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Doubling Pell Grants Is A Terrible Idea

April 27, 2016

By Preston Cooper

A new report from the Pell Institute provides a comprehensive overview of various indicators of equity in access to higher education in America. One statistic in particular has been making the rounds in the media: Pell Grant awards have not been keeping up with college costs. It is a striking point—but, while rising tuition is certainly a problem, boosting Pell Grant spending may actually be counterproductive.

Pell Grants, which have existed in some form since 1965, are a federal program that provides funds to colleges to help pay the attendance costs of students from low-income backgrounds. The chart displays the increase in maximum awards on Pell Grants next to the concurrent increase in college costs. At first glance, the chart demonstrates a failure of federal student aid to keep up with the rising cost of higher education—to the detriment of students, who must then fill the gap with loans, wages or savings.

That is the conclusion reached by Pell Institute senior scholar Tom Mortenson, who argues in a supplementary essay that in order to keep up with tuition inflation, Pell Grant maximum annual awards should increase to $13,000, more than double the 2016-17 maximum of $5,815.

The cost of college has indeed increased exponentially. At public four-year institutions, the cost of attendance (including tuition, fees, room and board) has increased 148% over the past 40 years. At their private counterparts, cost of attendance has risen almost as much, 144%. But Mortenson’s preferred policy prescription confuses cause and effect. Indeed, the bulk of the economic evidence indicates that college cost inflation over the past few decades is partially a result of Pell Grants themselves.

Read the full article at Forbes.com: Doubling Pell Grants Is A Terrible Idea

Issue Categories : Education,