Tag: Pell

  • Pell Grant Dollars Are Left Unclaimed: What That Means for Students and States

    Pell Grant Dollars Are Left Unclaimed: What That Means for Students and States

    Title: Pell Dollars Left on the Table

    Authors: Louisa Woodhouse and Bill DeBaun

    Source: National College Attainment Network

    Pell Grants have long supported low-income students as they pursue higher education, increasing the financial capabilities and academic opportunities afforded to students. However, receiving federal financial aid through Pell Grants is dependent on filing the Free Application for Federal Student Aid (FAFSA), which can serve as a barrier to students.

    The National College Attainment Network (NCAN) has published a report on the unclaimed Pell Grants left on the table by high school graduates. Approximately 830,000 Pell Grant-eligible students did not complete FAFSA in the 2024 cycle, resulting in nearly $4.4 billion in unclaimed Pell Grant awards. These unclaimed funds are valuable to both students and states, with the ability to further the educational pursuits of low-income students and strengthen state economies.

    NCAN has run reports detailing the value of unclaimed Pell Grants over the past four years. Typically, nearly 60 percent of high school graduates complete the FAFSA by June 30, with completion rates trailing off markedly as students begin their summer.

    However, due to the technical challenges and delayed launch of FAFSA that occurred in the 2024 cycle, by the end of June, only 50 percent of high school graduates had completed the form. By August 30, 57 percent of students had filed the FAFSA, decreasing the amount of financial aid left on the table. The implications are clear: hindrance to the financial aid application process, whether that be through technical difficulties, decreased assistance, or short staffing, can result in many students losing access to Pell Grant funds.

    The impact of lower FAFSA completion rates, and therefore more unclaimed Pell Grants, is not felt exclusively by students but by states as well. In 2024, students in California and Texas each left nearly $550 million in Pell Grant awards unclaimed. While these states lose the most when FAFSA completion rates are low, they also stand to gain the most if completion rates increase.

    Analysis from NCAN finds that if FAFSA completion rates had increased by an additional 10 percentage points this year, California would have seen a $145 million increase in Pell Grant awards while Texas would have received an additional $130 million. The additional federal aid could translate into more students attending postsecondary institutions, filling workforce gaps and strengthening the states’ economies.

    In establishing the significance of increasing FAFSA filing rates for low-income students, NCAN offers commentary on how states can better support students, especially in the wake of potential policy changes directed at higher education. States can fund FAFSA completion efforts, providing additional in-school and online resources for students to access when filing. Additionally, FAFSA data sharing among states may enable high school counselors and local college access partners to better target students that could benefit from additional assistance.

    To read more about unclaimed Pell Grants and the role states can play on bolstering FAFSA completion rates, click here.

    —Julia Napier

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  • 13-Percentage-Point Gap in Pell vs. Non-Pell Completion

    13-Percentage-Point Gap in Pell vs. Non-Pell Completion

    A survey of community colleges finds, across five states, Pell Grant recipients have lower success rates compared to their peers.

    Eduard Figueres/iStock/Getty Images

    Low-income students can experience a variety of barriers to success in college, and new data from the Richmond Federal Reserve points to gaps in success and completion among Pell Grant recipients at community colleges, compared to their peers.

    An analysis of a 2024 survey of two-year public institutions in Maryland, North Carolina, South Carolina, Virginia and West Virginia identified a 13-percentage-point gap in success rates between Pell Grant recipients and those who do not receive the Pell Grant. Forty percent of Pell Grant students achieved at least one metric of success, versus 53 percent of non-Pell recipients.

    Methodology 

    The 2024 Survey of Community College Outcomes includes data from five states—Maryland, North Carolina, South Carolina, Virginia and West Virginia—and 121 colleges. Data includes all degree- or certificate-seeking students enrolled during the 2019–20 academic year, including dual-enrollment students.

    Around 34 percent of students included in the study received a Pell Grant while enrolled at a community college, (compared to the national average of 32 percent). Dual-enrollment students are not eligible for the Pell Grant.

    The background: Pell Grant recipients, who are low-income students enrolled in a college or university in the U.S., are more often to be enrolled at public institutions, and the greatest share are from families who earn less than $20,000 annually.

    Success, as defined by the Richmond Fed, means a degree- or certificate-seeking student at a community college completed one of the following over a four-year period following enrollment:

    • Earned an associate degree
    • Earned a diploma or credit-bearing certificate
    • Earned an industry- or employer- recognized licensure or credential
    • Transferred to a four-year institution prior to degree or award attainment
    • Persisted by completing at least 30 credit hours

    Over all, Pell and non-Pell students completed an associate degree at similar rates (19 percent), but Pell students were less likely to transfer (10 percent of Pell versus 20 percent of non-Pell) or complete a credential (6 percent versus 7 percent).

