WASHINGTON, D.C. | December 3, 2013 -
This hearing is the eleventh in a series designed to gain a more complete understanding of the challenges facing postsecondary students and institutions. The hearings help to inform the committee of policy changes that should be considered as part of the upcoming reauthorization of the Higher Education Act.
Over the last year these hearings have provided a forum to discuss opportunities to encourage innovation, increase transparency, enhance data collection, and improve college access and affordability. We have been fortunate to hear from a number of expert witnesses whose testimony and insight will prove invaluable as we begin crafting legislation next year to strengthen America’s higher education system through HEA reauthorization.
With roughly 71 percent of undergraduates receiving some form of federal financial aid, simplifying the complex system of grants, loans, and institutional support programs remains a central goal in our reauthorization efforts. Just last month the committee discussed proposals to help streamline student aid programs. Today we will build on that conversation by examining the Pell Grant program, which many consider to be the cornerstone of federal student aid.
When the Pell Grant program began in the early 1970s, its central focus was providing financial assistance to help low-income students access higher education. In its first year, the program provided aid to 176,000 students. Since then, Pell has grown dramatically; today more than 9 million students are Pell Grant recipients.
The sharp rise in Pell participation in more recent years has been attributed to several factors. One is the economic recession, which spurred many individuals to go back to school to learn skills needed to compete for today’s jobs. Also, Washington policymakers passed legislative changes to Pell to increase the program’s maximum grant award and weaken student eligibility requirements – allowing more students to receive larger Pell Grant awards.
Since the program guarantees aid to any student who meets the eligibility criteria, enrollment spikes threaten the Pell program’s long-term fiscal viability. Pell is one of the federal government’s largest education expenditures, costing taxpayers about $30 billion a year. As with every federal program, especially one with such a hefty price tag, Washington leaders have a responsibility to ensure the Pell Grant program is effective.
There is concern among members of the higher education community and many of my colleagues in Congress that Pell has strayed too far from its original intent. With such a large recipient pool, some worry the program could eventually become insoluble, leading to a lack of funds for our neediest students. Budget experts have projected multi-million dollar funding gaps, raising additional questions about whether the program’s current structure is fiscally responsible.
Recognizing the Pell Grant program is on an unsustainable path, leaders in higher education, business, and public policy have begun circulating proposals for reform. One proposed first step to strengthen the program is to simplify the Pell Grant application process. It has been suggested that instead of forcing families to complete overwhelming amounts of paperwork, a more streamlined process would better inform students of their options and generate a more accurate reflection of their financial needs.
Additional proposals suggest tightening eligibility requirements, increasing grant flexibility, and implementing accountability measures to ensure the program is not only helping the neediest students enroll in college, but is also rewarding and encouraging those who make progress toward completion. When hardworking taxpayer money is being spent, taxpayers deserve accountability which means that it is critical that we have the information necessary to know what is and is not working in the Pell program.
The Pell Grant program has become the epicenter of our nation’s financial aid system and we all want to make sure it meets its target of supporting low-income students who wish to earn a college degree. However, we must also be honest about the challenges facing the program and work together in good faith to enact smart policy changes that will help get the program back on stable ground.
We have a great panel of witnesses with us today, and I look forward to hearing their thoughts on ways we can strengthen the Pell Grant program through our upcoming reauthorization of the Higher Education Act.
# # #