November 2011
Attaining the American Dream: Racial Differences in the Effects of Pell Grants on Students’ Persistence and Educational Outcomes Commissioned by the Kirwan Institute for the Study of Race and Ethnicity The Ohio State University Democratic Merit Project With Support from Public Interest Projects – Fulfilling the Dream Fund
Lamont A. Flowers Clemson University
Lamont A. Flowers is the Distinguished Professor of Educational Leadership in the Department of Leadership, Counselor Education, Human and Organizational Development and the Executive Director of the Charles H. Houston Center for the Study of the Black Experience in Education in the Eugene T. Moore School of Education at Clemson University. © Lamont A. Flowers Do not reprint without permission.
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Attainin ng the Americcan Dream: Raacial Differencces in the Effeccts of Pell Graants on Stud dents’ Persiste ence and Educaational Outcomes Lamont A. Flowers, Ph.D. INT TRODUCTION Ex xpanding acce ess to higher e education is one of our nation’s top priorrities. Accordin ngly, legislatorrs and policymakkers are attem mpting to balan nce budgets w while continuiing to supportt parents in th heir efforts to o send their child dren to college. Howeverr, due to imp pending federal pronounccements and fiscal negotiaations pertaining g to student financial aid, paarents, studen nts, and camp pus administraators must devvelop creative e ways to ensure barriers to a a college education are miitigated, espe ecially among low‐income and a racially diverse population ns. Moreoverr, due to historical and contemporaary social an nd economic conditions, many underreprresented and low‐income students s face e challenges in terms of fiinancing theirr college educcation (Steinberg g, Piraino, & Haaveman, 2009 9; Yeager, Nelsson, Potter, W Weidman, & Zulllo, 2001). In n light of today’s economic climate, mu uch of the co ountry’s atten ntion is focuse ed on the staate of financial markets m and the t creation of o jobs. As reccent protests against Wall Street suggesst, these issue es are extremelyy contentious and may requ uire comprehe ensive strateg gies to addresss the underlyying conditions that lead to wealth w dispariities. While economic e issu ues affect all Americans, African A Americans and Hisspanic Americanss are severely impacted by the concomittant effects of low wages and a high unem mployment. Recent R data from m the U.S. Cen nsus Bureau (D DeNavas‐
F Figure 1. Mediian Income by Race
Walt, Pro octor, & Smiith, 2011) show that African Americans A and d Hispanic Am mericans earned
substantially
less
than
$54 4,620 $60,000
White
Americanss in 2010. As illustrated in Figure 1,
$40,000
the median income for A African Americcans was
$20,000
approximaately $22,000 l less than that of White
$0
Americanss. These incom me distribution ns clearly
$32 2,068 African Americaan
$37,759
Hispanic Americcan White American n
Source: U.S. Ceensus Bureau
show thatt income inequalities are prrominent in Americaan society. Th hey also sugge est that policies which see ek to address these disparitties are profo oundly needed. Racial income inequality i in America A is quiite extensive. Comparing th he ratio of African Americaan and Hispanic American A med dian incomes to t that of Wh hite Americanss reveals thatt African Americans and Hisspanic Americanss earn 59% and d 69%, respecttively, of the m median income of White Am mericans. Whille these ratioss raise an importaant issue abou ut race and income, they on nly tell half off the story. Daata from Figurre 2, which pro ovides
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ormation abou ut this issue, highlights th he relationship p between in ncome and po overty. These e data more info indicate th hat a substantial number of o African Ame ericans and Hispanic H Ameriicans are belo ow the povertty line when com mpared to Whiite Americans. Given that fe ederal studentt financial aid programs are e primarily dessigned to supporrt low‐income e Americans, the t relative percentages p o African Am of mericans and Hispanic H Ame ericans below the poverty line s should be factored into the Pell Grant app propriations po olicy debate. To o expand th he discussion on racial
Figurre 2. Percentag ge Below Poverrty by Race
difference es in income, r recent data fro om the U.S. Bureau of o Labor Statistics (2011) highlights unemployment rates by race. As shown in Figure 3, the unemplo oyment rate for f African Americanss and Hisp panic Americans was substantiaally greater than that of White
2 27%
30% 25% 20% 15% 10% 5% 0%
27%
African Americcan
10 0% Hispanic Ameriican White Americaan
Americanss in October, 2 2011. These data attest to Source: U.S. Census Bureau the
pe ersistent
economic e
inequalities
experience ed by African n Americans and Hispanic Americans relative to Wh hite American ns. To remedy this problem, c conventional w wisdom and re esearch (Beckker, 1993) sugg gests that the way to a bette er financial futture is to pursue higher educattion. Data from the U.S. Census Bureau B (Julian n
Figure 3. Unem mployment Ratee by Race
& Kominski, 2011), as shown in Figure 4 suggestss that this cconventional w wisdom may n not be entirelyy
20%
warranted d. More sp pecifically, daata showing g
15%
estimates of work‐liffe earnings for African n
10%
Americanss, Hispanic Americans, and White e
5%
Hispanic Ameriican
0%
White Americann
Americanss reveal a staark and unflaattering trend d present in n the American n workforce w with regard to o
15% 11% 8%
African Americcan
Source: U.S. Bureau of Labor Statistics
racial diffferences in income byy educational attainmen nt. The data sh how that Africaan Americans and Hispanic Americans are e expected to earn less over their lifetime th han similarly educated e White Americans. Even at the highest level of education n (Master’s De egree, Profession nal Degree, an nd Doctorate Degree), income disparitiess exist by race e. Despite thiss information, more and more African Ameriicans and Hisp panic American ns are seeking g a higher educcation.
