Pell Grant Slashes Cut Vital Educational Access

June 19, 2005 | LA Daily News |

Government Accounting Office figures released in late May about upcoming changes to Pell Grants provide another glaring example of why it's time to let go of the illusion that we're moving toward an "ownership society."

To have an ownership society, we have to commit to ensuring widespread, affordable educational opportunity. Education is key to the increased earning potential needed to enable saving and ownership. But even with this fact staring us in the face, we are actually decreasing access to education.

Education is no longer a guaranteed road to prosperity. But it is still the surest path available for all Americans, regardless of background or familial wealth. Higher educational attainment correlates with the signs of success in an ownership society — among these higher rates of homeownership, health insurance, personal savings, net worth and retirement resources.

Over the course of a lifetime, high school graduates earn 30 percent more than individuals without diplomas. Those with four-year college degrees earn 233 percent more, and those with doctorates or professional degrees earn triple. With increasing education levels comes increasing likelihood that one will be able to own, save and invest.

Yet we've begun an assault on educational opportunity.

The 2006 federal budget chokes off key programs that support college entry and are especially helpful to students from financially strapped families. Programs on the chopping block include Gaining Early Awareness and Readiness for Undergraduate Programs, a large-scale effort that helps low-income students prepare for and succeed in college, and the Leveraging Educational Assistance Partnerships program, which currently provides $167 million a year to needy college students.

According to the most recent GAO estimates, close to 2 million low- and moderate-income students will see their Pell Grants decrease or altogether disappear next year. Students with family incomes of more than $25,000 will likely see their Stafford Loans decrease as well.

These are only the latest blows to educational opportunity. We've been reducing the resources we devote to need-based financial aid for nearly two decades. We've also been continuously replacing subsidized student loans with unsubsidized ones.

There's a real cost to our negligence. Each year, more than 400,000 college-qualified students from low and moderate income families are unable to attend four-year schools, largely due to lack of financial resources.

Students who are able to attend college are facing higher costs than ever and racking up historic amounts of debt, both through loans and credit cards.

In constant 2003 dollars, the cost of tuition and fees at an average four-year state college grew 56 percent between the 1983-84 and 2003-04 school years. Tuition and fees are up another 11 percent this year. Average student-loan indebtedness increased 66 percent between 1997 and 2003.

About one-quarter of college students report using credit cards to finance their education. Estimates suggest that the amount of credit card-debt among the average college student has doubled or tripled since 1990. Debt among college-age students (ages 18-24) is up 104 percent since 2001. Debt among those ages 25-34 is up 50 percent.

Increasing debt is the opposite of fostering ownership. We need to stop moving in this counterintuitive direction.

Ensuring educational opportunity means making college more affordable. It means stalling the escalation of tuition at public institutions and revitalizing need-based financial aid. It does not mean trimming access to student loans and Pell Grants or cutting federal programs that help needy students prepare for and afford college.

That these measures require significant investment is reality. But expecting ownership without such investment is fantasy.

Jennifer Wheary is a senior fellow at Demos, a public policy organization in New York City.