Low-Income Students

The Other ‘Pell Runners’

September 8, 2011

According to a recent article in The Chronicle of Higher Education, the U.S. Department of Education is planning to crack down on “Pell runners.” A Pell runner is “a scam artist who bounces from college to college, staying just long enough to receive a Pell Grant refund,” the newspaper reports.

The Education Department is absolutely correct to go after these individuals. Their actions not only hurt the federal fisc, but, if left unchecked, could undermine public and political support for this vital program over the long run.

There is, however, another group of “Pell runners” who may be even doing greater damage to the program’s long-term viability, but are coming under far less scrutiny. We are talking about public and private four year colleges that receive large amounts of  Pell Grant funds but use their institutional aid dollars to attract the students they desire, rather than to meet the financial need of the low-income students they enroll.

As we’ve said before, colleges that engage in financial aid leveraging to buy the best and/or wealthiest students are undercutting the Pell Grant program’s mission of making college accessible and affordable for low-income students. These institutions are, in fact, adding extra hurdles for Pell recipients to succeed, by loading them up with heavy loads of debt, including high-cost private student loans.

Judging by several reports that have been released over the last month, this problem is only getting worse and worse.

The Other Debt Crisis

August 26, 2011
Publication Image

The country is facing a serious debt crisis that threatens to undermine our economic recovery. No, not that one. American households are carrying around $11.4 trillion of debt.

The GOP Proposal for Extreme School-Funding Flexibility

August 18, 2011

States and local school districts have long called for more flexibility in the Elementary and Secondary Education Act (ESEA), whose latest rendition is No Child Left Behind. Last month the House Education and the Workforce Committee proposed a solution by advancing the “State and Local Funding Flexibility Act.”

Taking a Closer Look at Talent Search

August 11, 2011

Federal policymakers have long recognized the importance of raising the college aspirations and improving the academic preparation of students from low-income families so they can enroll in and succeed in college. However, the multiple college outreach and early intervention programs that the government currently supports suffer from significant overlap and redundancies.

To achieve this goal more effectively, policymakers need to develop a more coherent and coordinated strategy than what currently exists. But before they can start, they need a better understanding of the current programs to identify what is working and what is not. To help with this effort, we are taking  a closer look at the strengths and weakness of each of the programs.

Today, we will start by examining Talent Search, which aims to help disadvantaged middle-school and high-school students who have “college potential” pursue a higher education. Talent Search, which is part of the federal TRIO programs, has a long track record of helping highly-motivated low-income students prepare for and enroll in college and apply for federal financial aid. But by focusing on students who are already likely to attend college, the program provides little assistance to low-income students whose potential has not yet been recognized.

Congress established Talent Search in 1965 as part of the original Higher Education Act. Today, the program, which has an annual budget of around $142 million, serves nearly 360,000 students, three quarters of whom are both low-income and the first in their families to go to college. More than two-thirds of the participants are in high school, with most entering the program in the ninth or tenth grade.

The colleges and community agencies that run these projects recruit students based largely on recommendations from guidance counselors and teachers. As a result, the participants tend to be students who have clearly demonstrated that they have more academic potential and motivation than their peers.

The projects provide information and counseling to students, and help them fill out applications for college admissions and financial aid. Participating students go on trips to college campuses and get help preparing for college-admissions tests. In addition, many of the projects provide tutoring to participants struggling in core subject areas.

The program typically takes a “pull out” approach to delivering its services, meaning that project staff members generally pull students out of their classes to meet with them. A large-scale evaluation of the program that Mathematica Policy Research Inc. conducted for the Department of Education in 2004 said that this approach has proven to be “problematic,” and “by some accounts was becoming increasingly so.” With schools under pressure “to ensure students meet certain academic standards” and pass state exams, some teachers are reluctant “to release students for extracurricular activities such as Talent Search,” the evaluation stated.

Overall, Talent Search is considered to be a “light touch” program in that it offers a limited number of services to individual students, and participation in most of the activities is optional. The program spends on average $394 per student, which is by far the lowest of all the government’s college outreach programs. In contrast, the far-more intensive Upward Bound program, which is also part of TRIO, costs nearly $5,000 per participant in federal funds.

Some researchers who have studied Talent Search have questioned the effectiveness of its “low intensity” approach, noting that nearly half of the high schools students who participate receive less than 10 hours of service from the program each year. “Overall, the program still adheres to the original assumption that small amounts of service, delivered at crucial times, can make a difference in students’ decisions concerning college preparation and enrollment,” Mathematica’s 2004 evaluation states. “However, there is no solid evidence on which to judge whether the light touch program model is effective overall or for various subgroups.”

