A Poor Way to Tie the Pell Grant to Performance

“Groan” is a word that is typically used to describe something that is unpleasant or bad. But in the language of student financial aid, “groan” has a second meaning—a grant that converts to a loan if students fail to meet certain criteria. The federal TEACH Grant to prospective teachers and New York’s Excelsior Scholarship program both have these clawback requirements, and a 2015 GAO report estimated that one-third of TEACH Grants had already converted into loans for students who did not teach in high-need subjects in low-income schools for four years.

Republican Reps. Francis Rooney (FL) and Ralph Norman (SC) propose turning the Pell Grant into a groan program through their Pell for Performance Act, which would turn Pell Grants into unsubsidized loans if students fail to graduate within six years. While I understand the representatives’ concerns about students not graduating (and thus reducing—but not eliminating—the return on investment to taxpayers), I see this bill as a negative for students and taxpayers alike.

Setting aside the merits of the idea for a minute, I’m deeply skeptical that the Department of Education and student loan servicers can accurately manage such a program. With a fair amount of difficulty managing TEACH Grants and income-driven repayment plans, I would expect a sizable number of students to incorrectly have Pell Grants convert to loans (and vice versa). I appreciate these two representatives’ faith in Federal Student Aid and servicers to get everything right, but that is a difficult ask.

Moving on to the merits of the idea, I am concerned about the implications of converting Pell Grants to a loan for students who left college because they got a job. Think about this for a minute—a community college student who has completed nearly all of her coursework gets a job offer with family-sustaining wages. She now faces a tough choice: forgo a good, solid job until she completes (and hope she can get another one) or take the job and owe an additional $10,000 to the federal government? If one of the purposes of higher education is to help students move up the economic ladder, this is a bad idea.

This could also have additional negative ramifications for students who stop out of college due to family issues, the need to support a family, or simply realizing that they weren’t college ready at the time. Asking a 30-year-old adult to repay additional student loans (when he may have left in good standing) under this groan program would probably reduce the number of working adults who go back and finish their education.

If the representatives’ concern is that students make very slow progress through college and waste taxpayer funds, a better option would be to gradually ramp up the current performance requirements for satisfactory academic progress. These requirements, which are typically defined as a 2.0 GPA and completing two-thirds of attempted credits, already trip up a significant share of students. But on the other hand, research by Doug Webber of Temple University and his colleagues finds significant economic benefits to students who barely keep a 2.0 GPA and are thus able to stay in college.

Finally, although I think this proposal is shortsighted, I have to chuckle at a take going around on social media noting that one of the representatives owns a construction company that helped build residence halls. Wouldn’t that induce a member of Congress to support policies that get more students into college (and create demand for his company’s services)? It seems like he is going against his best interest if this legislation scares students away from attending college.

Author: Robert

I am an assistant professor of higher education at Seton Hall University. All opinions are my own.

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