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African Amerrican
Figu ure 4. Median Work-Life W Earn nings by Race
Hispanic Ameerican
White Americcan
$4,5000,000 $4,0000,000 $3,5000,000 $3,0000,000 $2,5000,000 $2,0000,000 $1,5000,000 $1,0000,000 $5000,000 $0 S High School Grad duate
Assocciate's Deg gree
Bacheelor's Deg gree
Masster's Deggree
Professsional Deg gree
Docttorate Deg gree
Source: U.S. Census Bureau
College En nrollment amo ong African Am mericans and Hispanic Ame ericans Despite data and research indicating that African American and Hispanicc American students may be less likely to atte end college when com mpared to theiir peers from o other racial groups (P Perna, Rowan‐Kenyon, & Bell, B 2008), current daata show thatt African Ame ericans and Hispanic A Americans con ntinue to embrace higher education because of its potential to t increase their inco ome and expaand their horrizons. The belief thatt the pursuit of o education can c lead to
Figurre 5. African Am merican Collegee Students
16% 14% 12% 10% 8% 6% 4% 2% 0%
15% 13% 12% 11%
Associate's Deg gree Bachelor's Deg gree
2000
20008
Source: Nattional Postsecondaary Student Aid Stu udy
personal a and financial aadvancement is rooted in human caapital theory which is bassed on the empiricallyy‐supported proposition p th hat educational attainmentt influences laabor market outcomes (Becker, 1993). Beccause human c capital include es knowledge and abilities t that an individ dual can obtain n and cultivate, this theory haas been used to explain college c attend dance pursuitts among Am mericans for many m years., Many Americanss are pursuing g a college education to seccure a better future. Moreover, it appeaars that the cu urrent economic conditions have h motivate ed many low‐‐income Americans to enrroll in college e with the go oal of obtaining a degree. To support this contention, as shown in Fiigures 5 and 6, 6 the percenttage distribution of African Am mericans and H Hispanic Amerricans attendin ng college has increased.
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Regarding
co ollege
enrolllment,
the
Figu ure 6. Hispanic A American Colleege Students
economic climate has not deterrred African 16% %
Americanss and Hispanicc Americans frrom pursuing
16% 14% 12% 10% 8% 6% 4% 2% 0%
a college e education. Datta from the 20 000 and 2008 National Postsecondary P y Student Aid Study show that the percentage of o African Am merican and Hispanic American A stud dents pursuing g Associate’s degrees in ncreased by 2% % and 3%, resp pectively. The
13% 10%
12%
Associate's Deegree Bachelor's Deg gree
2000
20 008
data also showed that the percentag ge of African Source: Naational Postsecond dary Student Aid Study S
American and Hispaanic Americaan students pursuing Bachelor's B deg grees increase ed by 1% and 2%, respecctively. The inccrease in the n number of Associate’s degre ees is particulaarly interesting g and suggestts that African Am mericans and d Hispanic Am mericans are working to pursue educaational creden ntials that lead to employme ent opportunitties as well as future educattional attainme ent. Th hese data cleaarly show thatt African Americans and Hisspanic Americaans are pursuing college de egrees and that tthe percentage of students from these populations will likely increase in upcomin ng years. Given that African Am merican and Hispanic Ame erican college e students arre more likelyy to have low wer incomes when compared d to White Am mericans, federral student fin nancial aid policies are need ded to supporrt these students to ensure eq qual access to higher educaation. The Pelll Grant progrram is one such federal program design ned to provide fin nancial supporrt to families a and college stu udents based o on financial ne eed.
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THE PELL GRANT PROGRAM Pell Grants have been designed to assist low‐income students in pursuing a college education (Rubin, 2011). As such, the factors used to determine the specific amount of the Pell Grant award are based primarily on a family’s ability to contribute financial resources to cover the costs of obtaining a college education (Mahan, 2011; U.S. Department of Education, 2010). The primary purpose of the Pell Grant program is to provide financial resources to students and families to assist them in paying the costs of attending college. While there have been modifications to the program over the years (Curs, Singell, & Waddell, 2007; Rubin, 2011), the aim of the Pell Grant program is to increase the number of students who attend college by lowering the amount that students and families have to pay for tuition, housing, and the other costs of attaining a college education (Perna, Rowan‐Kenyon, & Bell, 2008). Given the purpose of the Pell Grant, its particular mission and impact on low‐income college students, continued funding of this program is paramount. As such, since the enactment of the Higher Education Act of 1965 and its accompanying Title IV provisions, which later included the funding of the Pell Grant program (Curs, Singell, & Waddell, 2007; Mahan, 2011), many low‐income students have been enabled to pursue a postsecondary education as well as an opportunity to pursue the American Dream. Figure 7. Pell Grant Eligible Applicants
12,000,000 10,000,000 8,000,000 6,000,000 4,000,000 2,000,000 0
1975-1976 1980-1981 1985-1986 1990-1991 1995-1996 2000-2001 2005-2006 2009-2010 Source: U.S. Department of Education
Figure 7 shows that since 1975, the number of applicants eligible for federal Pell Grants has increased by more than 600%. These data also show that many Americans are benefitting from the Pell Grant program. It also demonstates the staggering growth of this program and why some legislative action may be needed to ensure that proper funding mechanisms are in place to manage the program in the future. Figure 8 clearly illustrates that for many years, the cost of the Pell Grant program has outpaced its appropriations, resulting in major funding shortfalls. Furthermore, data from Figure 9 shows the increase of the maximum Pell Grant award between 1973 and 2011. As a result of the Pell Grant program's budget issues and the concommitant impact of the political climate, policymakers have focused their attention on Pell Grant reform. Lamont A. Flowers for the Democratic Merit Project
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Figu ure 8. Pell Grant Expenditures and d the Federal Pelll Grant Approprriation
35,000,0000,000
30,000,0000,000
25,000,0000,000
20,000,0000,000
Pell Grant Expenditures
15,000,0000,000
Pell Grant Appropriatiions
10,000,0000,000
5,000,0000,000
0 761980-19811985 5-19861990-199111995-19962000-20 0012005-2006200 09-2010 1975-197
Source: U.S. Departtment of Education
Given the afo orementioned income and employmentt data for African A Americans and Hisspanic Americanss, it can be arg gued that pollicymakers sho ould not only work to main ntain the existting benefits of o the Pell Grantt program but also to devvelop strategies to fund th he Pell Grant program at even higher levels. l However, current propo osals are being g discussed to o eliminate and curtail the funding of Pelll Grants despite the likelihood that reduced d funding for the Pell Gran nt program wo ould potentiaally be detrime ental to manyy low‐ income Affrican Americans and Hispan nic Americans seeking a colle ege education n. Purpose o of the Study Th he purpose of this descriptive statistical analysis is to explore the relative imp pact of the Pell
Figure 9. Maxiimum Pell Gran nt Award
Grant program among African Amerrican, Hispanicc
$6,0 000
American, and White American A college students.