A more recent Mathematica evaluation of Talent Search projects in Florida, Indiana, and Texas produced more promising results. That study, which was published in 2006, found that students participating in the program were significantly more likely to complete high school, enroll in college, and apply for financial aid than non-participants in all three states. For example, in Texas, participants in Talent Search were 14 percent more likely to complete high school, 18 percent more likely to enroll in college, and 28 percent more likely to apply for federal financial aid than their peers. The study’s authors were uncertain, however, about how much credit to give the program for these achievements, especially in the area of high school completion. “If Talent Search staff targeted students with higher college aspirations than otherwise similar students, the analysis will overestimate the effects of participation on outcomes,” the evaluators wrote.

At Ed Money Watch, we have argued that if policymakers believe that raising the college aspirations and improving the academic preparation of disadvantaged students continues to be a valid public policy goal, they need to develop more effective strategy than what currently exists. To do so, it is important they understand the strengths and weaknesses of the existing programs.

Based on our research, here are what we believe to be Talent Search’s most promising aspects:

  • A long track record of helping low-income students who have shown academic promise and have college aspirations achieve their goals
  • A relatively low cost to the government

The program, however, has a number of significant drawbacks that limit its scope and reach:

  • By serving students predominantly in high school, the program is missing an opportunity to have a greater impact. This is important because many higher education researchers agree the middle school years are a crucial time for students to develop college aspirations and to start taking the appropriate courses. Getting low-income students on the college track as early a possible appears to be critical in determining whether or not they pursue a higher education.
  • By focusing on students with “college potential,” the program offers little help to disadvantaged students whose potential has not yet been recognized
  • The program’s “light touch” may not be effective in helping students who are not already motivated to go to college.
  • The program’s pull-out approach to delivering services can be disruptive for participants.

Stay tuned in the coming weeks as we take a closer look at the government’s other college outreach and early intervention programs.

Congress Gearing Up for a Title I Formula Fight

August 9, 2011

Last week, the Title I-derland blog wrote that Congress is gearing up for a Title I formula fight as part of the Elementary and Secondary Education Act (ESEA – currently known as No Child Left Behind) reauthorization process. Given the complicated legacy of the current Title I funding formulas, this is likely to further delay the introduction of a complete ESEA reauthorization bill.

A formula fight is exactly what it sounds like – congressional staff members gather around a table and work out a funding formula (or in this case formulas) that distributes Title I funds among states and school districts in accordance with the program’s stated goal – to provide support for the education of disadvantaged students. Of course, staff members will also aim to ensure that the formula(s) benefits each of their states as much as possible – no member of Congress will vote for a program that shortchanges his or her state or district.

It should be no surprise that the resulting formulas often obscure the relationship between funding and poverty. Currently, Title I funding is distributed through four complicated funding formulas that each assess poverty slightly differently. The Basic grant formula distributes funds based on the number of poor students. The Concentration grant formula provides funds to districts with 15 percent or more students living in poverty. The Targeted grant formula gives more funding per pupil to districts with higher concentrations of poor students. Finally, the Education Finance Incentive Grant formula distributes rewards districts in states with more equitable funding formulas.

Not only do these formulas take into account the number or concentration of poor students in a given district or state, but they also take into account state size, per pupil expenditure, and even the degree to which a state equitably funds low- and high-income schools. While these considerations were intended to guarantee states a certain level of funding, account for the cost of providing an education in a given state, or reward states with more equitable funding formulas, they often undermine the intent of the law.

Ed Money Watch has previously written on this issue, showing that annual Title I allocations per poor pupil do not always benefit school districts with the highest percentages of poor students. In fact, districts in different states with similar poverty rates often receive dramatically different Title I allocations per poor pupil. Read more about this issue here, here, and here.

While it may be tempting to scrap the existing formulas and start over, the legislative process is unlikely to be so simple. Luckily, several organizations have already proposed solutions to the formula problem. The Rural Schools and Community Trust would like to ensure that rural and small school districts get their fair share of funds by eliminating provisions that give more funding to larger districts (called number weighting) and changing the way the formulas take state per pupil spending into account.

The Center for America Progress proposes to replace the existing four formulas with a single formula that would distribute funds based on a weighted count of the number of students in poverty, a cost factor based on the Comparable Wage Index, and a measure of fiscal effort for each state.

In reality, it is more likely that Congress will tinker at the margins of the existing formulas to help ensure a greater degree of equity across states and school districts. Two of the funding formulas – Basic and Concentration – have been part of ESEA for decades and are likely to remain. The Targeted and Education Finance Incentive Grant (EFIG) Formulas, on the other hand, were first written into law in 1994 and are more likely to be the subject of revision. For example, Representative Glenn Thompson (D-PA) recently introduced a bill, called the All Children Are Equal Act, which would alter the Targeted and EFIG formulas to benefit smaller school districts.

