The single largest item in federal education appropriations for 2012 is the Pell Grant Program, with a cost of 22.8 million dollars, or one-third of total education appropriations. Although the Pell Grant funds are slightly down from last year, they still make up a sizeable amount of money. This is also a fairly recent area for federal spending, since the grant did not exist as recently as when I started college.
In 1972, Congress made new provisions for subsidizing low-income students in postsecondary schooling when it introduced Basic Educational Opportunity Grant, which became known as Pell Grants after Rhode Island Senator Claiborne Pell, who was the primary sponsor of the legislation. Unlike the federal loans that have also come into existence in the effort to put more Americans through higher education, these grants have been free money, requiring no repayment and no particular academic preparedness or ability. The numbers of low-income students receiving Pell Grant money grew from 176,000 in the 1973-1974 academic year to 5,428,000 in 2007-2008, according to Jackson Toby in The Lowering of Higher Education in America: Why Financial Aid Should Be Based on Student Performance.
As Jackson Toby argues in this excellent book, distributing financial aid on the basis of need alone, without consideration of ability or achievement, lowers the quality of higher education by promoting the enrollment of less-prepared students who tend to lower the intellectual environments and the standards of colleges. In addition, I argue in my article “The Mass Production of Credentials: Subsidies and the Rise of the Higher Education Industry” that the federal subsidization of students in higher education contributes to rising tuition costs. By trying to engineer upward mobility for everyone, moreover, federal subsidies simply intensify the competition among students to distinguish themselves by attending the most prestigious possible institutions, while creating shortages at the lower rungs of the socioeconomic ladder.
Our current massive budget deficit requires us to look closely at every program. Perhaps it is time to question the wisdom of the federal education budget’s biggest expense.