$4,0 000
The impetus for this study is based on n national dataa
$2,0 000
and research findings from the scholarly literature e
$0
describing g racial diffferences in income and d
$5,500
$45 52
1 1973 2 2011
Source: U.S. Department of Ed ducation
employme ent. Additionaal justification for this studyy is based on o the view th hat the most effective app proach to imprrove the Ame erican econom my requires a grass‐ roots leve el developmen ntal growth strategy in whicch several secctors of the laabor force are e enhanced through skills acqu uisition, educational attainm ment, and job creation (The White House, 2009). As a result, studyin ng the impact of Pell Grants may m shed lightt on the impo ortance of thiis federal prog gram in enhancing labor market m outcomes for African Am merican and H Hispanic Amerrican college sttudents. Anotther goal of th his descriptive study is to yield information fo or policymake ers, university administratorrs, student affaairs profession nals, and pare ents to
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increase the likelihood that African American and Hispanic American students have the necessary opportunities to complete a college degree and achieve success in the American workforce. In addition to the study’s connection to the economy, the national importance of this study is also magnified by President Obama’s American Graduation Initiative which seeks to increase enrollment of college students in the current decade as well as provide aid to community colleges that may be used to enhance institutional resources, retain students, graduate students, and prepare its graduates to enter the workforce (The White House, 2009). According to President Obama, “Through this plan, we seek to help an additional five million Americans earn degrees and certificates in the next decade” (The White House, 2009, ¶ 3). Because a considerable number of African American and Hispanic American college students attend community colleges (Horn & Nevill, 2006; Provasnik & Planty, 2008), this descriptive study is relevant and timely. According to the National Center for Education Statistics, African American and Hispanic American students are expected to comprise approximately 30% of the total college student enrollment by 2018 (Hussar & Bailey, 2009). This projection further supports the need to study the impact of federal student financial aid policies on African American and Hispanic American students’ completion rates. Furthermore, this study seeks to inform federal policy regarding Pell Grant appropriations in light of the expected growth in college enrollment and the potential to ignite our ailing economy (The White House, 2009). Moreover, by studying higher education’s most financially‐needy beneficiaries, perhaps it may be possible to learn better ways to allocate scarce resources to ensure that all students are prepared to enter the job market and contribute to America’s global competitiveness. Toward that end, another aim of this study is to use national data from a recent longitudinal survey to determine the extent to which Pell Grants impact persistence and other educational outcomes for African American, Hispanic American, and White American college students.
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REVIEW OF THE LITERATURE As Posselt's (2009) analysis of presidential discourse reminds us, the Pell Grant program is an outgrowth of President Lyndon B. Johnson's initiatives. As such, major aspects of the Higher Education Act of 1965 were crafted to enhance educational opportunities for American citizens who may have been previously unable to pursue a higher education because of family income and the costs of college attendance. Therefore, from its genesis in the early 1970's with the funding and implementation of the Basic Educational Opportunity Grant program (Curs, Singell, & Waddell, 2007; Mahan, 2011; Rubin, 2011), Pell Grants have served a significant number of Americans and enabled students from low‐income and diverse racial backgrounds to pursue a college education. The Fiscal Year 2012 Budget Summary demonstrates a continual commitment to support parents in their efforts to send their children to college (U.S. Department of Education, 2011a). Moreover, approximately 41 Billion dollars are being requested to support the Pell Grant program. Additionally, Pell Grant reform ideas have focused on enhancing the operational efficiency of the program. One of the major proposed enhancements to the Pell Grant program would prohibit students from receiving more than one Pell Grant in an academic year. While these and other cost‐saving enhancements may not be desirable among all policymakers and stakeholders, given the rising costs of the Pell Grant program, changes to the program may be needed in some form. Using institutions as the unit of analysis, Steinberg, Piraino, and Haveman (2009) examined the relative importance of state and institutional factors on the percentage of Pell Grant recipients at postsecondary institutions. One interesting finding from their study was that the percentage of low‐income families in a particular state directly influenced the percentage of students who had Pell Grants at the public institutions in the state. This finding resonates with other research and shows that Pell Grants serve as a powerful resource for low‐income families whose children attend public institutions. With the potential growth of the population of low‐income families in upcoming years, the Pell Grant program may have to expand as opposed to detract in order for public institutions to meet the needs of low‐income Americans. To address the role of federal student financial aid policy, as it relates to the government’s role in funding the Pell grant program, statistical findings from the present study are intended to highlight the educational impact of Pell Grants for diverse student populations. While several studies have established a baseline of research evidence pertaining to the effects of Pell Grants on students in college (Rubin, 2011; Steinberg, Piraino, & Haveman, 2009; U.S. Department of Education, 2011b), additional research is needed to further understand the importance of Pell Grants in diversifying the nation’s postsecondary student population and improving underrepresented students’ educational outcomes. Thus, the purpose of this commissioned
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paper is to examine the extent to which Pell Grants enable and support the nation’s most vulnerable college students in their quest to complete a college education. Based on a multivariate analysis, Rubin (2011) found that Pell Grant eligibility did not impact college student enrollment outcomes. This finding suggests that any policies designed to lower the maximum or average Pell Grant award that students receive will most likely lead to a reduction in the number of low‐income students who enroll in college. Chen and DesJardins (2010), using national data of beginning college students, explored the extent to which financial aid impacts college dropout outcomes by race. Their longitudinal analyses indicated that college dropout behavior is influenced by the availability of need‐based grant funding for minority students. More specifically, controlling for students' precollege characteristics and academic experiences, it was shown that having a Pell Grant affected minority students’ likelihood of dropping out of college. In summary, it was also shown that the size of the Pell Grant awarded played a role in influencing minority students' drop‐out behavior. Martin and Paulsen (2005) found that the amount of grant aid first‐generation students received positively influenced their persistence and retention in college. This finding is because many first‐generation college students are African American and Hispanic American. Thus, this study provides additional evidence concerning the importance of need‐based student financial aid such as Pell Grants. Mahan (2011) noted that Pell Grants are designed to provide a baseline funding opportunity for families. Thus, with Pell Grants serving as an initial funding source, it is understood that families and students should seek other federal programs and other non‐federal programs to fund a college education in order to compliment their family's college funding portfolio. In this regard, Mahan noted that among Pell Grant recipients, approximately 13% of the students did not have any other type of federal financial aid. This statistic further reinforces the concept that the current amount of the maximum Pell Grant awarded to students still leaves students and families in need of financial assistance, hence providing another reason why perhaps the maximum Pell Grant awarded to students should be increased.
