Report: Colleges increasingly unaffordable for Pell Grant recipients

The majority of two- and four-year public colleges and universities are unaffordable to the average Pell Grant recipient, according to a new report from the National College Attainment Network (NCAN). Pell Grants were meant to increase access to higher education for low-income students—most Pell Grant recipients have an annual personal or family income of less than $40,000. However, the award has lost much of its buying power as college costs increase, raising concerns that the number of truly public affordable colleges is dwindling and spurring national campaigns calling for policymakers to double the current maximum Pell Grant to a total of $13,000.

According to NCAN’s calculations, only eight states had five or more four-year colleges that were affordable to Pell Grant recipients, and 10 states had no affordable public college or university between the 2015-16 and 2019-20 academic years, Higher Ed Dive reports.

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A closer look at college (un)affordability

NCAN classifies an institution as affordable when its total price plus $300 in emergency expenses is not more than the combined total of Pell Grant recipients’ average federal, state, and institutional grant awards; federal loan disbursement; expected family contribution; Federal Work Study award; and summer wages. Total price for four-year colleges reflects available data for in-state students living on campus, while the price for community colleges reflects data for in-state students living off campus not with family.

Related: Spending package boosts maximum Pell Grant by $400 >

NCAN observed a downward trend in the percentage of four-year institutions that are affordable for Pell Grant recipients, which decreased from 29% in the 2015-16 academic year to 24% in 2019-20. During the same timeframe, affordability gaps, or average unmet financial need, increased by 59% at public four-year institutions, from $1,656 to $2,627.

At public two-year colleges, the affordability gap increased by 269%, from $246 in 2015-26 to $907 in 2019-20. In 2015-16, half of the 622 community colleges NCAN examined were affordable for Pell Grant recipients, but by 2019-20, that number fell to 40%.

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Some states outperformed others on affordability. In 2019-20, Washington state had the highest rate of affordable institutions (82%), followed by Kentucky and New Mexico at 75%. One hundred percent of community colleges in all three states were deemed affordable for Pell Grant recipients.

However, NCAN says it might have overstated the number of colleges that are affordable to Pell Grant recipients, as its formula is based on the assumption that those students work full-time during the summer and part-time during the academic year to offset the cost of attendance. This work schedule might not be feasible for students who are caregivers, student-parents, or providing financial assistance to their families, NCAN says.

Travel costs also might drive up the price of attendance, especially for students attending community colleges outside of their districts or traveling long distances to attend four-year institutions. In those cases, Pell Grant recipients might need to take out additional loans or work extra hours to cover travel costs.

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