The Pell Grant program is a federally funded program that is unlike a loan and does not need to be paid back. The current maximum award is $5,550 and the amount that a student is granted depends upon student status, their need and costs. The cut off for earned income is $50,000 per year. Also, if someone earns $50,000 a year and has invested $300,000 in a savings mechanism they would not qualify for the grant unless they do some sort of asset reallocation. In 2009, the program was expanded in terms of eligbility and maximum awards.
Over the past 10 years the most elite colleges have been pressured to allow access to lower income students. Many colleges reacted by altering their recruitment plans and by offering more financial aid.
An analysis by The Chronicle of Higher Education of information from the Education Department showed that the efforts have had little effect. The number of those who are receiving Pell Grants has been moving ever so slowly downwards over the the past 4 years.
The 2012-13 data showed that about 18% of the students at the 50 wealthiest colleges received Pell Grants. At the public and non-profit 4-year schools, 29% of students received Pell Grants. There is a great divide.
Some colleges who rank in the elite category have increased their student population seeking Pell Grants while others have not. Some of these schools are competing for the same students, which makes it difficult to track.
In another study conducted by The Chronicle, 12-month Pell Grant awards were analyzed as well as the 12-month enrollment figures. In 2012-13, there was a wide span of undergrads receiving Pell Grants at the 50 wealthiest colleges. Colorado University recorded 6.3% and UCLA recorded 34.1%. These findings demonstrate the challenges that schools are up against in enrolling and educating needy students while achieving the goals of the school.
Yale has a history of distributing a high level of need-based aid. This message is hard to market because there is a belief etched in our minds that some schools are very out of reach financially. Yale had 14% of their students receiving Pell Grants in 2012-13.
Elite colleges that revealed the largest number of students receiving Pell Grants from 2008-09 to 2012-13 contributed the allowance to offering better financial aid awards and to admission recruitment outreach. For those schools that did not see success in this area, the administration acknowledges the expansion of the international population, out of state students and summer enrollments as contributing factors.
Amherst College saw a large drop in undergrads receiving Pell Grants from 2008-09 to 2012-13 with a decrease of 3.2%. This could be due to an effort to lower student debt. In 2008, Wellesley made the decision to eliminate offering loans to students whose families earned $60,000 or less a year. This change resulted in an increase in low-income student enrollment.
The Director of Financial Aid at Duke, stated that there is a certain amount of reluctance to borrow on the part of the students whose families are first generation students and whose parents may not have grown up in the states.
Some Financial Aid Directors cite geography as a barrier when low-income students are deciding upon a school. The students have concerns about being far from home and the cost of travel.
Lastly, it is important to keep selective colleges affordable for those in need. These institutions have the ability to set precedence with their policies and procedures. The Pell Grant program is valuable. Colleges face many challenges when working to meet their goals. The elite schools should seek out the challenge, get creative and improve their offerings.