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METHODS Utilizing data from the 2004/2009 Beginning Postsecondary Longitudinal Study (Cominole, Wheeless, Dudley, Franklin, & Wine, 2008; Wine, Cominole, & Caves, 2009), descriptive statistical analyses were employed to compare the educational impact of Pell Grants on African American, Hispanic American, and White American students. The 2004/2009 Beginning Postsecondary Longitudinal Study (BPS:04/09) is a nationally representative, longitudinal study designed to measure the impact of a wide‐array of personal and demographic factors, institutional differences, and postsecondary experiences on educational and career outcomes (Radford, Berkner, Wheeless, & Shepherd, 2010). Consistent with the base‐year sample design, the first follow‐up data collection re‐surveyed base‐year students to obtain information pertaining to their academic experiences and educational outcomes (Cominole et al., 2008; Wine et al., 2009). Thus, “The second follow‐up, BPS:04/09, monitors students’ academic progress in the 6 years following their first entry into postsecondary education and assesses completion rates in 4‐year programs” (Wine et al., 2009, p. 3). For the present study, degree attainment refers to students who completed a certificate, Associate’s degree, or a Bachelor’s degree. To complement the quantitative data analysis, previous research studies on this topic were also analyzed to explore the philosophical and foundational concepts that may serve to advance financial aid policy reform. Previous research was also synthesized to generate financial aid policy recommendations with the intent to expand opportunities for racially and ethnically diverse students. Research Questions Previous research is quite consistent on the general impact of student financial aid and suggests that student aid in the form of grants serves to impact low‐income students’ decisions to attend college as well as their ability to progress toward a college degree. In light of the scant information about the role of need‐based aid in the form of Pell Grants for African American and Hispanic American students, this report sought to answer four important questions: 1. Are African American, Hispanic American, and White American students who receive Pell Grants more likely to graduate from college than their peers who do not receive Pell Grants? 2. Are African American, Hispanic American, and White American students who receive Pell Grants more likely to major in a science and engineering field than their peers who do not receive Pell Grants? 3. Are African American, Hispanic American, and White American students who receive Pell Grants more likely to earn better grades than their peers who do not receive Pell Grants? 4. Are African American, Hispanic American, and White American students who receive Pell Grants more likely to obtain a higher income than their peers who do not receive Pell Grants?
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RESULTS As shown in Figures 10 and 11, dependent and independent African American and Hispanic American students are more likely to be low‐income when compared to White American students. While a substantial amount of research literature exploring student outcomes has been encouraging and suggests that obtaining financial aid may positively influence important student outcomes (Pascarella & Terenzini, 2005), the descriptive research literature has not adequately explored the role of Pell Grants on students’ educational outcomes for African American, Hispanic American, and White American college students. In terms of the research that does exist related to this topic, in many instances the studies are based on multivariate analyses employing complex statistical designs that might be too complex for the average reader who is attempting to understand the role of financial aid on student outcomes. Thus, the analytical design in this report employs percentages as the primary mode of analysis. This method was deemed appropriate in light of the intended audiences for this report. In summary, the analyses in this section should enable the reader to have a clear and cogent grasp of the potential effects of Pell Grants for African American and Hispanic American students.
Figure 10. Percentage Distribution of Dependent College Students by Income and Race
40% 35% 30% 25% 20% 15%
African American Hispanic American
10%
White American
5% 0% Less than $20,000
$20,000$39,999
$40,000$59,999
$60,000$79,999
$80,000$99,999
$100,000 or more
Source: National Postsecondary Student Aid Study
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Figure 11. Percentage Distribution of Independent College Students by Income and Race
35% 30% 25% 20% 15% African American
10%
Hispanic American White American
5% 0% Less than $10,000
$10,000$19,999
$20,000$29,999
$30,000$49,999
$50,000 or more
Source: National Postsecondary Student Aid Study
African Americans The data reported in Figure 12 show the importance of obtaining a Pell Grant for African American students in terms of persistence and graduation outcomes. With regard to low‐income students (incomes less than $30,000), African American students who received Pell Grants were more likely (35%) to earn their degree when compared to low‐income African American students who did not receive a Pell Grant (23%) during college. For low middle income African American students (i.e., the student’s family income was between $31,000 and $57,000), Pell Grant recipients were more likely to graduate than low middle income students who did not obtain a Pell Grant. Similar results were obtained for African American students in the high middle income level (which was defined as incomes between $57,000 and $89,000). Even for the highest income level (incomes over $89,000), African American students who received Pell Grants (53%) were more likely to receive their degree than African American students who never received a Pell Grant (38%). In light of the need to increase the production of science and engineering undergraduates, many government agencies have focused on this goal. However, a continuous investment in science education is still needed to ensure that the United States is able to compete in the global market. Recent data indicate that African Americans are underrepresented among students earning degrees in science and engineering (National Science Foundation, 2011). Given the importance of developing a stronger scientific workforce, Figure 13 was developed to show the extent to which Pell Grant recipients majored in scientific and engineering fields. Based on the data, it suggests that African American Pell Grant recipients (33%) were more likely to major in science, technology, engineering, and mathematics (STEM) disciplines than their counterparts who did not receive Pell Grants (23%). Figure 14 sheds light on the academic experiences of African American students by Pell Grant Lamont A. Flowers for the Democratic Merit Project
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e data demon nstrate that Affrican Americaan students who received P Pell Grants werre slightly lesss likely status. The to earn mo ostly A’s and B B’s (47%) than African American students w who did not re eceive a Pell G Grant (48%). In n terms of th he labor markket, data from m Figure 15 showed s that African A Amerrican studentss who received aa Pell Grant we ere more likelyy to make less than $19,999 a year (31%) th han students w who did not re eceive a Pell Gran nt (22%). The data also sho owed that Afriican American n Pell Grant re ecipients (31%)) were less likkely to make betw ween $20,000 and $28,699 a a year when ccompared to students who d did not receive a Pell Grant (33%). In contrasst, African Am merican studen nts who did no ot receive a Pell P Grant werre equally likely to earn bettween $28,700 an nd $39,000 a y year. Furtherm more, African A American students who had d a Pell Grant ( 17%) were lesss likely to earn more than $40,000 a year wh hen compared d to African American stude ents who did not receive th he Pell Grant (24% %).
