Pell Grant Commitment in 9th Grade Could Aid College Planning

By Caralee J. Adams — February 14, 2013 2 min read
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Imagine that as early as 9th grade students know how much they can count on in federal grants to pay for college.

Giving students a “Pell Promise” that would guarantee the amount of federal money available after high school graduation is among the policy consideration unveiled Wednesday by the National Association of Student Financial Aid Administrators.

“An early commitment program could have great behavioral effects by introducing a level of certainty for low-income students and families as they decide whether to pursue higher education,” says the new policy brief, Reimagining Financial Aid to Improve Student Access and Outcomes. “It could also have the impact of getting those students on a college-ready track at an earlier stage.”

A Pell Grant (maximum $5,550 yearly) is available to students with an average annual household income of about $30,000 to help pay for higher education expenses, and it does not have to be paid back.

To determine eligibility early, “low income” could follow existing means-tested programs such as Temporary Assistance for Needy Families (TANF), Supplemental Nutrition Assistance Program (SNAP), and free or reduced-price school lunch, NASFAA suggests.

Such a move would require more of a long-term commitment on behalf of the government to guarantee a certain level of Pell funding, but the report suggests the funding has been stable and will likely not decrease — making such a promise reliable.

“The underlying economic theory is simple: People respond to incentives. A Pell Promise program could incentivize students and families by providing a commitment of funds toward a level of education that may otherwise seem unattainable,” the report says.

There was a provision in the Higher Education Opportunity Act for a pilot project on an early federal Pell Grant commitment, but it was never funded, said Megan McClean, director of policy and federal relations for NASFAA, an 18,000-member organization of student-aid professionals. One avenue to test this policy proposal would be to fund a demonstration program in the reauthorization of HEOA this year, she suggested.

“There is generally a lot of good feeling among our members around the idea of students having a better idea early on [about financial aid] so they are able to plan and predict,” said McClean. “To know the money is there can shift the mindset and help students earlier to realize college is a possibility.”

Still, funding for such a program is uncertain, and questions remain, such as how to handle a student who is Pell eligible as a high school freshman but not after graduation, added McClean.

Other policy considerations in the NASFAA brief include:

• The value of institutional and student “skin in the game,” such as incentivizing Pell Grant recipients to take more credit hours;

• Student-loan reform, protecting academically unprepared students from default, and implementing an automatic Income-Based Repayment plan for all borrowers; and

• Rethinking entitlement and professional judgment by providing schools with tools to limit excessive borrowing.

A version of this news article first appeared in the College Bound blog.