L A LLEGADA DE I NTERNET

CATION POLICY

Ms. ROBINSON. Madam Chair, Ranking Member Hinojosa, and distinguished members of the committee, thank you for this oppor- tunity on my own behalf and on behalf of the Pope Center.

Pell grants, the Pell program faces two serious problems today. First, the increasing cost to the taxpayer and its failure to serve students well. The program, in short, is too expensive, and too few students graduate. By returning the Pell program to its roots, it is possible to trim costs while improving student success and access. Let me start with costs.

In 2011–2012, over 9 million students received Pell grants. Awards totaled more than $33 billion. Thirty-five percent of all U.S. students received some form of Pell grant. Since the creation of the program, participation has grown more than 4,500 percent, and much of that growth consists of middle-income students. Eight percent of Pell recipients come from families whose income is high- er than the national median, and 60 percent of the Pell recipients come from families above the federal poverty threshold.

It may seem ironic that these middle-income students do not, in general, benefit from Pell grants. Students from families earning $25,000 to $55,000 who receive Pell grants are actually less likely to graduate than non-recipients with the same income. For low-in- come students the opposite is true. Pell recipients whose families earn less than $25,000 are more likely to graduate than non-recipi- ents with the same income. In short, Pell grants help our neediest students achieve graduation but do not improve graduation rates for middle-income students.

Pell grants also work best for students with strong academic backgrounds. The college retention rate of Pell recipients who took a rigorous curriculum in high school was 87 percent, compared to just 57.6 percent for grantees without a rigorous curriculum. Pell recipients with SAT scores between 400 and 800 graduated at a rate of only 34.2 percent. Those with scores between 1140 and 1600, out of 1600, graduated at a rate of 73.7 percent. Similar dif- ferences are seen when high school GPAs of Pell grantees are com- pared.

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With that in mind, we have several recommendations. First and foremost, we need better data so the Department of Education can evaluate the effectiveness of Pell grants. And second, we need to make sure that the public can have access to that data. But better data are just a start. Financial eligibility should be limited to stu- dents whose income falls below 133 percent of the federal poverty level, a cutoff commonly used for qualification for programs such as Medicaid. With a simple cutoff, the FAFSA can be simplified.

For very low-income students, full eligibility could be determined in only five or six questions instead of the long form that students face today. And for students who are not very low-income, the form could be simplified, but not quite to that extent. Colleges and uni- versities, next, should place limits on students’ Pell grant money to stop students from receiving grants and then dropping out of their courses. One positive example comes from North Carolina, from Central Piedmont Community College. They have implemented several policies to do just that.

They don’t disburse grants until after 10 percent of the semester has been completed. They disburse money in two parts over the se- mester to make sure that students stay around. And they limit what can be purchased with financial aid. Next, grants should go to students who are prepared for the challenge of college work. Academic requirements for initial and continuing Pell eligibility should be tightened. One option to do so would be to match aca- demic standards set by the National Collegiate Athletic Associa- tion, which requires first-year athletes to have completed certain high school courses.

It also requires students to have taken ACT or the SAT and to meet threshold scores based on GPA. Such a policy would focus on the students most likely to succeed, and give them an incentive to better prepare for college. To further encourage students to grad- uate, grant amounts should be linked to enrollment intensity. Stu- dents who receive the maximum award should be expected to take 15 credit hours, not 12. Also, this could be coupled with the Pell Well concept introduced by the National Association of Student Fi- nancial Aid Administrators, which bases awards on a 12-month schedule rather than the academic year.

In sum, the current Pell program faces serious challenges. But we can meet those challenges with better data, financial planning and student accountability. Thank you.

[The statement of Ms. Robinson follows:]

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Chairwoman FOXX. And I thank the first two witnesses for being so good about being on time.

Mr. Dannenberg, I recognize you for five minutes.

STATEMENT OF MICHAEL DANNENBERG, DIRECTOR OF HIGH-