By Derek Newton
Reposted from Forbes, with permission
Set aside for low-income individuals, Pell Grants are the largest, most successful effort to open the unquestioned benefits of a college education to anyone. Without them, millions of Americans would not have even considered, let alone finished any education past high school. Right now, the federal government spends about $30 billion annually on Pell, and it’s widely regarded as an outstanding investment.
For years, advocates have pushed Congress to remove some of the restrictions on the grants, waiving, for example, the provisions that limit Pell funds to those without a college degree already or limit the funds to courses and programs that provide college credit and meet a minimum length of instruction time.
Removing these restrictions was always a bad idea.
Fortunately, the Department of Education (ED) decided to test these ideas, to see if offering Pell Grants for very short-term programs – as short as eight weeks – or allowing college graduates to use Pell funds for career training would work.
Spoiler alert: no.
The Institute of Education Sciences (IES) is “the independent, nonpartisan statistics, research, and evaluation arm of the U.S. Department of Education. The IES mission is to provide scientific evidence on which to ground education practice and policy.” Their report testing Pell Grant changes, was released this month.
Specifically, in 2011, ED started two pilot programs. One allowed those with a bachelor’s degree to get Pell funds for short-term career education. The other allowed Pell funds to be used for very short credential programs – programs as short as eight weeks. In both tests, the recipients of funds had to be otherwise eligible, meeting income requirements, for example.
ED measured whether access to Pell funding increased enrollments in training programs, led to higher completion rates, reduced reliance on student loans, improved employment rates, and improved income for graduates.
The results are eye-opening. Summarizing, the pilot programs were good for schools, far less good for students.
ED and IES found that, “offering Pell Grants for short-term occupational training programs to students with low income who have a bachelor’s degree increased program enrollment and completion by about 20 percentage points. Offering Pell Grants for very short-term occupational training programs increased program enrollment and completion by about 10 percentage points.”
Boosts of 20% and 10% are significant and it’s easy to see why schools would push for anything that could put more students in their programs, and therefore more dollars in their budgets.
It’s especially easy to see why for-profit schools would love the idea, since moving money from students and taxpayers to investors is their business. And though they represented a small portion of the test group of participating schools – 72% of the schools in the group were public schools – for-profit schools were included in the IES tests. At the same time, it’s also increasingly difficult to tell who’s actually getting the money since more and more public schools are making deals with for-profit companies to run their short career programs. The name on the door may be a community college, but the program may still be enriching private investors.
In addition to boosting enrollment, Pell funds also increased completion, according to the report. For the degree-holder set, “program completion increased by 17 percentage points.” Pell funds boosted completion in very-short programs by nine points.
That’s also very good. Completion matters.
But we say that because we assume that the result – the degree or the certification – has value. Getting something of no value, is not good, especially if it costs money or time. An education credential costs both.
So, did the test of new Pell awards provide students with something of value? No, not really.
IES says, “Despite boosting program enrollment and completion, offering experimental Pell Grants did not increase employment or earnings in the medium to long term.” And, “Even as unemployment rates recovered to pre-pandemic levels, being offered an experimental Pell Grant some years earlier did not appear to benefit students in the labor market.”
Even when the Pell-funded “short programs [were] geared toward high demand occupational fields,” the IES report found that students “fared no better in the labor market than students offered an experimental Pell Grant for programs in other fields.”
Interestingly, even though it was not statistically significant for the study, those who were not offered the experimental Pell actually earned slightly more money in the review period.
Just as bad, the study also showed that access to Pell funds in these pilot projects did not reduce the number or average amount of student loans.
Which means that students who had access to Pell Grants in these unique ways did not make more money, get jobs more frequently, or reduce their debt burdens, even though they invested their own time and money – on top of what the federal government was paying. Students who were offered Pell Grants in these studies were actually less well-off than before they started.
A successful test, that is not.
The schools benefited, however. Which means these tests wound up being simple transfers of funds from the government to schools, some of which are actually for-profit businesses, with no measurable benefit to anyone else.
Sending more federal dollars to public and non-profit schools is good. But maybe ED and Congress can just do it directly next time, without having to waste the time and money of those they say they are trying to help.
But that won’t happen. Federal policymakers are hung up on the idea that short-term programs work and that they should nudge more students into them. More than likely, Congress and a new administration will ignore this new report and expand funding for short-term Pell programs anyway, specifically including investor-owned for-profit providers. It’s philosophy, not sound policy. At least now we’ll know that when government spending on these programs goes up, it has almost nothing to do with helping students.
