Measure Twice: The Impact on Graduation Rates of Serving Pell Grant Recipients | 08.05.13

Posted in Financial Aid, News By David Levy

The Advisory Committee on Student Financial Assistance, an independent committee providing expertise on student aid to Congress and the Secretary of Education, has recently released a policy bulletin, “Measure Twice: The Impact on Graduation Rates of Serving Pell Grant Recipients.”

The analysis raises concerns about tying federal student aid to measures of college performance such as 6-year graduation rates and academic progress. By examining correlations between a college’s six-year graduation rate and three other factors—the percentage of first-time students who are Pell Grant recipients, average student test scores, and the amount of endowment per student, the committee found that colleges with more Federal Pell recipients and fewer financial resources tend to have lower graduation rates. “The [ACSFA] analysis finds that these three inputs are powerful determinants of 6-year graduation rates at nonprofit 4-year public and private colleges.”

As Mark Kantrowitz, Publisher of Edvisors, has noted, “College graduation rates correlate with academic performance and other risk factors, so refocusing the Pell Grant program on completion will shift eligibility from financial need to academic merit. High-risk students – such as first-generation college students, low-income students, students who are single parents, students who lack a high school diploma, students who work full-time while enrolled and students who enroll part-time – are less likely to graduate. This represents an abandonment of the basic principle of college access that every student should have an equal opportunity to pursue a college education without regard to ability to pay. Refocusing the Pell Grant program on completion will introduce a bias in favor of Bachelor’s degree programs at more selective colleges.”

By excluding high-risk students, colleges and universities can easily increase their graduation rates. However, efforts to boost college completion may directly or indirectly shift eligibility for the Federal Pell Grant program from financial need to academic merit, hurting college access by low-income students. Thus, the college completion agenda may sacrifice college access to gain improvements in graduation rates without achieving meaningful increases in the number of students graduating from college. According to Kantrowitz, “The focus of improvements in college completion should be on increasing the number of college graduates, not increasing the college graduation rates.”

One also wonders if graduation rates, as many advocacy groups have suggested, are the best indicator of institutional quality? Regardless of the benchmarks used, as the ACSFA bulletin suggests, “All colleges must meet minimum standards of performance, implement policies and practices shown to be effective in improving graduation rates at peer colleges, and provide adequate consumer protections, including accurate information to students and parents.”

David-Levy-EdvisorsDavid Levy is Associate Editor of the Edvisors Network. David brings 30 years of experience as Director of Financial Aid at some of the nation’s leading colleges, including the Scripps College, California Institute of Technology and Occidental College. He is respected by students, parents and financial aid professionals nationwide because of his extensive outreach and volunteer activities, his extensive knowledge of financial aid and his leadership in helping to simplify the aid application process.

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