Pell Grants
and
America’s Future
National Alliance of Community and Technical Colleges
Annual Meeting
by
Stephen G. Katsinas, The University of Alabama
Janice Nahra Friedel, Iowa State University
Linda Serra Hagedorn, Iowa State University
Minneapolis, Minnesota
July 12-13, 2012
THANKS for the
OPPORTUNITY
Data Sources/Acknowledgments
1. Our evolving research team includes scholars from
* The University of Alabama, Education Policy Center
* Iowa State University* University of North Carolina at Charlotte
* Mississippi State University, Stennis Institute of Government
* Rural Community College Alliance, National Rural Scholars Panel
Principals in our Pell Grant Research Team are Steve Katsinas & Frank Mensel
(Alabama), Linda Serra Hagedorn and Janice Nahra Friedel, (Iowa State),
and Mark D'Amico (UNCC), and Ed Davis (MSU).
2. WE THANK OUR TEAMS OF STUDENTS: Joyce Lui (ISU), Rebecca
Midkiff, Melissa Tarrant, Rhonda Wilgo, Chad Clark, Dustin Smith, Lucas Adair (UA)
3. WE ALSO THANK OUR UA/EPC FELLOWS: Senior Fellow Vincent A.
Lacey, and Fellows Michael A. Kennamer, and Clint Kinkead
WE ESPECIALLY THANK FRANK MENSEL and ROBERT PEDERSEN,
whose commitment to access and the social uplift community colleges
provide inspires us today
GEOGRAPHY MATTERS:
3 studies of Pell conducted in past 2 years
1
The Growing Impact of the New Pell Funding,
A Profile of 205 Colleges in 25 States (April 2011)
AND
2
A Statewide Profile of Pell's Impact in Iowa
(April 2011)
3
Pell Grants and the Lifting of Rural America's
Future (The Kansas Study) (February 2012)
Debunking Pell's Urban Myth
1. Myth: needy, low-income minority students
who receive most of the Pell Grants attend our
nation's urban community colleges.
2. The reality: Pell is a rural program, too!
* More rural than urban or suburban community college
students use Pell to access the American Dream
* Transportation and child care, identified as barriers in
the 1970s, are still barriers, especially in rural areas.
* The lack of timely USED/NCES data makes telling Pell
story to public policymakers unnecessarily difficult
More rural community college students rely on federal,
state, and institutional GRANTS…and more incur DEBT
NUMBER of
NUMBER in Cohort Enrolled at Colleges who
Carnegie
Basic
Received Received Incurred
Classification
Total
Total
Received Received State/
Institu- Student
Federal
Loan
of Associate’s Enrolled Students
ANY
Local
tional
Grant Aid Grant Aid Grant Aid
Debt
Colleges
Students in Cohort
Aid
Rural
3,391,856 257,029
Suburban 2,999,931 171,595
Urban
3,149,138 146,416
Total
9,540,925 575,040
PERCENT of
36% 45%
30%
Suburban 31%
33% 25%
Urban
100% 100%
Total
Rural
180,571 111,559
80,903
42,498
62,780
82,454
46,944
50,896
11,141
22,805
90,036
60,331
51,957
10,021
21,153
353,061 218,834 183,756
63,660 106,738
PERCENT in Cohort Enrolled at Colleges who
51%
23%
26%
100%
51% 44% 67% 59%
21% 28% 18% 21%
28% 28% 16% 20%
100% 100% 100% 100%
Source: Hardy and Katsinas, 2007 analysis of 2005 IPEDS SFA Cohort Study Survey
GEOGRAPHY MATTERS
1
The Growing Impact of
the New Pell Funding A Profile of 205
Community Colleges
in 25 States (April, 2011).
The Education
Policy Center
The University of Alabama
Methodology
1. Three public flagship universities with strong
community college leadership programs partnered
with the Rural Community College Alliance.
