Evaluating Reforms to the Pell Grants

For an extended period, the “Federal grant program” that offers college students from

low-income backgrounds financial aid has been enjoying bipartisan leverage. However, there are

multiple policymakers as well as advocates who have argued that the program needs some

changes. There are different approaches that the proposals from interest groups like the Congress

and presidential candidates take about rethinking Pell, which consequently has resulted to

varying distributions of the advantages and benefits, depending on the “Urban Institute’s Pell

Model.” Interest groups have presented two approaches to changing the Pell Program, which is

currently on the table, and scrutiny and debate. The first approach being proposed by these

interest groups include simplification of the formula. That is according to proposals from

Senators Lamar Alexander together with Doug Jones. The second approach proposed is the

increase in the maximum grant, which currently has been capped at exactly $6 195, concerning

the same is in adjusting the inflation terms, like it w the case some four decades ago.

Similarly, in a plan that was released last year, the House Democrats suggested that there

should be an increase in the total maximum amount of the Pell Grant to $6 820, and most of the

Democratic presidential candidates like Mayor Pete Buttigieg, Senator Elizabeth Warren, the

former secretary Julian Castro, Senator Amy Klobuchar, and the former vice president Joe Biden

(Currently president-elect), all suggested that the Pell Awards should be increased, where they

pitched the maximum grants to range from $7, 195 to approximately $12, 000 (Chingos).. So,

what effects would these proposals have on the Pell Grant?

Simplification of the Pell Formula

According to Senator Jones and Alexander’s “FAFSA simplification Act of 2019, the

proposal would establish a new formula for the Pell Grant according to the college student’s
family income calculated as a percentage of the “Federal Poverty Level (FPL).” The bill

proposed by these two senators would offer a maximum grant to the college students whose

family incomes amount to a particular percentage of the FPL. Additionally, it would also phase

out the grant level for the college students who are needy children from single-parent families

and the students who are also single parents.

The effect of this proposal, according to the Urban Institute Pell Model, is that the

proposal would slightly escalate the shares of undergraduates who would get the Pell Grants. The

estimated increase would be from 41.8 to 42.5 percent. Similarly, the Independent students who

are not considered as being single parents perceive the most substantial alterations in their

chances of being awarded the Pell Grant (Kreighbaum). Also, the independent students who do

not have children perceive themselves as being four percentages more likely to be awarded the

Pell Grant under the simplification proposal. In contrast, students who are married with children

view themselves eight percentage points less likely to be awarded the Pell Grant. Furthermore,

dependent and independent that have no children would also be awarded substantial average

grants. There will be a decrease in the average grants awarded for married college students who

have children and them nearly the same for single guardians.

Increasing the Maximum Grant

As proposed by the House Democrats, together with the presidential candidates to

increase the maximum Pell Grant, it will do more than just providing college students with more

money on top of the Pell Grant awards they already receive (Chingos). The Pell award

calculation is currently done as the difference between the maximum grants and whatever the

federal government approximates a student together with their family can raise. Therefore, as the

Pell grants escalate, the students who qualify for the grants also go up.
 According to the Urban Institute Pell Model, being generous with the Pell grants can

result in substantial increases in the overall number of college students coming from the middle,

and upper-income families to be awarded these grants. For instance, when the grant is doubled, t

would consequently escalate the shares of the college students who are eligible from families

with an income of $75 000- $92,000 from thirteen percent to forty percent. Similarly, when the

Pell grant awards are increased, the average Pell grant size would increase. For instance, when

the maximum award is doubled, it would approximately double the total Pell grant awards for

most of the country's income groups (Chingos). However, college students coming from white

families stand high chances than Black or Hispanic students in becoming more eligible for the

Pell grants awards the maximum increases proposal. Notably, the impacts of escalating the size

of Pell grant awards for college students are substantial than the effects of expanding the Pell

eligibility up the overall income distribution. Additionally, if the average Pell grants are

increased together with the share being awarded, Pell grants can cause significant costs to the

taxpaying citizens when it is exaggerated above nearly seven million college students. That

implies that the proposals of increasing the maximum grants by more than $200 will undoubtedly

raise the cost significantly.

Work Cited

Chingos, Matthew. "Evaluating Proposed Changes to Pell Grants." Urban Wire Institute (2019).

Retrieved from: https://www.urban.org/urban-wire/evaluating-proposed-changes-pell-

 grants

Kreighbaum, Andrew. "Making the Case for Pell." Inside Highe ED. (2018). Retrieved from:

https://www.insidehighered.com/news/2018/05/18/advocates-push-stronger-pell-grant-

appropriations-cycle-begins