February 10, 2013

Students, Professors Debate Efficacy of Pell Grants

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As Feb. 15 –– the date by which incoming freshmen must submit their financial aid applications –– approaches, professors and campus politicos criticized the state of Pell Grants, a need-based grant for low-income undergraduates, in the University’s financial aid packages.

According to the Office of Federal Student Aid, the maximum Federal Pell Grant award for the 2012-13 year was $5,550.

Jessica Reif ’14, chair of the Cornell Republicans and member of the University’s Financial Aid Review Committee, said that though Pell Grants are an important part of a student’s financial aid package, they no longer form the foundation of financial aid packages at most four-year institutions.

“Pell Grants can make a huge difference for students, particularly at community colleges and less expensive four-year institutions,” she said. “At institutions like Cornell, the maximum award for a Pell Grant only comprises a small fraction of the total cost of attendance.”

For the 2011-12 year, 18 percent of enrolled Cornell undergraduate students received a Pell Grant, according to Thomas Keane, director of financial aid. The number of Pell Grant recipients at Cornell has increased by two percent between the 2009-10 and 2011-12 academic years.

“Generally, students qualify if their family income is less than $45,000 with one child in college,” Keane said. “If there are more children in college, the income figure goes up.”

According to Dan Kuhr ’13, chair of the Financial Aid Review Committee and Human Ecology representative on the Student Assembly, although the grant’s value has not kept up with the cost of tuition, its overall value has been increasing.

“Without a program like Pell, it would make it a lot harder for some students to access higher education,” Kuhr said. “At Cornell, a Pell Grant is a good first step. It can help ambitious students afford Cornell’s tuition and break even.”

Jessie Palmer ’13, president of the Cornell Democrats, said that although Pell Grants do not fund a large part of tuition, they can start a discussion about the cost of college education.

“Pell Grants help to fund the American value of education,” Palmer said. “Financial aid and the cost of tuition should be concerns of all Cornell students, whether or not they receive aid.”

When the Pell Grant was first created in 1972, it was a “terrific program, in terms of the percent of tuition covered,” according to Prof. Suzanne Mettler, American politics and public policy.  However, she said that because the cost of tuition has “skyrocketed” over time, there is a large divide between the price of tuition and the value of the grant.

“Pell Grants create equal opportunity; it’s a way to mitigate inequality,” Mettler said.  “Now, the grant has much less of a role in influencing this income inequality because it hasn’t increased at the same rate as the cost of tuition.”

Mettler said that this gap may cause students from low-income families to drop out of college or not enroll because the gap between the Pell Grant and the tuition is too great.

“Today, people with low incomes are only about as likely to graduate with four-year college degrees as they were in the 1970s,” Mettler said. “This is a disaster in modern economy because our country and our economy needs more people have to have college degrees.  It’s critical for who we are as a nation.”

Prof. Richard Vedder, economics, Ohio University, director of the Center for College Affordability and Productivity in Washington, D.C., said the Pell Grant’s biggest problem is that it does not serve its intended function.

“Many students who are receiving aid through the grant don’t fall into the original targeted demographic,” Vedder said. “I think that we should restrict eligibility to those who are truly poor and show academic promise.”

According to Vedder, the Pell Grant program would be more effective if it was not only need-based but also performance-based.

“The Pell Grant isn’t just supposed to help low-income kids get to college,” Vedder said. “It’s supposed to help low-income kids succeed.”

The grant program also requires downsizing, Vedder said.

“We need a reduction in this program,” he said. “We’re way in over our heads: U.S. debt is huge. We have to either cut back the public expenditures or vastly increase our tax revenue. Part of this reduction has to come out of the federal higher education aid program.”

Reif said that though she supports federal financial aid, there are areas in the Pell Grant system that should be changed, such as federal funds being allocated to for-profit universities.

Mettler echoed Reif’s sentiments, saying that providing grants to students at “for-profit” universities is not an ideal use of government funds.

“For-profit institutions — such as the University of Phoenix — use 25 percent of [federal] student aid,” Mettler said. “However, too often these are almost worthless degrees, that leave their students hardly better off than before they attained their degree, and unable to pay back their loans. Student borrowers who attend for-profits account for nearly half of all student loan defaults.”

But Kuhr said the University has worked to ensure its Pell Grant loan levels will have a significant effect on student financial aid.

“Cornell has adjusted its loan levels for financial aid, to make the program more sustainable,” he said.

Pell Grant recipient Hee Jin Cheon ’16 agreed that the grant helped her afford Cornell’s tuition.

“Although Cornell grants made up a large part of my financial aid, the Pell Grant was important,” she said.  “That additional $3,000 to $5,000 made me be able to come to Cornell. I really appreciate this money.”

Original Author: Emma Jesch