2. Survey conducted from July to December 2010.
3. All data we collected would eventually be reported
via IPEDS, but not in policy-relevant timeframe.
4. Working with National Council of State Directors
of Community Colleges members, complete/near
complete results were obtained from 9 states
(CO, FL, IA, KY, LA, ND, RI, WA, & WY).
Research Questions
CONTEXT: Two consecutive 2-term U.S. presidents
promised a $5,000 Pell Grant, but could not deliver.
Thus, for about 20 years, the maximum Pell Grant
remained flat while college costs rose dramatically.
Starting in 2007, and again in 2009 and 2010, federal
Pell funding saw large increases.
QUESTIONS:
1. What was the impact of ARRA's Maintenance of
Effort provisions?
2. What was the impact of new Pell funding?
3. Were there differences by community college
type?
Maintenance of Effort AND Pell increases
LOWERS the Marginal Cost of Attendance
08-09 09-10
Average Tuition & Fees
Average Books & Supplies
Average T&F + B&S
$4,011
$1,684
$4,235
$1,741
$5,695 $5,976
Average Pell per Student
$3,654
(12 months)
in
Average Key
$2,041
dollars
Attendance Costs
Remaining
AFTER
by
Pell Award(s) percent
$4,150
Change in
Dollars %
$246
6%
$57
0%
$281
5%
$496 14%
$1,826 -$215 -10.5%
39% 31%
MOE + Pell = More Students Taking More
Credit Hours at 205 Community Colleges
(12 month calendar year)
`
Pell Awards
Unduplicated
Headcount
Enrollment
Change
2008-9 2009-10 Number %
679,600 1,062,338 382,738 56
$1,414,780,743 $2,384,554,208 $969,773,465 69
2,773,257 3,025,490 252,233
Pell Awards as a % of
Headcount Enrollment
25%
FTE Enrollment
1,322,590
ALL Pell Grant Awards
as a Percentage of Total
Annual FTE Enrollment
51%
9
35%
1,504,289 181,700 14
71%
America's Summer 2010 Community College
Enrollment Spike Is Driven by Pell
Summer Pell
Grant Awards
Unduplicated
Headcount
Enrollment
2008-9
2009-10
Pell I
Pell II
152,263
264,631
58,775
Pell I+II
152,263
323,406
Total
714,724
786,501
Pell as %
of Total
21%
41%
Total
292,262
338,048
52%
96%
FTE Enrollment Pell as %
of Total
Rural Colleges
benefitted most
PELL GRANT AWARDS AS A
PERCENTAGE OF...
Unduplicated Headcount
Enrollment
Full-Time Equivalent
Enrollment
Carnegie Class
Rural Small
2008-9
51%
2009-10
71%
2008-9
72%
2009-10
97%
Rural Medium
36%
51%
55%
77%
Rural Large
27%
47%
44%
70%
RURAL, SUB-TOTAL
Suburban, SUB-TOT
Urban, Single Campus
Urban, Multicampus
Urban, SUB-TOTAL
32%
33%
31%
31%
37%
30%
31%
50%
51%
44%
46%
53%
46%
47%
50%
56%
48%
50%
41%
50%
49%
75%
84%
67%
71%
57%
75%
71%
GRAND TOTAL
32%
48%
49%
73%
Suburban, Single Campus
Suburban, Multicampus
Senator Pell’s Idea
• Students without sufficient financial resources
who had the talent, drive, and ability should
receive a grant to get a college education.
• Eligibility determined by need and award
amounts related to the cost of education at the
institution the student attended.
Today
• The Pell Grant program dominates the federal
education budget.
• Despite regular increases in funding, the purchasing
power of Pell Grants has diminished significantly over
the last three decades.
• The number of students eligible to participate in the
program has grown substantially
• Continued growth is projected
• Anticipated increases in program costs
Pell Expenditures
• Expenditures on Pell grants increased from $8-billion in 2000-1
to $18-billion in 2008-9 and $35-billion in 2010-11.