Though it’s clear that ESEA reauthorization is still far off, especially given the recent hoopla over Secretary Arne Duncan’s NCLB accountability waiver plan, a formula fight will surely make an already complicated process even more so. However, because the current Title I formulas are flawed to the point of undermining the program, it will be a battle worth fighting for Congress. Better formulas will go a long way in ensuring that Title I funds are supporting the states, districts, and students that need them the most.

On HuffPo This Week: How Local Communities Can Avoid the Summer Slide

August 3, 2011

During the summer break from school, most students lose about a month of learning. For children from low-income families, this loss of learning can be even greater. The summer slide means teachers spend valuable time in the fall reviewing what students should have learned the previous year, instead of jumping right in to new content.

The Next Front in the Pell Grant Fight

August 2, 2011

The debt ceiling legislation that President Obama signed into law today puts the Pell Grant program in a much stronger position in the short term than it would have been otherwise. But the program is not quite out of the woods yet. Congress is still going to have to do some heavy lifting if it wants to maintain the current maximum grant of $5,550 in the upcoming 2012 fiscal year.

As has been widely reported, the debt ceiling legislation provides a one-time infusion of $17 billion for the Pell Grant program, spread between fiscal years 2012 and 2013. The bill would pay for this supplemental funding by eliminating the “in school interest subsidy” on subsidized Stafford loans for graduate and professional students and ending on-time repayment incentives for student loan borrowers. This supplemental funding for Pell Grants replaces short term funding sources that helped boost the maximum Pell Grant in recent years (such as the American Recovery and Reinvestment Act of 2009 and last year’s student loan reform bill) but will run out at the end of fiscal year 2011.

However, Congress will still need to provide a regular appropriation later this year that is sufficient to fully fund a maximum grant of $5,550 for fiscal year 2012. This is going to be a challenge because the debt ceiling bill would cut total appropriations spending by $7 billion in 2012. As the budget experts at our sister blog Ed Money Watch explained yesterday:

To maintain the current maximum grant of $5,550, Congress needs to appropriate $24.2 billion -- an increase of $1.3 billion from the current year level – but the new cap on annual appropriations reduces total spending in 2012 compared to 2011. In other words, Congress will have to find additional funding for Pell Grants while reducing appropriations spending overall.

A Temporary, Albeit Tenuous, Reprieve for Pell Grants

July 28, 2011

As Ed Money Watch reported on Tuesday, the two competing federal debt reduction plans offered by House Speaker John Boehner (R-OH) and Senate Majority Leader Harry Reid (D-NV) include supplemental funding that should shore up the Pell Grant program for the next two years. These proposals, if enacted, would make it significantly easier for Congress to maintain the maximum Pell Grant at $5,550 in fiscal year 2012 and the projected $5,620 in fiscal year 2013.

These plans, however, provide the program with only a temporary and tenuous reprieve. First off, Congress will still need to provide a regular appropriation later this year to fully fund a maximum grant of $5,550 for fiscal year 2012 (and it will have to do it again next year, too). Under both proposals, this appropriation will still have to be higher than the fiscal year 2011 level [see chart below]. That’s going to be difficult as both plans would set strict caps on annual appropriations in aggregate. The 2012 cap set under both plans would require either a $5 or $7 billion cut in total appropriations compared to the 2011 figure. To be sure, the cap applies to all federal programs funded through appropriations, but it will make an increase in the Pell Grant appropriation that much harder.

As a result, Congress may still have to consider changes to the program’s eligibility rules in the pending appropriations bill as a way to reduce the cost of the program. And even if they manage to avoid doing so now, they will certainly have to before the supplemental funding runs out in 2014. In other words, the Pell Grant funding provided in the debt ceiling proposals would give policymakers some more time to engage in thoughtful debate over how to reshape the program, rather than forcing them to ram through changes in the heat of this extremely high-stakes budget battle. But it’s not entirely clear how much time they would have before those decisions would have to be made.

As Ed Money Watch has previously reported, the Pell Grant program is facing a serious budget crisis even as demand for the grants continues to escalate. This is primarily because short term funding sources that helped boost the maximum Pell Grant in recent years (such as the American Recovery and Reinvestment Act of 2009 and last year’s student loan reform bill) will be gone at the end of fiscal year 2011. According to the Congressional Budget Office, Congress needs to come up with $34.2 billion in fiscal year 2012 just to keep the maximum Pell award where it is. That’s an enormous challenge, as the recently-enacted fiscal year 2011 bill provided $23 billion.

Up until now, the White House and House Republican leaders have taken starkly different positions on how to deal with the Pell Grant’s budget problems. In February, President Obama made clear in his fiscal year 2012 budget request that his aim was, first and foremost, to keep the maximum Pell Grant at its current level. He proposed achieving this goal with a combination of spending increases, eligibility changes, and reductions to other student aid programs, including eliminating the in-school interest subsidy on subsidized Stafford loans for graduate and professional students.

