Increased Pell Grant Level Could Hurt More than Help Students

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AcademicMAPS President Dr. Neal Raisman analyzed the new Pell Grant increases and found that they could be more harmful to students than helpful. Pell money is supposed to be a great academic customer service tool ti make college more affordable. But in an ironic twist, colleges and universities just use increases as a "guiltless" excuse to raise tuition and fees making Pell increases counter-productive leading to more student attrition due to added costs.

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Pres. Obama signed the new direct lending to colleges bill. This could lead to an increase in the amount of Pell Grant money for students. The maximum grant right now is $5,350. Pres. Obama expects the maximum grant to rise to $5,975 by 2017. So that’s good? Right? Not necessarily. Pell increase can really be a dis-service to students, retention and graduation.

[AcademicMAPS] president Dr. Neal Raisman says “The Pell increase may actually harm students. It is only good if colleges and universities do not take the increase in Pell as a basis for raising tuition and fees as they almost always do. And they always go well beyond the annual Pell increase. This hurts students badly and is very poor academic customer service.”

“Schools figure that if there is additional Pell funding available to students, they might as well just increase the costs of attending at least that amount since the whole thing will balance out. It won’t cost the students any more money if tuition goes up since Pell will cover it. This is wrong thinking.”

AcademicMAPS analysis indicates that $5,975 is a maximum Pell allowance. Just because Congress and the President authorize an increase of $200 a year in Pell does not mean that the full increase automatically goes to every Pell recipient.

The actual amount of Pell a person receives depends on the student’s Expected Family Contribution (EFC), the total Cost of Attendance (COA), and status (full-time, half-time, etc.). The EFC depends on a number of factors and not what the family actually has available to contribute but what the federal formula decides the family should be able to put into the cost of attending college based on the Free Application for Federal Student Aid (FAFSA). After filing a FAFSA, the student receives a Student Aid Report (SAR), or the institution receives an Institutional Student Information Record (ISIR), which notifies the student if he or she is eligible for a Federal Pell Grant and provides the student's EFC. The total Cost of Attendance (COA) is not just tuition but all costs determined appropriate and required to attend.

Full Pell of $5,350 is for full-time attendance, usually 12 credit hours or more. Three-quarter time which oddly enough can cost almost as much as full-time is some schools since part-time credits can cost more is as much as $4,013. The additional cost of less than full time credits is designed to push students into full-time status which benefits the school most often in funding formulas and Pell received. Half-time is up to $2,675 and less than half-time is only $1,338. Fixed costs are supposed to be approximate to the time in classes but that is not always so. For example, one trip to campus for three classes is the same as the same trip for one.

Therefore in the case of many students, an increase in Pell has little or no additional benefit depending on how the total formula falls out. The benefit is only assured to the poorest students who always need the increase just to pay the current tuition rate. The current tuition rate; not an increased one. Increasing college costs in no way helps these students who struggle just to make today’s costs. In fact, increasing tuition and fees because it is matched by Pell just puts these students further behind in the ability to pay for college because all their other costs of attending also go up.

The intention of Pell was to help students who may not have the funds to attend college (most of them) gain some assistance in paying for education. Pell was never designed as a means to help colleges raise tuition and fees. Pell was not to be a fiscal support for colleges but that is what it seems to have become. An excuse to allow colleges, universities, community colleges and career colleges to increase their budgets and bottom lines.

Using Pell as a “guilt free rational” to increase the very costs they were designed to decrease to students is wrong and defeats the purpose of Pell Grants while adding to the cost burden of students. We need to stop it and help the students Pell was intended to aid and we claim to care about. A primary service to students we can provide is assisting them afford our services. If we take away the benefits of Pell by increasing costs, that is a dis-service to students. The increase will lead to more students dropping ouit due to inability to pay.

AcademicMAPS has been the number one provider of academic customer service that increases student retention and institutional revenue, morale and success since 1999. Dr. Neal Raisman’s fourth book The Power of Retention: More Customer Service in Higher Education is the best-selling book on customer service in colleges, universities and businesses that service them in the US, Canada and Europe.. His blog Great Service Matters is read by over 16,000.

For more information on academic customer service, student retention and the services AcademicMAPS provides contact 413-219-6939].

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