Over the past year, policymakers and advocacy groups have made unprecedented efforts to try to address affordability issues for universities across the country. The solutions they were looking for, including free community college and doubling the Pell grantwe now know that this is unlikely to actually happen.
Carl Salerno
On the spectrum of affordability, low-cost community colleges Already registered many low-income students. Yet what the public and policy makers really want is for more public and private not-for-profit four-year colleges to do the same. The wealthiest school in the country, Harvard University, had an acceptance rate of just 3.4% last year. In actual numbers, Harvard accepted a class of fewer than 2,000 students while rejecting over 55,000 students and sitting on an endowment valued at over $50 billion.
Unfortunately, even for moderately selective four-year institutions, the pursuit of prestige often blocks more enrollment from lower-income students, who often need more help than wealthier students to persist in college and get degrees. It is simply cheaper to recruit students who need less than students who need more.
This fundamental business fact discourages selective schools from enrolling more low-income students, but it need not be. Congress can put its thumb in the balance and make it cheaper to recruit and serve low-income students.
How? ‘Or’ What? By providing direct funding to institutions that are willing to serve disproportionately more low-income students. The federal government is already doing something similar for historically black colleges and universities and other minority-serving institutions. In other words, Congress should create a “Pell-Serving Institution,” or PSI, designation.
It could be as simple as having a school’s minimum undergraduate enrollment threshold for Pell recipients, or perhaps we reward funding policies such as foreclosure or tuition reduction. for low-income students. A PSI designation could also be tied to endowment spending per student, which would force wealthier institutions to use their resources to do more.
Regardless of the qualification criteria, institutions that meet the threshold would then be eligible for additional federal funding to help cover the additional cost of supporting these students through graduation. It is not enough for colleges and universities to simply enroll low-income students. We need to tie funding to institutions that complete the work and to graduate students.
For prospective students, a PSI designation would be a valuable signal when purchasing schools. This suggests that an institution prioritizes those who need more financial support in general. For institutions, this offers the opportunity to secure much-needed additional funding to provide more teaching and overall support.
Directly funding institutions that enroll more low-income students on top of Pell is a better policy than doubling the Pell grant when you consider that almost every dollar of Pell given to a student ends up in the account anyway. bank of an institution. Pell may promote competition and choice, but it does not provide more money per student than wealthy students provide.
Providing funding to institutions directly solves the aforementioned cost dilemma, but it does even more: it gives the federal government financial leverage to preserve Pell’s purchasing power.
In the past, Congress has unsuccessfully relied on gimmicks like shame lists to help control rising tuition fees. With the PSI designation, the federal government would have a new tool to preserve the purchasing power of the Pell Grant. It could simply make maintaining the tuition increase for low-income students a prerequisite for earning the PSI designation.
Institutions that already support large Pell populations would welcome the injection of funding and, at least initially, dollars spent this way would benefit less selective schools that already rely heavily on state grants.
Giving students dollars in the form of vouchers to help fund training at the schools that best meet their needs is important from an equity perspective. And giving schools dollars that can be used to signal support and reward investments in students who need the resources the most is just good economic policy.
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