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|Federal Policy Priorities|
Addressing Equity Gaps in Higher Education
Students from low-income backgrounds are only half as likely to complete a postsecondary certificate or degree by age 26 as high-income students. Moreover, students of color and those who are the first in their family to attend college experience disproportionately lower rates of postsecondary success.
These gaps exist because of structural inequities in our higher education system, and closing them is a compelling national priority with a tremendous potential payoff. Why? Because Americans from the lowest-income backgrounds who obtain a college degree are five times more likely than their peers to rise from poverty.
Policies to Create Opportunity for All Students:
Build on the foundation of the FUTURE Act FAFSA improvements to eliminate additional unnecessary questions, create early awareness and an expedited process by automatically awarding full Pell Grants to students who receive means-tested benefits, and decrease the audit-like verification process that can lead an estimated one-quarter of Pell eligible students abandoning the aid application process.
At its peak in 1975-76, the maximum Pell award covered more than three-fourths of the cost of attendance at the average four-year public university. Today, it covers less than 30%. Congress should return the purchasing power of the Pell Grant to 50% of this cost – or approximately double the current grant. Additionally, the Pell Grant should then be tied to inflation to ensure its timely growth.
The Federal Work-Study formula awards lump sum grants to institutions based on their length of time in the program. This outdated formula does not target funding to institutions with the largest portion of students from low-income backgrounds. Congress should re-work this formula and increase the investment in FWS, which at current funding levels can only support 10% of Pell Grant recipients.
Support All Our Students
All students regardless of their race, ethnicity, or immigration status deserve the opportunity for an affordable higher education. To support this goal, Congress should allow low-income DACA/TPS recipients or those meeting similar requirements to be eligible for federal financial aid. Further, Congress should continue its support of MSIs and HBCUs as they graduate disproportionate numbers of students of color.
Standardize Financial Aid Offers
Financial aid offers can make it difficult for students to know how much they owe the institution, how much debt they will accrue, and what their additional expenses will be. Congress should require standardized terms and formatting to help students compare costs and make an informed decision.
Close Gaps through Data
The current landscape of federal data leads to an incomplete view of student attainment. A revamped system with student-level data would allow students to better understand their college choices and policymakers to better evaluate the use of public dollars in higher education. These changes will help to close achievement gaps.
Create Fed-State Partnership
To both control the cost of college and provide additional support to help students from low-income backgrounds to close the financial aid gap, Congress should invest in a federal-state partnership that incents states to invest in need-based aid and in stabilizing or reducing the cost of college for these students.