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The peril of cutting Pell Grants

Eliminating assistance for low-income students will hurt America's competitiveness

By David Wilson

12:23 PM EDT, July 21, 2011

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For much of the early history of the U.S., college was only for a small segment of society, the elite. As the need for more practical education and broader access to higher education became apparent if the United States was going to fully develop its engineering and agricultural sectors to outcompete the rest of the world, the federal government passed the Morrill Act of 1862, which promoted the development of land grant universities in each state. That, of course, has paid enormous dividends. The research technology that came out of these institutions built America as we know it today.

After World War II, educational access was broadened dramatically through a generous GI Bill for returning veterans. The payoff from that program is well documented. The Basic Educational Opportunity Grant (now called the Pell Grant) was initiated in the early 1970s with a goal of making college attainable for many students like me, who could not have afforded to go to college without such assistance. Discussions are now underway in Washington to drastically cut this program, thereby closing the door to higher education for scores of students. Funding reductions in the Pell Grant program will result in many deserving lower-income students not being able to achieve middle class status and will have huge implications for the standard of living of the entire nation.

Last year, institutions of higher education in the United States enrolled some 18 million students who were pursuing a two-year or four-year degree. About two-thirds of these students received some type of financial aid.

The federal government plays the predominant role in providing these students with financial aid, virtually all of which is based on demonstrated financial need. The College Board estimates that the federal government accounts for nearly 75 percent of the total aid received by undergraduates in the form of grants, loans, work study and tax subsidies. Hence, any decision to reduce federal aid as a result of federal budget negotiations will have a significant and chilling effect on millions of college students throughout the U.S.

It is unfathomable that the United States will be cutting off access to a college degree for the great majority of poor students in college today, especially at a time when we have dropped in international rankings of degree attainment. Because lower income students complete college at only a small fraction of the rate of higher income students, we must move many more of these students successfully through the educational pipeline if we are going to regain our status in international competition. Reductions in the Pell Grant program would obviously have a significant negative impact on this goal.

The Pell Grant program provides a maximum of $5,500 per year to students who are coming from families who are living at or below the poverty line. Interestingly enough, the overwhelming majority of these students are white. In fact, 46 percent of Pell Grant recipients are white, while 24 percent are black and 20 percent are Hispanic.

At Morgan State University alone, the impact of the program has been tremendous. During the past 12 months, 4,333 Morgan students received some degree of Pell Grant assistance. That is more than half of our total student enrollment, students already trying to better themselves while struggling against the odds to make ends meet. Over one third of these students receive the maximum amount of the grant because they are coming from families living at or below the poverty level.

When the program was first introduced in the early 1970s, it covered the majority of educational costs incurred by the typical undergraduate student. As recently as 1990, the maximum Pell Grant still covered 60 percent of the cost of attendance. Today, the maximum grant pays for only about 30 percent of the average total cost. Students must take out loans to cover the remaining expenses. For many families hardest hit by the economic recession, who have either lost their jobs or had their homes foreclosed on, it has become quite difficult to qualify for a loan. Unfortunately, these students will have very few options if there is a major reduction in the Pell Grant program.

David Wilson is president of Morgan State University. His email is david.wilson@morgan.edu.