The Agenda

NRO’s domestic-policy blog, by Reihan Salam.

Higher Education Shell Games


In a new report on the Pell Grant program, Stephen Burd of the New America Foundation’s Education Policy Program outlines how many U.S. colleges and universities design their policies to enroll as many affluent students as possible. Alex Holt of New America summarizes Burd’s findings:

Burd uses data, many of which are available through our Federal Education Budget Project database, on Pell Grant enrollment and net price for the lowest-income students at thousands of individual colleges. The analysis shows that hundreds of public and private non-profit colleges expect the neediest students to pay an annual amount that is equal to or even more than their families’ entire yearly earnings. As a result, these students are left with little choice but to take on heavy debt loads or to behave in ways that are demonstrated to reduce the likelihood of earning their degrees, such as working full-time while enrolled or dropping out until they can afford to return. Only a few dozen exclusive colleges meet the full financial need of the lowest-income students they enroll. Nearly two-thirds of the private institutions analyzed charge students from the lowest-income families, those making $30,000 or less annually, a net price of over $15,000 a year.

Many private colleges have small endowments, making it extremely difficult for them to provide adequate support to those students with the greatest need. According to the report, the poorest schools are often the ones that enroll the largest share of federal Pell Grant recipients, but they charge these students high net prices because of their own limited resources. At the same time, many of these institutions provide deep tuition discounts to wealthier students to attract those high-achieving students to the school.

A number of public universities are pursuing similar strategies — rather than focusing aid resources on students who might not otherwise afford to go to college, they use them to attract the strongest students, most of whom would attend college even at higher cost. Holt concludes on a discouraging note:

And worse yet, there is compelling evidence to suggest that many schools are engaged in an elaborate shell game: using Pell Grants, the primary source of federal aid for low-income students, to supplant institutional aid they would have provided to financially needy students otherwise, and then shifting these funds to help recruit wealthier students. This is one reason that, even after historic increases in Pell Grant funding, the college-going gap between low-income students and their wealthier counterparts remains as wide as ever.

Holt’s analysis raises the question of why so many Republican lawmakers are unwilling to subject colleges and universities that receive large amounts of federal funds to increase access to greater scrutiny


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