Dear Colleagues:

One of the myths about higher education that has persisted, most recently in an editorial by The Wall Street Journal, is the notion that increasing federal financial aid drives up the cost of college.  While this theory, also known as the Bennet hypothesis, has been debunked by many higher education economists and by federal studies conducted by three previous presidential administrations, it is a topic we are forced to continue addressing.  And, I know many of you have had to try and set the record straight on this issue with your elected officials as well. 

Now, thanks to a recent op-ed authored by David H. Feldman, professor of economics at William & Mary (VA), and Donald E. Heller, retired provost and vice president of academic affairs and professor of education at the University of San Francisco (CA), and published in Politico, we have more evidence to debunk this theory.

As Feldman and Heller unequivocally state in their piece, “Studies that we and other researchers have conducted have shown that student aid, and especially the federal Pell Grant program, is not responsible for the long pattern of tuition increases over the past 50 years.”

They go on to write, “But for the 95 percent of students attending mission-driven not-for-profit colleges, and public universities whose tuition is often set by state boards, there is no substantive evidence that federal aid increases the tuition prices they pay.”

Feldman and Heller also make a persuasive argument for doubling the Pell Grant maximum award.  Increasing Pell, they write, would “help improve completion rates” and “will improve graduation rates by decreasing financial insecurity among low-income recipients and helping more students attend full time.”

Importantly, they also correctly note that the Pell Grant is a “bipartisan success story” that enjoys widespread political support on both sides of the aisle and that reaches into every congressional district in the country.  

This op-ed is so important for our advocacy work.  It is full of links to research debunking the Bennet hypothesis and supporting the need to increase the Pell Grant. I hope you will spend a few minutes to read the piece and the underlying research they use to support their conclusions.  If you came to our annual meeting this year, you may have attended the session where Feldman and Heller eloquently discussed the past and future of the Pell Grant.  They are both important national voices on the economics of higher education.  

This was a quiet week in Washington for issues related to higher education policy.  This week’s issue of Washington Update includes a story highlighting new grant opportunities for Native American-Serving Nontribal Institutions to support improving and expanding capacity to serve Native Americans and low-income students. 
 
Soundbites

• The Department of Education announced that it intends to strengthen existing regulations that protect students with disabilities from discrimination. Specifically, the Department is planning to amend the regulations governing section 504 of the Rehabilitation Act of 1973, a federal law that prohibits disability discrimination in federally-funded education programs or activities. The agency specifically noted that revised regulations may address the mental health needs of students with disabilities. The Department is currently soliciting public feedback regarding regulatory changes and plans to hold several listening sessions in the coming months. Interested parties may submit comments to the Department. 

• The top Republicans on the House and Senate education committees – Rep. Virginia Foxx (R-NC) and Sen. Richard Burr (R-NC) – sent a letter to the Department of Education questioning the agency after the Department acknowledged that it had shared information about student aid applicants with Facebook. The information being collected was drawn from the agency’s website when users were filling out their Free Application for Federal Student Aid (FAFSA). Concerned about potential privacy violations, the lawmakers are seeking answers about what information was disclosed, the period of time during which data was collected, whether the disclosures were intentional, and more.

• Researchers from the Urban Institute released a report examining New York State’s free college program, the Excelsior Scholarship. Using data from the program’s 2018 cohort, the Urban Institute found that “most of the benefit goes to families earning more than the median state and New York City–wide income. Additionally, only about 25 percent of eligible students take up the Excelsior Scholarship, and only slightly more than half of Excelsior students renew the scholarship for a second year.”  Their findings also show that “eligible Black and Hispanic students are about 10 percentage points less likely to receive the scholarship compared with eligible white and Asian students.”  As a reminder, the Excelsior programs requires that students be enrolled full-time, and after college, recipients must live and work exclusively in state for as many years as they received the award.  If they do not, the grant becomes a loan.

 

“Increasing the size of the maximum Pell Grants is the most powerful and targeted tool we have for making college more affordable for families of modest means. This should be a bipartisan priority for America’s future.”

David H. Feldman, professor of economics at William & Mary (VA), and Donald E. Heller, retired provost and vice president of academic affairs and professor of education at the University of San Francisco (CA), in an op-ed published in Politico on May 9, 2022 .

Regards,

Barbara

Barbara K. Mistick, D.M.
President, NAICU