In the movie "It’s a Wonderful Life,"George Bailey tries to keep the Bailey Savings and Loan afloat by pleading with his customers to understand how they are all connected: “You’re thinking of this place all wrong. As if I had the money back in a safe. The money’s not here. Your money’s in Joe’s house, right next to yours, and a hundred others.”
If I can be so bold as to channel Jimmy Stewart for a moment, I’d like our nation’s policy leaders to understand how financial aid is all connected. Cutting the Pell Grant for low-income students will cause strain to the Tennessee Promise scholarship and other similar scholarship programs across the country.
As the value of the Pell grant goes down, the cost of a last-dollar scholarship (like Tennessee Promise) equally goes up. For example, if a student’s Pell grant goes down by $100, their Tennessee Promise scholarship goes up by $100. This means that more students will be tapping into the Promise fund. Original calculations of how many students would be eligible for scholarship dollars will need to be adjusted as more and more students become eligible.
The Pell Grant is a federal grant that gives low-income students the opportunity to attend college. The Congressional Budget Office predicts the Pell Grants will help over 7.5 million students continue their education after high school this year. The Institute for College Access and Success, or TICAS, points out that Pell now covers less than 30 percent of the cost of attendance for an undergraduate college — its lowest purchasing power in 40 years.
Without action from the United States Congress, Pell will no longer rise with inflation. This will make the award weaker. The current House budget recommendation is to keep Pell funding flat for the next 10 years. This, in essence, is a cut.
The buying power of Pell will continue to recede over time. In 10 years, TICAS predicts the grant will cover only one-fifth of college costs. This change means fewer students will be able to afford earning a bachelor’s degree at a four-year college, resulting in more students enrolling in community colleges, in turn, resulting in more students leveraging Promise dollars.
More scholarships will need to be offered, and the average cost of those scholarships will need to increase. The result will strain Promise resources and, quite possibly, the Promise reserve fund.
This means that not only will low-income families be affected by cutting Pell, but middle income families that rely on Tennessee Promise and similar scholarships will eventually be affected. Regardless of what anyone thinks about the cost of higher education (and I could write a thousand additional words on the fairness of higher education affordability) the fact of the matter is opportunity for economic security is directly linked to having a college degree or certificate.
Higher education gives everyone an opportunity. When we limit opportunities, we limit our citizens from being able to contribute to the greater good of our community and country.
Congress should continue to show their bipartisan support of students (as they always have) and continue to allow the Pell Grant to adjust based on inflation. As George Bailey says in his closing argument defending the old Savings and Loan, “Now, we can get through this thing all right. We've got to stick together, though. We've got to have faith in each other.”
This op-ed was authored by Bob Obrohta, Executive Director of the Tennessee College Access and Success Network, and was originally published in the Tennessean on August 17, 2017.