– In 2010-11, Pell took half the DOE budget and is the federal
government's single biggest expense on higher education.
• The number of recipients increased from 4 million in 2000-1 to
6 million in 2008-9 and 9 million in 2010-11.
• The average grant increased from $2,000 to $3,000 to $3,800.
– In constant 2010 dollars these figures are $2,600, $2,900, and $3,800
– In 2010-11, 35% of all undergraduate students received Pell Grants, up
from 20% a decade earlier.
Pell and Other Loans
• Most Pell Grant recipients also have to take out
student loans to pay for college
– Pell Grant recipients are more than twice as likely
to take out loans as students who do not receive
Pell Grants (63% vs. 30%)(NPSAS, 2007-080
– Among Pell Grant recipients who graduate from
four-year colleges, nearly 9 out of 10 have student
loans, and their average debt is $24,800—$3,500
more than their higher income peers.
New Pell Legislation
• 6 year limit on benefits
• Bans for students without a high school
diploma
• Considered for 2013
– Questioning of the inclusion of living expenses in
the Pell eligibility formulas for distance education
students
Latest News (July, 2012)
• The U.S. Dept. of Ed announced it will study how
expanding access to the Pell could affect students’
earnings and employment.
• Two experiments
– Relax the policy that disqualifies students with bachelor’s
degrees from receiving the grants.
• Eligible students must be unemployed or underemployed, and must
be pursuing a career-training program up to a year in length.
– Reduce the duration and intensity of programs in which Pell
Grant recipients must participate.
Darker Side of Pell?
• Causes higher tuition costs?
– Basic economic theory suggests that the increase in
demand for higher education brought about by the
system of grants and loans will increase the price of
higher education
– Private 4-year colleges increased listed tuition
prices by more than two dollars for each dollar
increase in Pell Grants, and public four-year
colleges increased tuition by 97 cents for every
dollar increase (Wolfam, 2005; Lee, 2010)
Pell and Fraud?
• New integrity regulations went into effect on
July 1, 2011
– Students who drop out must repay what they did
not earn—and are not eligible for more aid until
they do
– Satisfactory Academic Progress
• Students must be progressing towards a credential to
continue to receive federal aid (Satisfactory Academic
Progress
– Schools are required to report suspected abuse
Annual Error Rate
• Current
– Of the $36.5 Billion, $1 Billion improperly funded (2.7%)
• Improper Payments
– federal funds go to the wrong recipient,
– the recipient receives the incorrect amount of funds (either
an underpayment or overpayment),
– documentation is not available to support a payment, or
– the recipient uses federal funds in an improper manner.
Projected Improper Payments
GEOGRAPHY
MATTERS
The Growing Impact of New Pell
2
Funding:
A Statewide Profile of
A Statewide
Profile
of Pell's
Iowa's
Community
Colleges
Impact
in Iowa (2/12)
(April 2011)
Complete or nearly complete statewide data
were obtained for the states of Colorado,
Florida, Iowa, Kentucky, Louisiana, North
Dakota, Rhode Island, Washington, and
Wyoming
The Education
Policy Center
The University of Alabama
Maintenance of Effort AND Pell increases
lowers Iowans' marginal cost of attendance
Change in...
