all. But I still think most people would scream because most Americans do not like the idea of their child’s education being determined by an exam, in the Chinese or German way.


  4. I agree that an entrance exam should apply to all, but I guess it’s even more important for students receiving financial aid.


  5. If it is a public U, in some sense all students get financial aid, though that amount has been dropping in the past decade. I think that the amount the state kicks in should go up, and there should also be higher entrance standards.


  6. Reblogged this on The College Money Man Blog and commented:
    It’s becoming nearly worthless to those who need it at the university level.


  7. @CSProfMom, I agree that higher entrance standards for state Universities are the way to go given the subsidization of state ed. However, for private universities that want to pay for smart poor kids, but take in rich dumb ones to subsidize the cost I don’t have a problem with that. In fact, thats pretty much the system we have now. Look at the recent report by NPR on Duke University (

    However, if we used testing combined with intended major to determine who gets aid, we could invest more of it in fewer people. It may not be popular to say, but our nation needs more STEM teachers in high schools than we do art history majors. A person has every right to major in art history; that doesn’t mean we should subsidize it.


  8. Testing yes, but I’m wary of the government basing financial aid on selection of major. It has too much potential for unintended consequences, and I’m not confident that government bureaucrats should be making decisions about the most valuable majors.


  9. Grace: I agree that the government is essentially inept at most things. However we spend billions with no way to track outcomes. No one wants to say that one major is better than another. However it’s already done: we offer the TEACH grant to help develop teachers because it’s needed: given the money is to be spent anyway, might as well take the next step and encourage STEM graduates with it over other majors. The worst that could happen is what we already have…nothing to show for it.


  10. When we say STEM, we really mean computer science. Kids with physics degrees have just as much trouble finding jobs as art history majors. And given the extremely cyclical nature of the computer science job market, I am not sure we should be decreeing that X number of slots are available for CS. Just 10 years ago, everyone was being advised to avoid CS because of outsourcing.


  11. Actually, I strongly prefer the Science(education), Engineering, Math portion of that equation. I agree their are many physics majors with the same problems as LA graduates. As for CS, I have come to find that so many that are getting jobs in coding are usually not CS majors. Specifically in Front and Bank end web development, UX design, iOS/Android development, and other coding work. I am even in the middle of classes for Ruby on Rails retraining.

    But in the long run, we will never have enough funds to meet the needs and rising costs of education. At some point a decision will have to be made to invest our dollars wisely. I am just not absolutely certain how to accomplish it.


  12. The top employers have gotten fussier and want CS degrees these days. That is a bit of a change. That is because a lot of projects now require deeper CS knowledge. If you are working with massive datasets, you need to know a thing or two about algorithms, data structures, and performance. The people who “just code” are always offshoreable


  13. You can definitely do web development without knowing anything about CS, that is for sure. It is all pretty straightforward. But, for example, my husband works at a financial company that mainly hires people with grad degrees in CS. That is because the algorithms make up a lot of their business intelligence.

    If you take the T out of STEM, you still have CS, since it is really an engineering field (and is housed in engineering schools at many universities, including my graduate university)


  14. “When we say STEM, we really mean computer science.”

    Not everyone does. There are a lot of non-CS STEM majors that are needed, e.g., electrical engineers, chemical engineers, material scientists, statisticians,……

    And physicists can get jobs. I’ve known physicists who worked for tech companies doing R&D.


  15. Physicists can get jobs, just not in physics.🙂. Most of our physics majors also minor in CS so they can get a job. The financials employ lots of them to write software. Unfortunately, they are the WORST software developers ever – people make jokes about the spaghetti code written by physics PhDs. I am glad that our physics majors actually do the CS minor because it gives us a chance to teach them actual CS priniciples so they won’t become the butt of jokes.


  16. Yes, actually statisticians are in demand now if they know how to work with large datasets. It is very computational, though, so they usually need a lot of CS too. And agreed that engineers of all stripes are needed. Of course, I do think that CS is an engineering field anyway.


  17. I agree with CSProfMom that CS is properly viewed as an engineering discipline (it is at the university I teach at). Statistics is also treated as an engineering discipline here.

    Unfortunately, most of the physics students here do not pick up any useful skills on the side (like programming or electronics), so are not particularly employable. Luckily they don’t have many majors, so not too many kids are hurt by the lack.


  18. “Statistics is also treated as an engineering discipline here.”

    Interesting, I had no idea.



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