Wednesday, March 31, 2010

Pell Grants are Supposed to Help Students Not Tuition Increases

Pres. Obama signed the new direct lending to colleges bill. This will lead to an increase in the amount of Pell Grant money for students. The maximum grant right now is $5,350. Pres. Obama expects the maximum grant to rise to $5,975 by 2017.

So that’s good? Right?

Not necessarily. It is only good if colleges and universities do not take the increase in Pell as a basis for raising tuition and fees as they almost always do. Schools figure that if there is additional Pell funding available to students, they might as well just increase the costs of attending around that amount since the whole thing will balance out. It won’t cost the students any more money if tuition goes up since Pell will cover it. Right?

Well…‘Taint necessarily so.

First off, that is a maximum Pell allowance for some students. Not everyone gets the full amount of Pell. Further, just because Congress and the President authorize an increase of$200 a year in Pell does not mean that the full increase automatically goes to every Pell recipient. There is a formula based on family or personal income that determines how much Pell a student is allowed. And depending on the formula, even if Pell goes up and individual student’s amount of Pell may not budge at all.

The actual amount of Pell a person receives depends on the student’s Expected Family Contribution (EFC), the total Cost of Attendance (COA), and status (full-time, half-time, etc.). The EFC depends on a number of factors and not what the family actually has available to contribute but what the federal formula decides the family should be able to put into the cost of attending college based on the Free Application for Federal Student Aid (FAFSA). After filing a FAFSA, the student receives a Student Aid Report (SAR), or the institution receives an Institutional Student Information Record (ISIR), which notifies the student if he or she is eligible for a Federal Pell Grant and provides the student's EFC. The total Cost of Attendance (COA) is not just tuition but all costs determined appropriate and required to attend.

The actual amount of Pell also depends on a student’s attending status, i.e. full-time, part-time, half- time. Full Pell of $5,350 is for full-time attendance, usually 12 credit hours or more. Three-quarter time which oddly enough can cost almost as much as full-time is some schools since part-time credits can cost more is as much as $4,013. The additional cost of less than full time credits is designed to push students into full-time status which benefits the school most often in funding formulas and Pell received. Half-time is up to $2,675 and less than half-time is only $1,338. Fixed costs are supposed to be approximate to the time in classes but that is not always so. For example, one trip to campus for three classes is the same as the same trip for one.

Therefore in the case of many students, an increase in Pell has little or no additional benefit depending on how the total formula falls out. The benefit is only assured to the poorest students who always need the increase just to pay the current tuition rate. The current tuition rate; not an increased one. These students are struggling to make the extant costs never mind increased ones. Increasing college costs in no way helps these students who struggle just to make today’s costs. In fact, increasing tuition and fees because it is matched by Pell just puts these students further behind in the ability to pay for college because all their other costs of attending are also going up.

Pell is not just to cover tuition and the hidden tuition we call fees. Pell is meant to help cover the additional required costs of attending school, pay for books, educational supplies, transportation, child care and the like required to go to college. So if a school increases tuition by say $200 which is what Pell has been increasing by each year, the additional Pell does not help pay for ever-increasing book costs which seem to go up in amazingly avaricious ways each year. Nor does it leave money to pay for the other increasing costs of attending.

The intention of Pell was to help students who may not have the funds to attend college (most of them) gain some assistance in paying for education. Pell was never designed as a means to help colleges raise tuition and fees. Pell was not to be a fiscal support for colleges but that is what it seems to have become. An excuse to allow colleges, universities, community colleges and career colleges to increase their budgets and bottom lines.

I can recall the discussions of colleague when I was a college president about how we could increase tuition now since Pell was going up. We saw the Pell increases as our money, our revenue source not that of students to help them affords school. We saw it as a way to afford to pay for all the things our college communities wanted so we could keep them happy. And since Pell was free money to students we did not feel all that guilty taking that additional federal money by increasing costs to the very people Pell was supposed to help. We all should have but we didn’t. Some of us didn’t do the real math that would have shown us that by raising costs to attend along with increased Pell only made it tougher for students to afford the higher costs. We saw it all as a win-win; not as the win-lose it really was.

Using Pell as a “guilt free rational” to increase the very costs they were designed to decrease to students is wrong and defeats the purpose of Pell Grants while adding to the cost burden of students. We need to stop it and help the students Pell was intended to aid and we claim to care about. A primary service to students we can provide is assisting them afford our services. If we take away the benefits of Pell by increasing costs, that is a dis-service to students.

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1 comment:

nisha said...

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