Friday, February 17, 2012

Focus on Pell

The National Association of Independent Colleges and Universities has released a new report highlighting the use of federal student financial aid by states and congressional districts.  It is fairly obviously intended to make the point that campus-based aid-- which President Obama is trying to leverage to hold colleges and universities responsible for rising tuition and fees-- is a tiny amount of money.  I think it does that quite effectively. But what it also highlights is how important the federal Pell Grant is to state and local economies.

Let's take Wisconsin, for example.  In 2010-2011, just over 130,000 Wisconsin students received Pell Grants, valued at over $454 million. In contrast, campus-based programs (the SEOG and work-study) distributed funds to just over 35,000 students to the tune of about $34 million.

The contribution of federal student aid to congressional districts is sizable, but the relative contribution of campus-based programs is generally small. For example, in Paul Ryan's district, the Pell Grant contributes $36 million, while campus-based programs add just $2 million.  In Sean Duffy's district, the Pell contributes $45 million, and campus-based programs barely $3.2 million.  Of course, where there are more colleges and universities, districts benefit much more from campus-based programs.  Tammy Baldwin's district (which includes UW-Madison), receives $104 million from Pell, and just under $10 million from campus-based programs.

The variation in the contribution of campus-based aid dollars to economies in congressional districts illustrates the challenges Obama faces in getting his proposal passed.  In contrast, the widespread distribution of Pell dollars throughout congressional districts shows us why, generally speaking, the Pell is likely to survive for quite some time.  It also makes one wonder why Congress doesn't do more to focus on Pell, and even increase spending, especially given that Pell dollars clearly contribute to state economies-- both directly, and indirectly via increased human capital. 

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