Figure 12. Percentage of o African Amerrican Students b Pell Grant Status and Persiistence by
60%
53%
50% 38%
40%
32%
40%
Low w- Income
35% 39%
30%
20%
Highh- Middle Income
10%
Highh- Income
23%
37% %
Low w Middle- Income
0%
No Pell Grrant
Receeived Pell Grant
Figure 13. Peercentage of Affrican American n Students by Pell P Grant Staatus and Major
80% % 70% % 60% % 50% % 40% % 30% % 20% % 10% % 0% %
77% 67%
33%
Non-STEM
No Pelll Grant
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STEM
23%
Received Pell Grrant
P Page 15
Figure 14. Percentage of African A Americcan Students byy Pell Grant Status S and Grad des
50% %
48%
4 47%
40% %
29% %
30% %
24% %
20% %
20%
10% %
M Mostly A's and B's
23%
M Mostly B's B and C's B's
0% %
No Pelll Grant
R Received Pell Grannt
Figure 15. Percentage of African A Americcan Students byy Pell Grant Status S and Incom me
35% %
30% % 25% %
20% %
15% %
33%
22%
311% 31% 24% L than $19,999 Less
21%
17% % 21%
$ $28,700 - $39,999
10% %
5% %
0% %
$ $40,000 or more
No Pelll Grant
$ $20,000 - $28,699
R Received Pell Grannt
Hispanic A Americans Th he data reported in Figure e 16 show the impact of obtaining o a Pell P Grant for Hispanic American students in terms of educational attainment a outcomes. Witth regard to low‐income students, Hisspanic American students who o received Pelll Grants were e more likely (45%) ( to earn their degree when comparred to low‐incom me Hispanic Am merican students who did n not receive a P Pell Grant (25% %) during colle ege. With regaard to low middle income Hisp panic Americaan students, Pell P Grant recipients were more m likely to graduate thaan low middle inccome studentss who did not obtain a Pell G Grant. Consisttent data were e obtained forr Hispanic American students in n the high mid ddle income grroup. Hispanicc American colllege studentss in the high m middle income group who receiived a Pell Grant (42%) we ere more like ely to complete their degrree when com mpared to Hisspanic American college stude ents who did not have a Pell P Grant (38 8%). Additionally, at the hig ghest income level, Hispanic A American students who had d received Pelll Grants (44%) were more likely to receive their degree e than Hispanic A American stude ents who neve er received a P Pell Grant (37% %).
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Figure 16. 1 Percentage of o Hispanic Am merican Studentts by Pell Grant Status S and Perssistence
60% %
50% %
51% 45% %
40% % 30% %
33% 25%
44%
37%
Low w- Income
42% Low w Middle- Income
38%
20% %
Higgh- Middle Income
10% %
Higgh- Income
0% % No Pell Grant G
Recceived Pell Grant
According to naational data, H Hispanic Amerrican studentss received app proximately 8% % of the sciencce and engineerin ng bachelor’s degrees awarded in Ame erica in 2008 8 (National Sccience Found dation, 2011). While growing stteadily, this pe ercentage is d disproportionaately low, whe en compared a against the relative percentaage of Hispanic Americans A in the United States. S To exp plore this issu ue with regarrd to the role e of Pell Grants in addressing g this nationall imperative, FFigure 17 show ws the extent t to which Pell G Grant recipien nts majored in STEM discipliness. The data sh how that Hisp panic Americaan Pell Grant recipients (277%) were more e likely to maajor in science an nd engineering g fields than t their peers wh ho did not recceive Pell Gran nts (17%). Figu ure 18 describe es the academic outcomes of Hispanic Ame erican studentts by Pell Gran nt status. The data demonsstrate that Hisspanic American students who o received Pell Grants were m more likely to earn mostly A A’s and B’s (54 4%) when compared to Hispanic American students s who did not rece eive a Pell Graant (47%). Thiss finding sugg gests that Hisspanic American students who o received Pe ell Grants were able to eaarn higher graades, which may m have indirectly impacted their persisten nce and gradu uation outcom mes. Also, the data indicate that Hispanic American stu udents who had aa Pell Grant (226%) were less likely to earn n mostly B’s w when compared to Hispanic Americans wh ho did not receive a Pell Grant (29%). Figure 17. Percentage P of Hiispanic Americcan Students byy Pell Grant Sttatus and Major
90% % 80% % 70% % 60% % 50% % 40% % 30% % 20% % 10% % 0% %
83% 73% %
STEM
27% Non-STEM
17%
No Pelll Grant
Received Pell Grant G
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Figure 18. Peercentage of Hisspanic Americaan Students by Pell Grant Staatus and Gradess
50%
40%
30%
20%
544%
60% 47% 29% %
M Mostly A's and B's
26%
M Mostly B's
16%
10%
18%
B and C's B's
0%
No Pell Grant G
Reeceived Pell Grant
As shown in Fig gure 19, with regard to labo or market retu urns, Hispanicc American stu udents who did not receive a Pell Grant were more likelyy to have higher salaries. Hiispanic Americcan students w who received a Pell Grant werre more likelyy to make lesss than $19,999 9 a year (29%)) when compared to their peers who did not receive a P Pell Grant (20% %). The data also showed th hat Hispanic A American Pell G Grant recipien nts were more e likely to make between $20,000 to $28,699 9 a year. In con ntrast, Hispanic American students who did not receive e a Pell Grant were more likely t to earn more t than $28,700 a a year.
