Pell Grants: Billions Go to Students Who Don’t Graduate, Analysis Finds

Elizabeth Chuck, NBC News, August 23, 2015

Billions of taxpayer dollars go to college students who never end up with a diploma in their hands, a new report found.

Pell grants–which are given to low-income families and, unlike student loans, do not need to be paid back–are the costliest education initiative in the nation. But little official data exists on whether they are a good investment, according to the education watchdog Hechinger Report.

Education Department Undersecretary Ted Mitchell last month lauded Pell grants as “one of the key levers that we have” to increase college completion rates. But an analysis published Monday by Hechinger revealed that Pell recipient graduation rates are often considerably lower than the overall graduation rate–even six years after a student starts college.

To make matters worse, the government keeps no official tally of what proportion of those who receive the grants end up getting degrees–despite the fact that money spent on Pell grants has quadrupled since 2000.

“There’s two scandals here. We have spent over the last decade one quarter of a trillion dollars on Pell grants, and if you ask the federal government what percentage of those kids graduate from college, they can’t tell you,” said Richard Vedder, director of the non-profit Center for College Affordability and Productivity. “The second scandal is as far as we can estimate, that graduation rate is embarrassingly low.”

Vedder has done research on Pell recipient graduation rates, which concluded that only about 40 percent Pell recipients graduate, significantly lower than the national average of about 60 percent.

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Taxpayers paid $31.4 billion on Pell grants in fiscal year 2015, and since 2000, they have poured $300 billion into them, Hechinger reported.

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According to Education Secretary Arne Duncan, more than 2 million students receive Pell grants. The grants are considered so successful that in July, the Department of Education announced it was starting a pilot program that makes prisoners eligible for them.

For the 2015-2016 school year, the maximum Pell grant award amount is $5,775. Last year, Congress ordered the Department of Education to compile Pell grant graduation rates; the report, released last November, only looked at 70 percent of Pell recipients, and didn’t break down it down by college, citing lack of data, according to the Hechinger story.

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