Making Life Harder for Community College Students

Rising levels of student debt and its long-term harm on recent graduates has received considerable news coverage, especially given recent activism by students against this alarming trend. Yet the story of millions of community college students who fund their education without debt has received no attention. That's too bad, since the impact of rising tuition and inadequate financial aid is just as great if not much greater on these students. And their situation is likely to get worse, with Congress considering cuts to Pell Grants in ways that would disproportionately hurt community college students.

While loans might seem unnecessary for community college students because tuition costs tend to be lower at these colleges, community college students, just like four-year students, must also pay for books and other educational expenses in addition to their basic living expenses. Available financial aid covers only a fraction of these costs. After taking all grant sources into account, 99 percent of full-time dependent community college students in the lowest income quartile still had an unmet financial need of $7,147 in academic year 2007-08.

A much smaller, though rising, percentage of community college students takes out loans to pay for their education. In 2007-08, 17 percent of full-time community college students took out a federal Stafford Loan and only 6 percent borrowed a private student loan.

So how do community college students finance their education? Many of them do so by enrolling part-time so they can work long hours or work long hours while also keeping a full course load. Sixty percent of community college students enroll part-time and only 16 percent don’t work. Among those working, three quarters work more than part-time (more than 20 hours per week). Yet it is precisely these strategies that prolong the time it takes a student to complete their studies or to do well, increasing their chances of dropping out. So while many community college students may not have a loan to worry about, the long term consequence of their funding strategies—not graduating—is grave. Among full-time associate’s degree students, the completion rate after six years is just 28 percent.

Now the House Appropriations Committee wants to make getting an education even harder for these students -- proposing to cut Pell Grant funding by $44 billion over 10 years in ways that seem designed to hurt America's poorest college students the most. Here are some more details on the proposed changes:

Nearly half ($22 billion) of the cuts would come from removing the 2007 increase in income protection allowances (IPAs). The IPA is the amount of income a student can keep to cover minimal living expenses before being expected to contribute to college costs. Current IPA levels are already near the poverty line. By reducing the amount of income that students can protect, many working students, especially those working long hours, will become ineligible for the Pell Grant or have their grant size reduced.
An additional $12 billion in cuts would come from expanding the definition of income used to determine eligibility for Pell Grants to include means-tested benefits, refundable tax credits and untaxed Social Security benefits, hurting students and families receiving means-tested benefits.
Their proposal would reverse the 2007 policy that helped reduce uncertainty and complexity in the financial aid process for the neediest students. It would prevent students with very low family incomes from receiving an automatic-zero estimated family contribution (EFC), which currently makes them eligible for the maximum Pell Grant if they enroll full time and meet additional requirements.
Students who enroll less than half time and students without a high school diploma or GED even if they prove their “ability to benefit” from college would become ineligible.
Their proposal would retroactively limit lifetime eligibility for Pell Grants to six years (it’s currently nine years). This proposal especially hurts community college students who take remedial courses (60 percent) or work full- or part-time and hence tend to take longer to complete their studies.

Congress must find a way to address funding gaps, but it must not do so by cutting out students with the greatest needs. As a recent action alert by The Education Trust put it, it’s a “A Dumb Decision” that will not only hurt hard working students but will also hurt us all, for our economy increasingly demands more highly educated workers.