Figure 19. Percentage P of Hiispanic American Students by Pell Grant Staatus and Incom me
40% % 35% % 30% % 25% % 20% % 15% % 10% % 5% % 0% %
36% 29% %
28% 20%
24% 2 29% 23% 12%
$ $20,000 - $28,699 $ $28,700 - $39,999 $ $40,000 or more
No Pell Grant
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L than $19,999 Less
Reeceived Pell Grantt
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White Americans Th he percentage e of Americanss who received d Pell Grants b by race is show wn in Figure 20 0.
Figure 20. Pell Grant Staatus and Race 80% 70%
73%
60% 50%
40% 30%
20%
48%
22%
11% 6%
19% %
10% 0%
No Pell Grrant
Received Pell P Grant
African American Hispanic American White Ameriican
These data indicate thaat among all Pell P Grant reccipients, 22%, 19%, 1 and 48% were w African American, Hisspanic American, and White Am merican, respe ectively. The data reported i in Figure 21 show the impacct of obtaining g a Pell Grant for W White American students in n terms of educational attaainment outco omes. With reg gard to low in ncome students, W White American students w who received P Pell Grants we ere more likelyy (45%) to earn n their degree when compared d to low‐incom me White American studen nts who did not n receive a Pell Grant (40%) during co ollege. Furthermo ore, with regaard to low middle income White W Americcan students, Pell Grant reccipients were more likely to graduate g than n low middle income stude ents who did not obtain a Pell Grant. For White American students in the high middle income group, Pell Grant G recipientts were less liikely to attain n their degree e (51%) when com mpared to Wh hite American students who o did not rece eive a Pell Graant (54%). At the t highest in ncome level, Whitte American students who did not receivve Pell Grants were more likkely to receive e their degree (63%) than White American sttudents who r received a Pell Grant (48%). These data sh how that as th he income of White eased, the pottential impact of Pell Grants on degree atttainment diminished. American students incre F Figure 21. Perccentage of White American Stu udents by Pell Grant G Status and Degree D Attainmeent
70%
60%
50% 40%
63% 52%
48%
45%
48% Low w- Income
40% 544%
51%
30%
20%
10%
Low w Middle- Income Highh- Middle Income Highh- Income
0%
No Pell Grrant
Receiived Pell Grant
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ws the extent to which Whiite American students s who o received Pell Grants majored in Fiigure 22 show STEM discciplines. The data show thatt White American Pell Grant recipients (332%) were more likely to maajor in science an nd engineering g fields than t their peers wh ho did not recceive Pell Gran nts (26%). Figu ure 23 describe es the academic outcomes off White Amerrican studentss by Pell Grant status. The data demonstrate that White American students who o received Pell Grants were e equally likely t to earn mostlyy A’s and B’s th han White American students w who did not re eceive a Pell Grrant. Figure F 22. Perccentage of White American Stu udents by Pell Grant G Status and Major
74%
80% 70% 60% 50% 40% 30% 20% 10% 0%
69% %
32%
26%
STEM Non-STEM
No Pelll Grant
Received Pell Grant G
Figure F 23. Perccentage of White American Stu udents by Pell Grant G Status and Grades
70%
60%
50% 30%
20%
622%
M Mostly A's and B's
40%
62%
10%
23%
M Mostly B's
20%
B and C's B's
12%
15%
0% No Pell Grrant
Reeceived Pell Grant
As shown in Fig gure 24, with regard to labo or market outtcomes, White e American stu udents who did not receive a Pell Grant we ere more likely to have hig gher salaries. White W American students who w received a Pell Grant werre more likelyy to make lesss than $19,999 9 a year (25%)) when compared to their peers who diid not receive a Pell Grant (18%). The data also a show thaat White Amerrican Pell Gran nt recipients were w more likkely to make betw ween $20,000 0 and $28,699 a year. In con ntrast, White American students who did d not receive a Pell Grant were more likely t to earn more t than $40,000 a a year.
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Figure F 24. Perccentage of White American Stu udents by Pell Grant G Status and Income
35%
30%
32%
31% 25% %
24%
25% 20%
18%
20% 23%
277%
L than $19,999 Less $ $20,000 - $28,699
15%
$ $28,700 - $39,999
10%
$ $40,000 or more
5%
0%
No Pell Grant G
Recceived Pell Grant
Implicatio ons for Policy In n an effort to streamline the Pell Grant p program and r reduce its costs, the recenttly released drraft of the Deparrtment of Labo or, Health and d Human Servvices funding b bill seeks dram matic changes to the structure of the Pell Grrant program (U.S. House o of Representaatives, 2011). FFor example, if f enacted, the e funding bill w would reduce the maximum number n of yeaars that stude ents could recceive Pell Graants and modify the income and eligibility f formulas there eby potentiallyy reducing the e grant award that many low w‐income stud dents would re eceive each year.. Given the income and povverty status of o many Africaan American and a Hispanic students, s thesse and other chan nges to the Pe ell Grant progrram described d in the fundin ng bill could se everely and ne egatively impaact the completion and retentio on rates for these populatio ons. Recomme endations for E Educators and d University Pe ersonnel Se econdary schools should develop, imp plement, or modify m existin ng educationaal programs, while continuing g collaborating g with financial aid professsionals, higherr education re esearchers and d school counselors to educate e middle and high school students s abou ut the basic an nd foundation nal components of the Pell Grant program. Preparing parrents and stud dents about P Pell Grants and d other federaal student finaancial aid prog grams would enaable families to o plan for the future and better respond t to changes in t the economy and federal sttudent financial aid policies. Co olleges and un niversities sho ould also conssider offering online and traaditional workkshops for stu udents that describe in clear and understtandable term ms how Pell Grant eligibility and Pell Grant award ds are determine ed. While mostt postsecondaary institutionss utilize federal formulas, in nstitutions maay also have sp pecific and particular factors th hat also determ mine Pell Gran nt awards and students shou uld have the o opportunity to know about thiss information and related processes p abo out specific methodology, m timeline, t limittations, restricctions, and proce esses pertainin ng to the struccture and imp plementation o of the Pell Graants program at their instittution. Similar to the previous recommendattion, this sugg gestion may se erve to betterr educate stud dents regardin ng the importancce of Pell Gran nts to fund the eir education. This information would also o help students to calculate e their
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own college expenses and increase their awareness of the possibility and need to supplement their financial portfolio via work, scholarships, or other strategies. Thus, indirectly, this recommendation may perhaps even connect the student to the institution and fortify their commitment to their college or university because it would communicate the extent to which the institution is working on behalf of students to ensure that they have appropriate financial resources to complete their college degree. Under the Higher Education Opportunity Act of 2008, colleges and universities that receive federal student aid funding are required to have a college cost calculator that will help families have a better understanding of the estimated costs of attending college. As an added feature, I recommend that colleges and universities also add or incorporate a Pell Grant calculator that integrates the latest federal policy changes, while also integrating the specific formulas used by the institution in determining Pell Grant eligibility and Pell Grant awards. While this modified Pell Grant calculator would only provide estimates based on estimated income data, it would provide some information to families, that in concert with the college cost calculator, could improve decision‐making processes by providing important estimates regarding the potential costs of attending college and the financial aid available via Pell Grants.
