A Better Way to Spend $60 Billion? Expand Pell Grants

Let's make an even greater investment in the Pell Grant program. And let's eradicate labor market inequalities that reward white high school dropouts with greater access to jobs than black graduates with a community college degree.
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Leading up to his most recent State of the Union address, President Barack Obama unveiled in Knoxville, Tennessee a proposal to offer all qualifying Americans a two-year, tuition-free community college education. During his remarks, the president argued that the plan would strengthen the U.S. workforce and make it more globally competitive. His plan also would enable higher education to be more accessible "to responsible students who are willing to work for it." Notwithstanding the implicit premise that community college students are not as motivated as others in the first place, a White House spokesperson estimated a price tag of $60 billion over 10 years with three quarters of the program financed by the federal government and the remaining quarter by participating state governments. However, a better way to spend that $60 billion dollars would be to expand the existing federal Pell Grant program and empower students with greater resources to choose the college best for them.

The maximum amount of a Pell Grant award today is just under $6,000 a year. Average community college tuition is approximately $4,000, not including the cost of additional fees, books, transportation, food, child care (if applicable) and other expenditures. The president's proposed "America's College Promise" is of no added value to our least privileged students. They are already eligible for free tuition at community colleges via the current Pell Grant program. Thus the president's plan would primarily subsidize the community college tuition of more well off students.

In the absence of a more universal approach, such as a comprehensive tuition-free community and four-year college system, the current effort restricts students' options. Why design a funding system that explicitly subsidizes one segment of higher education at the expense of another? Instead of a paternalistic proposal, we need a college access plan that allows students to choose the institution that best meets their needs and goals. An even greater investment in the Pell Grant program, from expanded eligibility to increased funding to account for increasing levels of wealth and income inequality, would provide all students with better access to community colleges and better access to non-profit four-year colleges as well.

Understandably, a number of higher education leaders have expressed concern about the very possible reverse-migration from four-year institutions that could subvert "America's College Promise." Southern University system board member, Tony Clayton for example, worries that President Obama's plan "would funnel students who might otherwise go to HBCUs instead to community colleges." There is also legitimate concern that this very act of resource-diversion is an attempt to underfund, dismantle and privatize public universities, undermining the quality and likelihood of all students receiving a well-rounded education.

The president's free community college tuition plan is also troublesome at the rhetorical and philosophical levels. His assertion in Knoxville that "a college degree is the surest ticket to the middle class" and the "key to getting a good job that pays a good income" does not match the reality for millions of Americans. Among recent college graduates, the jobless rate for blacks in 2013 was more than double that for whites. Equally striking, a recent New York Times piece reported that "the unemployment rate in 2013 was lower among whites who never finished high school (9.7 percent) than it was for blacks with some college education (10.5 percent)."

Janelle Jones and John Schmitt of the Center for Economic and Policy Research also found similar disparities examining the labor market experiences of recent black college graduates, pointing to a combination of the recent economic downturn and persistent racial discrimination in the labor market as contributing mechanisms. They write that while a college degree "blunts" the impact of these effects relative to blacks without one, "college is not a guarantee against either of these forces."

If President Obama's goal serves to increase equitable access to higher education, then a concerted effort to universalize tuition-free models for community and four-year institutions alike, while expanding funding opportunities for HBCUs, would be in order. But that proposal is not on the table. Let's make an even greater investment in the Pell Grant program, which would provide low-income students with better access to both community colleges and nonprofit four-year institutions. And let's eradicate labor market inequalities that reward white high school dropouts with greater access to jobs than black graduates with a community college degree.

This piece was originally published by Valerie Strauss in the Washington Post's Answer Sheet on Sunday, February 8.

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