Twenty three billion more. That's what it would cost taxpayers over the next 10 years to restore the federal Pell Grant to its purchasing power 40 years ago.
The early 1970's were the heyday of the Pell Grant, the federal program targeted to low-income students. But now the maximum Pell Grant of $5,500 is woefully insufficient in today's higher education market, having risen just $1,400 in the last 10 years. Even while the total program appropriation in FY 2012 was more than $41 billion, a relatively small 8 million undergraduates from low-income families received Federal Pell Grants with an average award of just $3,706. Fully 76 percent of the grant awards go to students whose families earn less than $30,000 a year.
To remedy this bleak situation, the Institute for College Access and Success advocates doubling the maximum Pell Grant award to $11,000. Their proposal will require the government to raise an additional $23 billion; accordingly, they have come up with a list of new revenue sources, such as levying a small tax on financial securities trades, increasing alcohol taxes, and eliminating certain tax deductions for college. Taking these steps would generate around $462 billion in additional revenue.
The ICAS's calculations indicate that the United States has more than sufficient resources to make college affordable to millions of students who cannot obtain degrees because college costs are out of reach. As such, it's conceivable that the Obama administration and Congress will trade middle-class tax breaks for more resources dedicated to low-income students. What the report fails to address, however, is that our politicians are slavishly devoted to the middle-class while low-income students and families have no political power. Unfortunately, well-meaning reports won't change that.