The Rising Cost of College
In the 21st century, the cost of higher education has more than doubled and is growing annually at a rate of 6.8% a year. With inflation and the economic effects of Covid-19, a survey of over 10,000 college students found that 56% of students can no longer afford tuition. With college affordability being a highly contested topic at all levels of government, there are many arguments surrounding federal aid amounts and eligibility. Currently, Americans cumulatively owe approximately $1.75 trillion in student loans, with federal loans accounting for nearly 93% of that total.
The Pell Federal Grant Program
The Pell Federal Grant Program is the largest federal grant program for undergraduate students. These grants do not need to be repaid, and students must fill out the Free Application for Federal Student Financial Aid (FAFSA®) form in order to assess need. The amount awarded depends on family contribution, cost of attendance, status as part-time or full-time student, and plans of attending for a full year or less.
In March 2022, Congress passed an omnibus spending bill that increased the maximum and minimum Pell Grant award amount. The bill expanded a maximum award from $6,495 to $6,895, and a minimum award of $650 to $690 for the 2022-2023 school year. This increase is less than Biden’s original Build Back Better Plan, which did not pass in Congress. This plan would have included a Pell Grant maximum increase to $7,045.
The Case For Expansion
One argument for expansion of the Pell Federal Grant Program is that there are instances of unmet need for low-income students. This occurs when grants are added to a student’s expected family contribution (EFC), yet still fall short of the institution’s cost of attendance (COA). Many low-income students are hindered from attending college since they need to find additional means of paying (loans, earnings, etc.), contributing to the racial and socioeconomic gaps within higher education. 78% of students from the highest quintile of socioeconomic status seek a 4-year degree, while only 42% of students from the lowest quintile of socioeconomic status pursue a 4-year degree. This additional aid can also help increase the rate of college completion for low-income students, as these grants can be used on basic need essentials such as housing, food, and healthcare giving these students the chance to focus solely on their education.
The Case Against Expansion
One argument against further expanding the program is that policies driving down college costs and different alternatives may be more effective than putting more money into the Pell Grant Program. In the 2020 fiscal year, expenditure on the Federal Pell Grant was over 29 billion dollars. A more market-based approach by policymakers may be more efficient in making college more affordable. This could be seen in additional funding going towards lowering college tuition costs through regulating for-profit colleges, creating a private lending market to drive down tuition prices, and other similar measures as opposed to expanding the Pell Grant Program.
