Dropout Grants

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With President Obama’s budget proposal (pdf) for fiscal year (FY) 2010 moving forward, academics are lining up to suggest areas in higher education which could get more funding.

“That’s why…we will provide the support necessary for all young Americans to complete college and meet a new goal: by 2020, America will once again have the highest proportion of college graduates in the world,” said President Barack Obama on February 23, when addressing Congress.

California’s State University system Chancellor, Charles B. Reed, has his own suggestion on how to boost graduation rates.

“Now, I’d like to see the Obama Administration take a look at funding institutions for the first time in higher education, sort of like Title I where you look at the economics of the student profiles that you serve, and this would be mostly Title I type students who go on to college—they become our Pell students—and see if they can reward and incentivize institutions to serve these students successfully,” Reed told the Chronicle of Higher Education’s Senior Editor Sara Hebel this March.

When asked by Hebel how much this would cost, Reed answered “A lot of money,” and that last year “We estimated that it would cost 12 to 14 billion dollars.”

This, he argues, would help universities and colleges serving low-income and minority students to offer “remedial education,” student support services, and “help these students all the way along to retain them in college and to graduate them.”

The key to Reed’s proposal is to “provide institutional aid to higher education for the first time.” In other words, Reed would like financial-aid dollars to be delinked from these students and provided directly to schools.

This could decrease choice for low-income students by preferring those institutions with pre-existing high ratios of Pell recipients over schools with lower ratios.

And, as a 2004 study by The Pell Institute for the Study of Opportunity in Higher Education found, those higher ed institutions, both public and private, which serve larger ratios of Pell Grant recipients, also have considerably lower graduation rates.

They wrote, “In the quintile of private institutions with the lowest share of Pell Grant recipients…the average six-year institutional graduate rate is 77 percent” as opposed to 41 percent among the private institutions serving the “highest share of Pell Grant recipients.”

Among public higher education institutions, those colleges and universities serving the lowest ratio of Pell Grant students were found to graduate 57 percent of their students in six years.

In contrast, those public institutions serving the highest share of Pell Grant students graduated only 43 percent of their students over six years.

Bethany Stotts is a staff writer at Accuracy in Academia.