    Digging into the data: Researchers qualify that while there is a correlation between receiving a Pell Grant and graduation, that does not imply causation, or that receiving Pell Grant funding leads to lower outcomes.

    “Students who qualify for and receive Pell Grant funding may have substantively different characteristics than non-Pell students—differences that could be driving the differences in outcomes,” wrote Laura Dawson Ullrich, director of the Community College Initiative at the Richmond Fed, in a blog post.

    North Carolina was the only state with higher associate degree completion rates among Pell students, but this could be due to how the state classifies dual-enrollment students as degree-seeking and their ineligibility for the Pell Grant.

    South Carolina had the highest transfer rate among Pell (19.3 percent) and non-Pell recipients (27 percent), which could be a result of Clemson University and the University of South Carolina’s bridge programs with community colleges, Ullrich wrote.

    Low-income students are more likely to experience basic needs insecurity, which can hinder persistence and completion. The Richmond Fed plans to conduct more surveys focusing on wraparound student supports and how the existence of these resources may contribute to Pell Grant recipients’ success.

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  • More Pell Grant Recipients Enrolling at Top-Tier Universities

    More Pell Grant Recipients Enrolling at Top-Tier Universities

    Title: Achieving Greater Socioeconomic Diversity at Highly Endowed Colleges and Universities

    Author: Phillip Levine

    Source: Brookings Institution

    Since the 2014-15 academic year, the share of students receiving a Pell Grant at institutions with large endowments (over $250,000 and $500,000 per full-time equivalent student, respectively) has increased. Pell Grant recipience is often used as a proxy for low-income status, pointing to an increase in the socioeconomic diversity of highly endowed institutions in the past decade. To pinpoint the source of this increase, the author of a new Brookings Institution brief examines several variables: eligibility, admissions standards, and student application behavior.

    Importantly, the eligibility requirements to receive a Pell Grant have changed over the years. The maximum award amount increased during the Great Recession while incomes fell, raising the number of people who qualified. From the 2008-09 to 2010-11 academic years, the share of students receiving a Pell Grant at institutions with large and very large endowments jumped from 12 percent to 17 percent.

    According to the author, changes in eligibility can likely explain part of the increase in Pell Grant recipience during the Great Recession. Since then, however, the maximum award amount in real dollars has decreased, despite the share of students receiving Pell Grants at highly endowed institutions continuing to rise.

    Adjusting for inflation to 2023 dollars, in the 2013-14 academic year, the maximum award was $7,410. Ten years later, in the 2023-24 academic year, the maximum award was $7,395. Over this period, the economy recovered and the share of students receiving Pell Grants across higher education writ large decreased. Because the figures at these institutions diverge from national figures, eligibility changes—and therefore the number of people qualifying—are likely not the cause of the increase in Pell Grant recipients at highly endowed institutions over the past decade.

    Examining average SAT scores from institutions with large and very large endowments indicates that changing admissions standards for Pell Grant students is not the source of the rise in socioeconomic diversity.

    When comparing scores from 2007-08 and 2011-12 with those from 2015-16 and 2019-20, the gap between the average scores of students with and without a Pell Grant at institutions with very large endowments decreased from 72 points in 2008/2012 to 58 points in 2016/2020. At institutions with large endowments, the gap in scores between Pell Grant recipients and those not receiving a grant narrowed even more, from 98 points in 2008/2012 to 51 points in 2016/2020, representing a statistically significant change. The shrinking gaps suggest that admissions standards for Pell Grant recipients have not been lowered.

    Because eligibility and admissions standards cannot explain the increase in the share of students at highly endowed institutions, it is likely that a higher number of Pell Grant recipients are applying to highly endowed schools and then choosing to enroll. Emerging research from the beginning of the decade on undermatching among low-income students coincides with an expansion of institutional initiatives to overcome these barriers, which may be contributing to higher application rates. Organizations like uAspire and Posse, which aim to recruit low-income, marginalized students, have also advanced this effort.

    While there are many barriers for low-income students to attend higher education, the evidence suggests there has been progress in improving access for these students at highly endowed institutions. Institutional commitment to promoting social mobility while adhering to their academic missions will not only benefit the institutions themselves but society at large as well.

    To read the full report, click here.

    —Erica Swirsky

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