08-09 09-10
Average Tuition & Fees
Average Books & Supplies
Average T&F + B&S
$4,793
$1,427
$5,019
$1514
$6,220 $6,533
Average Pell per Student
$3,735
(12 months)
in
Average Key
$2,485
Attendance Costs dollars
Remaining
by
AFTER
Pell Award(s) percent
$4,543
Dollars
$226
$87
%
5
6
$313
5
$808
22
$1,989 -$495 -20%
40% 30%
MOE + Pell = More Iowans Taking More
Credit Hours at Iowa's Community Colleges
(12 month calendar year)
`
Pell Awards
2008-9
35,555
2009-10
62,205
Change
Number %
26,650 75
$84,616,438 $158,318,967 $73,702,529
Unduplicated
Headcount
Enrollment
157,236
176,477
Pell Awards as a % of
Headcount Enrollment
23%
35%
FTE Enrollment
91,170
104,503
ALL Pell Grant Awards
as a Percentage of Total
Annual FTE Enrollment
Analysis of data obtained from the Iowa Department of Education,
Division of Community Colleges and Workforce Preparation
39%
87
19,241
12
13,333
15
60%
The Education
Policy Center
The University of Alabama
Iowa's Summer 2010 Community College
Enrollment Spike Is Driven by Pell
Summer Pell
Grant Awards
2008-9
2009-10
Pell I
Pell II
6,983
14,899
6,618
Pell I+II
Total
6,983
37,609
21,517
42,292
Unduplicated
Headcount Pell as % of
19%
Enrollment
Total
Total
26,000
FTE
Enrollment Pell as % of 27%
Total
51%
30,930
70%
The Education
Policy Center
The University of Alabama
More Iowa students earn more credits
Pell investments produces declining marginal cost* so that more
low-income Iowans can attend Iowa community colleges,
Academic Year 2008-9 to Academic Year 2009-10
Decrease in
Marginal Costs
15%
10%
5%
+12% +15%
0%
Increase in FullTime Equivalent
Enrollment
-5%
-10%
Increase in
Headcount
Enrollment
-20%
-15%
-20%
The Education
Policy Center
The University of Alabama
More Iowans earn more Summer Credits
New Pell investments produces declining marginal cost* so that more
low-income Iowa students can attend Iowa community colleges,
Summer 2008-9 to Summer 2009-10
20%
10%
+12%
0%
-10%
-20%
-30%
-40%
-35%
+19%
Decrease in
Marginal Costs
Increase in
Headcount
Enrollment
Increase in FullTime Equivalent
Enrollment
* Remaining average Pell
Grant Award after key
attendance costs of Tuition &
Fees plus Books & Supplies
are deducted from average
Academic Year Pell Award.
The Education
Policy Center
The University of Alabama
Final Thoughts: 2020 Goals
“By 2020, America will once again have the highest proportion of college graduates in the
world…..I ask every American to commit to at least one year or more of higher education or
career training….. Every American will need more than a high school diploma.
President Barack Obama
Address to Joint Session of Congress
February 34, 2009
“America cannot lead in the 21st Century unless we have the best educated, most
competitive workforce in the world”
President Barack Obama
Remarks on Higher Education
April 24, 2012
“Higher education can’t be a luxury – it is an economic imperative that every family in
America should be able to afford.
President Barack Obama
State of the Union Address
January 24, 2012
The Education
Policy Center
The University of Alabama
The Challenge of Capacity: Actual and Projected Traditional
College Age Youth (18 to 24), 1996 through 2025
26,000,000
25,000,000
24,000,000
Since 2000,
nearly 3 million
MORE 18-24
year olds
Projections STAY high; they DO NOT
include undocumented students
1 million
MORE 18-24
year olds from
2009 to 2012
23,000,000
22,000,000
ACTUAL
numbers of
18-24 year
olds
21,000,000
20,000,000
19,000,000
PROJECTED
estimates of
18 - 24 year
olds
18,000,000
1996
1998
2000
2002
2004
2006
2008
2010
2012
2014
2016
The numbers seeking access will rise whether or not public
higher education institutions are funded to serve them!
Data are based upon live births and deaths from USDHHS and not education statistics
2018
2020
2022
2024
The Education
Policy Center
The University of Alabama
Pell Grants
and
America’s Future
National Alliance of Community and Technical Colleges
Annual Meeting
by
Stephen G. Katsinas, The University of Alabama
Linda Serra Hagedorn, Iowa State University
Janice Nahra Friedel, Iowa State University
Minneapolis, Minnesota
July 12-13, 2012
THANKS for the
OPPORTUNITY