BY MEGHAN HAENN: President Obama hosted a College Opportunity Summit earlier this month at the White House to discuss a variety of proposals to improve collegiate access, particularly for low-income students. The president’s higher education agenda includes a wide range of initiatives, which supposedly build upon recent successes from an increased investment in Federal Pell Grants, a higher education subsidy program that costs approximately $35 billion per year. Despite being the United States Department of Education’s most expensive program, current estimates about the worthiness of this program amount to speculation because the program does not have clearly defined goals or measurable outcomes.
Defining achievement as it relates to the Pell Grant program is difficult since there are a variety of approaches to consider. The U.S. Department of Education’s website says the program “provides need-based grants to low-income undergraduate and certain post-baccalaureate students to promote access to postsecondary education.” This infers the impact is measured by input – the number of students receiving the grant and at what amount, without any criteria for degree attainment. The desired impact should not simply be to help more low-income students get into college, but to help maximize the number of low-income students graduating from colleges and universities.
Unarguably, degree completion is becoming more and more important: an increasing number of jobs in the United States require a college degree, with an estimate from Georgetown University’s Center on Education and the Workforce suggesting as many as 63% of jobs will require a postsecondary degree by 2018. The same report contends that bachelor’s degree holders not only earn more than high school graduates (lifetime earnings difference is estimated to be about $1.6 million), but this gap will continue to increase as bachelor’s degree holders outpace high school graduates in the rate at which their incomes increase (34% increase for college graduates compared to the 15% for high school graduates since 1983). Students who attend some college without finishing their degree are expected to make $472,523 more than high school graduates over a lifetime, suggesting there is a certain amount of economic mobility created by attending “some college.” However, if the President and Congress know the United States is projected to have a shortage of 3 million college degrees by 2018, it should be our economic and educational imperative to encourage Pell grant recipients to complete their degrees – not just start them.
The Department of Education’s current annual report on Pell Grants measures distribution of the grant funding across types of institution, family income level and age, but does not include any information about graduation or retention rates. However, one thorough external analysis of 750 schools performed by Richard Vedder of The Chronicle of Higher Education indicated there is a completion problem among Pell recipients whose graduation rate is estimated to be 40% compared to non-Pell grant recipient graduation rates of 60-65%.
In 2008, Congress requested that postsecondary institutions disclose the graduation rates of Pell Grant recipients at their own individual institutions when the Higher Education Act was reauthorized. However, colleges were not required to actively report these figures to the Department of Education and locating an institution’s Pell graduation rate can still be complicated task. Top-ranked schools such as Harvard, Columbia, Duke, Chicago and Dartmouth have not made the information readily available according to a 2013 investigation by U.S. News & World Report. A 2011 survey conducted by the American Enterprise Institute showed that only 38% of colleges and universities were compliant with the Congressional request for disclosure. Responses from universities in the same survey included the following:
“Graduation rate has little to do with family income if students work hard. I hope you’ll apply!”
“The information you are requesting is not required to be available to a consumer by the Department of Education. Since this is the case, we do not keep track of graduation rates of Pell recipients.”
“Part of the complication is that people may receive Pell Grants one year and not the next so we couldn’t calculate it.”
These responses, three years after the disclosure request, display concerning levels of institutional ignorance.
One simple mechanism for improving understanding of the program is to require postsecondary institutions to report the graduation rates of Pell recipients to the Department of Education or risk losing access to federal student aid. Some reports have suggested institutions of higher education should be held accountable to a goal of graduating a certain percentage of their Pell Grant recipients in order to maintain funding. This policy would likely create a perverse effect in which colleges and universities admitted fewer Pell-eligible students to minimize risk. Alternatively, some have suggested that institutions should be financially incentivized and rewarded for graduating Pell recipients at a higher rate than pre-established benchmarks. The unintended consequences of a policy tool such as this include a proliferation of watered-down degrees and abuse by institutions more concerned with revenue generation than educating its students. The federal government would more greatly benefit by treating institutions as partners in this quest to educate a greater number of low-income students rather than serve as a regulatory agency for student success, a term which varies so greatly in meaning from institution to institution that it would be nearly impossible to create a standard definition.
Critics of this strategy say the federal government is shifting the burden of measurement to institutions of higher education, but this requirement would only add minimally to the amount of data they are already required to report. Annually, the Department of Education collects information from 7,500 postsecondary institutions through the Integrated Postsecondary Education Data System (IPEDS) on topics ranging from cost of attendance and enrollment to number of faculty and graduation rates. Institutions who fail to report are not eligible for federal student aid. It would not be substantially more difficult or cumbersome for universities to track the graduation rates of students by the type of financial aid they received.
However, simply measuring graduation rates will not sufficiently help the federal government determine how to graduate more low-income students. There are many factors that may contribute towards a student’s ability or inability to graduate such as cost of attendance, type of degree, endowment per student (indicative of institutional resources), family income, work status, college preparedness, parent’s level of education, residential or commuter status, whether they themselves are a parent, and racial/ethnic identity. The current lack of information means any significant changes to the program would simply amount to conjecturing rather than evidence-based policy decision-making.
Through annual surveys of Pell recipients, the Department of Education could gain a significantly better understanding of what helps these students persist, thereby helping policy makers construct viable future alternatives for the program. In order to ensure a high rate of compliance, funding could be contingent upon the completion of the survey and administered through institutional financial aid offices much like the entrance and exit surveys for student loans, scholarships and need-based aid. Again, institutions will likely express concern about the increased amount of work, but ultimately, the survey results will also help schools allocate their scarce resources more effectively. In the event institutions remain reluctant to share this data with the Department of Education, it should be the moral imperative of the American taxpayer to ask why.
In December, the U.S. Department of Education requested suggestions for criteria that would comprise the President’s new college ratings system intended to help students understand the value of their degree. It might be time to consider why the federal government is creating a system to hold postsecondary institutions accountable towards creating valuable degrees when the impact of the very same department’s most expensive program has not yet been measured.