Pell Grants are federal financial aid for low-income students. Here’s what you should know about the program:
- Pell Grants are targeted: In the 2010-11 academic year, approximately 74% of the nearly 9 million Pell Grant recipients had family incomes of $30,000 or less. Only 1.9% of recipients came from families with incomes exceeding $60,000 who typically have multiple children in college.
- The program can’t keep up with the cost of college: Since 2008, annual spending on the Pell Grant program has more than doubled, to nearly $40 billion, and with the Obama administration and Congress, the maximum grant has jumped from $4,731 to $5,550 (and is scheduled to rise again to $5,635 in fiscal year 2013). Despite these increases, the maximum Pell Grant is expected to cover less than one-third of the average cost of attendance at public four-year colleges next year.
- Increasingly, colleges are not doing their part: The country’s public and private non-profit four-year colleges are now spending a greater share of their institutional aid dollars on trying to attract the students they desire than on meeting the financial need of the low-and moderate-income students they enroll. While many schools use institutional aid to attract the best students in order to raise their U.S. News & World Report rankings, others are using these funds to attract wealthy students to maximize their revenue.
- Pell Grant recipients take on more debt than other students: Education Department data shows that Pell Grant recipients are “more than twice as likely as other students to have student loans (63% vs. 30%),” Amont those Pell Grant recipients who graduate from four-year colleges, nearly 9 out of 10 have student loans, with an average debt of $3,500 more than their higher income peers.