Monday, December 25, 2006

Universal Access, Student Loan Debt and Pell Grants: The College Crisis

Powerful quote: "For the price of
just two weeks of the cost of Iraq, they could almost
double the Pell Grant program and free up our college
graduates to spend their incomes in ways that improve
both their lives and the economy." -Angela


It was just about this time of year 35 years ago, when
the United States Congress passed into law a
peculiarly American idea--every person should have
access to a college or university.

That 1972 federal law, initially named Basic Grants
and later Pell Grants, has during this one-third of a
century awarded more than $100 billion to more than 30
million college-bound students.

Pell Grants represented a significant departure from
the earlier higher education acts with money provided
directly to moderate-income students for the purpose
of tuition, books, and services at the college of
their choice.

Pell Grants were initially intended for families whose
young people attended college full time. During the
decades since, students are beyond the traditional
families of the 1950s, 60s, 70s. Many of today's
students have their own families, work part time, are
enrolled not only in four-year institutions, but also
in two-year or vocational programs.

The Pell Grant program has not only had policy changes
throughout the years but politics at the national
level have also influenced the awarding of the grants.
During the early 1970s and despite President Nixon's
statements in favor of Pell Grants, his Office of
Education refused to release the $122 million dollars
appropriated by Congress. In the late 1970s, under
Presidents Ford and Carter, Pell Grants were at their
dollar value peak, covering almost 80% of college

The 1980s and 90s, however, were a different story.
Budget tightening by the Reagan administration fell
heavily on moderate income college students.
Purchasing power fell and with increasing numbers of
low income people, Pell Grant eligibility was
stretched too thin. In the 1990s President Clinton
ordered the largest dollar increase in Pell Grant
history, but even that boost left the grants'
purchasing far below its peak in the 1970s.

Both trends and projections verify the difficulty that
now faces college students. Throughout America, state
support for college assistance has been declining,
with public spending per-student, that is FTE, at an
all time low.

Public spending shortfalls in education are bad for
this country because they effectively both limit
college admissions and quality of the school's
offerings. Young people from families who are in the
top 20% of incomes receive 80% of college degrees.
Those students from families earning in the bottom 20%
of incomes will get only 5% of the college degrees.
The gap between the poor and the better-off is growing
and lack of a college degree is one of the reasons.

Both unemployment rates and earnings data demonstrate
the importance of education. Unemployment is three
times higher for those who drop out of high school
than it is for those with a bachelor's degree. Median
earning for those with a master,s degree is $62,000
per year in America; it is half of that for those who
only finish high school.

An obvious difficulty for today's college students is
student loan debt--it is a crushing burden on the
shoulders of today's students and tomorrow's
professionals. More than 30 years ago, Pell Grants
were created precisely to help moderate income
families pay for their student,s college costs. For a
number of reasons, including the lack of political
will on the part of presidents and the Congress, the
purchasing power of Pell Grants has fallen by
two-thirds and so our students have no choice but to
accept the burdening loans.

President Bush and the next Congress could begin to
dramatically change the reliance on loans by
significantly increasing Pell Grants, which as the
name says, are grants--not loans. For the price of
just two weeks of the cost of Iraq, they could almost
double the Pell Grant program and free up our college
graduates to spend their incomes in ways that improve
both their lives and the economy.

Pat Williams served nine terms as a U.S.
Representative from Montana. After his retirement, he
returned to Montana and is teaching at The University
of Montana where he also serves as a Senior Fellow at
the Center for the Rocky Mountain West.


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