Pell grants under fire


Guest post from,  Steve Foerster

For nearly forty years, the Pell Grant has been part of the American higher education landscape. This program, awarded to students on the basis of need, was originally called the Basic Educational Opportunity Grant, but was renamed for Senator Claiborne Pell, who had been the driving force in Congress to enact it.

As a program that involved the government giving away money that didn\’t have to be repaid, the Pell Grant became very popular with students and institutions. But now it seems that the Pell Grant may be a victim of its own success. in the 2010-2011 school year nearly $33 billion is being distributed on behalf of nearly nine million students. This is twice as much money as the program distributed just two years ago, and four times as much as was distributed ten years ago. Even in Washington that\’s an alarming rate of the growth of an expenditure.

This rapid recent growth has a number of causes, but one of them is political. Ever since it was instituted, the Pell Grant belonged to a select group of entitlement programs that were considered very dangerous for politicians to criticize or for which to propose spending cuts. Its being politically untouchable was despite the possibility that the Pell Grant program is not without its drawbacks. As with all such programs, guaranteed grants and loans increase the amount of money that is available to colleges and universities, all but guaranteeing that tuition rates and fees will rise to soak up that available funding. And it\’s been argued that if there is to be government funding of higher education for individual students that loans are a better deal for taxpayers than grants. Pell Grants are meant for the poor, but if the objective is that they are spent on an education that leads the poor to be financially self-sustainable, than loans would do just as well without all the expense to taxpayers.

That said, when the overall federal budget is considered, the Pell Grant program is a drop in the bucket. Federal spending in fiscal year 2010 was about $3.5 trillion, meaning that the Pell Grant program was less than one percent. But in an era with trillion dollar deficits, even the most profligate spenders in Washington are seeing that something has to change, and as a result even those programs that have previously been untouchable are being scrutinized to see where they might be cut.

The Pell Grant is one of those programs. Right now there are a variety of proposals being floated for how it might be changed. One of the proposals in particular has the potential to affect eLearning significantly — it\’s been suggested that the Pell Grant only be available in Spring and Fall term, and that it no longer be available to those students studying in the Summer. This proposal comes from the traditional school calendar, in which most students are in their late teens or early twenties and go home for the summer to work, or just bum around. Those in eLearning often don\’t see Summer semester as any different from any other, and the schools that cater to us are often designed with continuous enrollment in mind. Should the Pell Grant be changed to apply only to certain parts of the year, it will be very interesting indeed to see how eLearning institutions and the students who make use of them adapt.