In contrast, the House Budget Committee’s Republican leaders called for cutting the maximum Pell Grant and making targeted changes within the program to reduce its costs. Under the plan, which they laid out in a report accompanying the House-passed fiscal year 2012 budget resolution in April, the lawmakers would have dealt with the program’s growing price tag by reducing the size and cost of the program overall, making it less expensive and less generous. Meanwhile, the Budget Committee’s leaders also called for eliminating the in-school interest subsidy for graduate students. They would have, however, used the savings exclusively for deficit reduction, rather than for boosting spending on Pell Grants.

Since then, negotiations over the Pell Grant program have taken place entirely behind closed doors, as part of the larger battle over raising the federal debt ceiling and reducing the budget deficit. As a result, Pell Grant supporters have been mostly in the dark about what the final deal would mean for the program.

That’s why some were relieved to find out this week that President Obama had prevailed in the short term. The proposals offered by the House Speaker and Senate Majority Leader both provide the program with nearly enough emergency funding over the next two years ($17 billion under the Boehner plan and $18 billion under the Reid plan) to fund the current maximum Pell Grant during this period of time. In addition, both plans would predominantly pay for the increase by ending the in-school interest subsidy for graduate students, as the President proposed.

But again, these plans offer just a temporary reprieve for Pell Grants until the supplemental funding runs out in 2014. House Education and the Workforce Committee Chairman John Kline (R-MN) emphasized this point on Tuesday, when he praised the Boehner plan for giving Congress some additional time “to reassess ways to strengthen the program and make it fiscally sustainable for future years.”

Assuming that a final debt reduction bill is passed along these lines, policymakers will hopefully seize whatever opportunity they have over the coming months to have a thoughtful debate that examines the benefits and pitfalls of potential policy options. As we’ve said before, lawmakers shouldn’t decide the Pell Grant program’s future in haste, behind closed doors, and in the heat of high stakes budget battles.

A Temporary, Albeit Tenuous, Reprieve for Pell Grants

July 28, 2011

[Editor's Note: This post ran first on Higher Ed Watch's sister blog, Ed Money Watch]

As Higher Ed Watch and our sister blog Ed Money Watch reported on Tuesday, the two competing federal debt reduction plans offered by House Speaker John Boehner (R-OH) and Senate Majority Leader Harry Reid (D-NV) include supplemental funding that should shore up the Pell Grant program for the next two years. These proposals, if enacted, would make it significantly easier for Congress to maintain the maximum Pell Grant at $5,550 in fiscal year 2012 and the projected $5,620 in fiscal year 2013.

These plans, however, provide the program with only a temporary and tenuous reprieve. First off, Congress will still need to provide a regular appropriation later this year to fully fund a maximum grant of $5,550 for fiscal year 2012 (and it will have to do it again next year, too). Under both proposals, this appropriation will still have to be higher than the fiscal year 2011 level [see chart below]. That’s going to be difficult as both plans would set strict caps on annual appropriations in aggregate. The 2012 cap set under both plans would require either a $5 or $7 billion cut in total appropriations compared to the 2011 figure. To be sure, the cap applies to all federal programs funded through appropriations, but it will make an increase in the Pell Grant appropriation that much harder.

As a result, Congress may still have to consider changes to the program’s eligibility rules in the pending appropriations bill as a way to reduce the cost of the program. And even if they manage to avoid doing so now, they will certainly have to before the supplemental funding runs out in 2014. In other words, the Pell Grant funding provided in the debt ceiling proposals would give policymakers some more time to engage in thoughtful debate over how to reshape the program, rather than forcing them to ram through changes in the heat of this extremely high-stakes budget battle. But it’s not entirely clear how much time they would have before those decisions would have to be made.

Breaking News: Boehner and Reid Plans Both Shore Up Pell Grants for Now

July 26, 2011

[Editor's Note: This post ran first on Higher Ed Watch's sister blog, Ed Money Watch]

Negotiations over raising the debt ceiling -- and what legislative changes should be adopted to reduce the deficit -- are now centered around competing proposals from House Speaker John Boehner and Senate Majority Leader Harry Reid. At this time, it seems likely that one of these proposals, or some mid-point, will be passed by Congress in the coming days.

As Ed Money Watch reported last week, any proposal that Congress ultimately adopts to reduce federal spending would include caps on annual appropriations for future years, and would be enforced by across-the-board spending cuts called “sequestration.” These caps on so-called discretionary spending will squeeze education funding over the coming years as nearly all federal education programs are funded through the annual appropriations process.

Both the Reid and Boehner proposals would put such caps and enforcement rules in place for the next 10 years. Both proposals divide the caps between defense spending and non-defense spending, so that one pot of funding cannot be robbed to pay for the other.

Syndicate content