College & Workforce Readiness

Paige Unveils Proposal To Enhance, Increase Pell Grants

By John Gehring — February 28, 2001 4 min read
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Secretary of Education Rod Paige told higher education leaders last week that the Bush administration would seek to increase the maximum Pell Grant for college undergraduates to $5,100 per year and to fully fund the grant program for first-year students.

For More Information

The report, “Access Denied: Restoring the Nation’s Commitment to Equal Educational Opportunity,” Feb. 21, 2001, is available from the Advisory Committee on Student Financial Aid.(Requires Adobe’s Acrobat Reader.)

Pell Grants, the popular federal financial-aid program for low-income students, are now capped at $3,300 a year for eligible students, meaning that the proposed increase would amount to more than 50 percent for the neediest recipients.

Mr. Paige, speaking at the annual meeting of the American Council on Education in Washington on Feb. 20, also said President Bush would propose further enhancing those grants for students who take college-level mathematics and science courses in high school.

“Under this expansion, low- income Pell Grant recipients who passed Advanced Placement math and science exams—or other college-level courses while in high school—would be eligible to receive an additional $1,000 to pay for college tuition,” the secretary said. “These enhanced Pell Grants will particularly help minority students.”

To encourage more students to enroll in college-preparatory classes, Mr. Paige said the president also would challenge states to establish college merit-scholarship programs. States would receive federal matching funds if they established college-scholarship programs for students who take rigorous courses in high school.

President Bush was scheduled to unveil his budget plan for fiscal 2000 this week.

The administration’s disclosure of its financial-aid proposals coincided with the release of a report that reveals an increasing number of low-income students who graduate from high school face significant financial barriers to college more than three decades after the launch of federal aid programs for the neediest students.

The 29-page report, “Access Denied: Restoring the Nation’s Commitment to Equal Education Opportunity,” released Feb. 21, warns of an impending “access crisis” and predicts the situation will worsen unless federal officials “immediately revitalize” financial-aid programs for needy students.

Produced by the Advisory Committee on Student Financial Assistance, a nonpartisan group created to provide Congress and the Department of Education with an analysis of financial-aid programs, the report asserts the decision on whether to improve those students’ chances to obtain a college degree will have profound consequences for the nation’s economic and social well-being for decades to come.

Rates of college entry and completion for low-income students from families earning below $25,000 a year still lag nearly as much as they did three decades ago—32 percentage points behind those from families earning more than $75,000, the report states. On average, the poorest students fall $3,200 short to cover the costs of attending a two-year, public community or technical college and and $3,800 when enrolling at four-year public institutions.

Middle-Class Tilt

Charles Terrell, the vice president of the advisory committee and the associate dean of student affairs at Boston University Medical Center, said the trend in recent years has been to set up more financial-aid programs based on merit, which generally favor better- off students.

While such aid programs are politically popular with the middle class—the largest single swath of American voters—the result is that less money is available for need-based programs, and that a significant number of low- income students are missing out on the opportunity to attend college, Mr. Terrell said.

Students from poor families often qualify for such merit-based aid, experts say, but can find it difficult to take advantage of the programs because they rely heavily on income-tax credits or deductions, which still require parents or students to pay college costs up front.

Since 1993, state funding for merit-based financial-aid programs has risen 336 percent in real dollars, according to the report. By contrast, funding for need-based programs has risen only 88 percent, it found.

“You want to reward hard work and academic achievement, but what gets lost are the hurdles low-income students face,” Mr. Terrell said. “Merit is fine, but I do believe we have to meet need first.”

Mr. Terrell said the advisory committee had not yet met with officials of the Bush administration to discuss the panel’s findings on financial aid for low-income students. He declined to comment on Mr. Bush’s Pell Grant proposals until committee members have met with administration officials for more detailed discussions.

Michael S. McPherson, a co-author with Morton O. Shapiro of The Student Aid Game: Meeting Need and Renewing Talent in American Higher Education, said the financial-aid crisis for needy students would be exacerbated if the worthy goal of having more low- income students attend college is met."We are not prepared as a nation to step up to the plate on this,” Mr. McPherson, the president of Macalester College in St. Paul, Minn., said. He added that federal, state, and local officials will have to forge better partnerships with higher education to make significant strides on increased access.

“If we are not on the same page,” he said, “then it is going to be hard to make progress.”

A version of this article appeared in the February 28, 2001 edition of Education Week as Paige Unveils Proposal To Enhance, Increase Pell Grants

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