Monday, March 22, 2010

A Thought on Pell Grants

Political momentum being what it is, it's looking like the more innovative and interesting parts of the American Graduation Initiative are pretty much dead at this point. To the extent that improvements are likely to happen, it looks like Congress may default to its usual setting, and simply increase the maximum Pell grants.

Uh, thanks, but that means literally nothing to community colleges. Absolutely nothing.

Pell grants are named after the late senator Claiborne Pell, a Democrat from Rhode Island. They're scholarships given to college students who can demonstrate severe financial need. Unlike student loans, they don't have to be paid back, and unlike scholarships from individual colleges, they don't tie you to a given institution. They're intended to give needy students a shot at higher education, and unlike many programs aimed at the needy, they've remained politically popular.

The maximum Pell grant is over $5,000 per year now, and it may get closer to (or slightly over) $6,000 by the time the deals are done. Full-time tuition and fees at most community colleges across the country top out below $4,000, and some (hello, California!) top out well below that. On one level, that's great; it means that needy students can attend the first two years of college tuition-free.

But to the extent that community colleges are bleeding financially -- and are about to bleed much more severely when the ARRA funding runs out -- passing off higher Pell caps as somehow helpful is just a cruel joke. All it does is increase the amount of money left on the table.

Community colleges don't get anywhere near the per-student funding that four-year colleges get. (Gail Mellow, the President of LaGuardia Community College in New York City, makes this point often.) Add lower tuition, and most cc's are really run on a shoestring. Higher Pell caps will make the gap between cc budgets and four-year budgets even greater, since four-year colleges generally already have high enough tuition levels to capture the entire gain from a higher cap. Cc's, which are already gasping for air, will get no help at all from the change. The gap will get even wider than it already is, and that's saying something.

Worse, the only way for cc's to level the playing field and capture their share of the gain would be to raise tuition drastically. Failing to do so is choosing to leave money on the table at a time when money is extraordinarily tight. Of course, drastic tuition increases that wouldn't mean anything to people receiving the full grant would be devastating to students just over that cutoff, whose out-of-pocket costs would skyrocket at precisely the moment when jobs for young people are hardest to find. Since part of the point of community colleges is affordability, there's a strong argument to be made that raising tuition high enough to capture the gains from the Pell grant increase would violate cc's reason to exist.

I salute the impulse to help the students who need it the most, but this method actually won't work. Having your tuition covered doesn't help if you couldn't get the class you needed because we couldn't afford to run it. And stuffing existing classes ever fuller can't help but water down the quality of education over time.

No. If Congress wants to make a meaningful difference for community colleges -- a fine and worthy goal -- the way to do it is to direct operating funds directly to the colleges themselves, and to attach a "maintenance of effort" requirement for the states so the states don't simply cut their own appropriations by the same amount. Make it possible for us to maintain services and quality for all students -- not just those in the Pell program -- and to do it without making the tuition cost spiral even worse than it already is. ARRA funding actually did this, to some degree, so the model is already in place; the key is to get past the short-term expiration date.

Over the longer term, if it really wanted to help, Congress could also make it easier to us to address such structural roadblocks as the 'credit hour.' But I have no illusions that we're there yet. While we get our ducks in a row for that battle, this could help us address the current enrollment surge.

But increasing the Pell grants won't. It's well-intended, and appealing, and politically easy, but it won't help. If you want to help community colleges, you have to do it directly.