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DISCUSSION Higher education represents a mechanism for educating the society and producing an intellectually‐ capable populace. Thus, for more than fifty years, the federal government has taken many affirmative steps to secure the inclusion of economically‐disadvantaged students in higher education (McPherson & Stupor, 1991). As a result, the enrollment of students from low‐income backgrounds as well as first‐generation students has increased due to the support of federal financial aid programs. Due to the incessant division between the rich and poor in American society, the federal government must continue to mitigate financial challenges for low‐ income college students. The stated mission of financial strategies and techniques to spur the enrollment rate of economically‐disadvantaged students is to provide equal educational opportunities through economic interventions for low‐income families (Leslie & Brinkman, 1998). This purposeful objective of the federal government appears in the form of need‐based grants initially established in the Higher Education Act of 1965 (Curs, Singell, & Waddell, 2007). In many respects, higher education is supported because it is viewed and described as a social good (Winston, 1992). As a result, the federal government provides a considerable amount of financial assistance to institutions of higher learning via appropriations designed to increase access and equity in higher education (Paulsen & Smart, 2001). The reason for this investment can be traced back to the view that higher education helps to ameliorate social conditions and supports job creation (Yeager et al., 2001). Moreover, there is a considerable number of societal benefits of higher education including reduced crime rates, reduced poverty and unemployment rates, and increases in national productivity (Leslie & Brinkman, 1988; Paulsen & Smart, 2001). Despite the positive effects of higher education there exists a call for accountability and fiscal responsibility. Public sentiment and disfavor have recently befallen the American higher education system. As a result, the higher education system is being pressured to reassess its functions and finances. From a societal perspective, the investment in education produces financial and social rates of return throughout a person’s lifetime (Leslie & Brinkman, 1988). Given the personal benefits of higher education and the increasing number of low‐income students in the educational pipeline, public policy initiatives and appropriation decisions should be designed to bolster financial aid resources for the students least able to pay. In light of research‐based evidence, which clearly supports the contention that higher education produces many advantages which accrue directly to the individual in the form of financial and social benefits, future public policy recommendations should be aimed at making the federal student financial aid process easier to navigate especially for low‐income students. Also, higher education policies should be advanced, developed, and supported to ensure that adequate sources of funding are available for prospective college students who are least able to pay for their education.
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This descriptive report highlights several important issues that should be considered with regard to policy reform and budget considerations in terms of the future of the Pell Grant program. First, national data from the U.S. Bureau of Labor Statistics suggests that African Americans and Hispanic Americans are more likely than other racial groups to be unemployed. Second, national data show that many African Americans live below the poverty level (DeNavas‐Walt, Proctor, & Smith, 2011) and thus may be more likely to attend 2‐year institutions to begin their postsecondary studies (Provasnik & Planty, 2008) given the low cost of enrollment. Third, data from this study, showed that African American and Hispanic American students in the middle to high‐income levels benefitted from the Pell Grant program as did low‐income students. Moreover, White American students at the lowest income level also benefitted from the Pell Grant program. This descriptive study is based partly on the work of Tinto (1993) who notes that student retention can be explained by considering the extent and level of a student’s interactions within the institution such as academic experiences that students have on a college campus which support academic development as well as social experiences that help to connect students to the college environment, aid in their psychosocial development, and contribute to their overall satisfaction in college. According to Tinto, the combination of these academic and social experiences serves to shape, refine, and enhance a student’s commitment to his or her prospective, current, and future educational aspirations and to their commitment to their respective educational institutions. Moreover, these formal and informal experiences may also serve to reinforce a student’s devotion to an institution as well as to facilitate the development of educational goals and enhance academic performance in college. In the present study, it was hypothesized that Pell Grants, which affect a student’s ability to pursue academic and social integration experiences at colleges and universities, would impact a student’s decision to leave the institution before attaining a degree. Given the results, which show that African American and Hispanic American Pell Grant recipients at all income levels persisted to attain their intended degree, Pell Grants positively enhance student retention outcomes. In light of the descriptive analyses presented in this report, it can be suggested that the issues related to the cost effectiveness of the Pell Grant program may be secondary when compared to the stated missions and objectives of federal student financial aid assistance programs designed to support and provide low‐ income students educational opportunities through the use of federal appropriations. Clearly, cost effectiveness is an important consideration in the equation but only to the extent that costs can be reorganized to provide more funds to disseminate among the increasing numbers of low‐income students. In conclusion, cost‐saving strategies implemented to cut the current level of Pell Grant funds available or to reduce the number of students who could potentially benefit from federal student financial aid assistance should be avoided at all costs.
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REFERENCES Becker, G. S. (1993). Human capital: A theoretical and empirical analysis, with special reference to education. Chicago: University of Chicago Press. Chen, R., & DesJardins, S. L. (2010). Investigating the impact of financial aid on student dropout risks racial and ethnic differences. The Journal of Higher Education, 81, 179‐208. Cominole, M., Wheeless, S., Dudley, K., Franklin, J., & Wine, J. (2008). 2004/06 Beginning Postsecondary Students Longitudinal Study (BPS:04/06) Methodology report (NCES 2008‐184). Washington, DC: U.S. Department of Education. Curs, B. R., Singell, L. D., Jr., & Waddell, G. R. (2007). The Pell program at thirty years. In J. C. Smart (Ed.), Higher education: Handbook of theory and research (Volume 22, pp. 281‐334). New York: Springer. DeNavas‐Walt, C., Proctor, B. D., & Smith, J. C. (2011). Income, poverty, and health insurance coverage in the United States: 2010 (P60‐239). Washington, DC: U.S. Department of Education. Higher Education Act of 1965, Public Law 89‐329 (1965). Higher Education Opportunity Act, Public Law 110‐315 (2008). Horn, L., & Nevill, S. (2006). Profile of undergraduates in U.S. postsecondary education institutions: 2003–04: With a special analysis of community college students (NCES 2006‐184). U.S. Department of Education. Washington, DC: U.S. Department of Education. Hussar, W. J., & Bailey, T. M. (2009). Projections of education statistics to 2018 (NCES 2009‐062). Washington, DC: U.S. Department of Education. Julian, T., & Kominski, R. (2011). Education and synthetic work‐life earnings estimates (ACS‐14). Washington, DC: U.S. Census Bureau. Leslie, L., & Brinkman, P. (1988). The economic value of higher education. New York: American Council on Education: Macmillan. Mahan, S. M. (2011). Federal Pell Grant program of the Higher Education Act: Background, recent changes, and current legislative issues (CRS Report for Congress 7‐5700). Washington, DC: Congressional Research Service.
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Martin L. M., & Paulsen, M. B. (2005). Comparing the determinants of persistence for first‐generation and continuing‐generation students. Journal of College Student Development, 46, 409‐428. McPherson, M., & Stupor, M. (1991). Keeping college affordable: Government and educational opportunity. Washington, DC: Brookings Institution. National Science Foundation. (2011). Women, minorities, and persons with disabilities in science and engineering: 2011 (Special Report NSF 11‐309). Arlington, VA: Author. Pascarella, E. T., & Terenzini, P. T. (2005). How college affects students: A third decade of research (2nd Ed.). San Francisco: Jossey‐Bass. Paulsen, M. B., & Smart, J. C. (Eds.) (2001). The finance of higher education: Theory, research, policy & practice. New York: Agathon. Perna, L. W., Rowan‐Kenyon, H., Bell, A., & Thomas, S. L. (2008). A typology of federal and state programs designed to promote college enrollment. The Journal of Higher Education, 79, 243‐267. Posselt, J. R. (2009). The rise and fall of need‐based grants: A critical review of presidential discourses on higher education, 1964‐1984. In J. C. Smart (Ed.), Higher education: Handbook of theory and research (Volume 24, pp. 183‐225). New York: Springer. Provasnik, S., & Planty, M. (2008). Community colleges: Special supplement to the 2008 condition of education. (NCES 2008‐033). Washington, DC: U.S. Department of Education. Radford, A. W., Berkner, L., Wheeless, S. C., & Shepherd, B. (2010). Persistence and attainment of 2003–04 Beginning Postsecondary Students: After 6 years (NCES 2011‐151). U.S. Department of Education. Washington, DC: U.S. Department of Education. Rubin, R. B. (2011). The Pell and the poor: A regression‐discontinuity analysis of on‐time college enrollment. Research in Higher Education, 52, 675‐692. Steinberg, M. P., Piraino, P., & Haveman, R. (2009). Access to higher education: Exploring the variation in Pell grant prevalence among U.S. colleges and universities. The Review of Higher Education, 32, 235‐270.
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The White House. (2009). Excerpts of the President’s remarks in Warren Michigan and fact sheet on the American Graduation Initiative. Available: http://www.whitehouse.gov/the_press_ office/Excerpts‐of‐the‐Presidents‐ remarks‐in‐Warren‐Michigan‐and‐fact‐sheet‐on‐the‐American‐Graduation‐Initiative. Tinto, V. (1993). Leaving college: Rethinking the causes and cures of student attrition (2nd ed.). Chicago: University of Chicago Press. U.S. Bureau of Labor Statistics. (2011). The employment situation ‐ October 2011. U.S. Department of Labor. U.S. Department of Education. (2010). 2009‐2010 federal Pell grant program end‐of‐year report. Available: http://www2.ed.gov/finaid/prof/resources/data/pell‐2009‐10/pell‐eoy‐09‐10.pdf. U.S. Department of Education. (2011a). Fiscal year 2012 budget summary and background information. Available: http://www2.ed.gov/about/overview/budget/budget12/summary/ 12summary.pdf. U.S. Department of Education. (2011b). Persistence and attainment among Pell grant recipients: Results from the Beginning Postsecondary Students Longitudinal Study of 2004/09 (NCES 2011‐275). Washington, DC: National Center for Education Statistics. U.S. House of Representatives. (2011). Draft Fiscal Year 2012 Labor, Health and Human Services Funding Bill. Available: http://appropriations.house.gov/UploadedFiles /FY_2012_Final_LHHSE.pdf. Wine, J., Cominole, M., & Caves, L. (2009). 2004/09 Beginning Postsecondary Students Longitudinal Study (BPS:04/09) Field test (NCES 2009‐01). Washington, DC: U.S. Department of Education. Winston, G. (1992). Hostility, maximization, & the public trust. Change, 24(4), 20‐27. Yeager, J. L., Nelson, G. M., Potter, E. A., Weidman, J. C., & Zullo, T. G. (Eds.). (2001). ASHE reader on finance in higher education (2nd ed.). Boston: Pearson.
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