Larger Pell Grants could lower college tuition

President-elect Joe Biden’s higher-education agenda is ambitious. When elements of his plan come before Congress, they will inevitably run into competition from other needs: COVID-19 stimulus, infrastructure spending, health care and much more.

So here’s a scaled-down proposal — one that could make higher education more affordable to students, strengthen a particularly admirable group of colleges and reduce future student debt.

In this era of $70,000 prices for tuition, room and board at elite colleges, the United States still has an array of colleges that cost much, much less. There are very-low-cost colleges where a student can get a degree for an eighth the price of an Ivy League college. Many are excellent.

An example is the City University of New York, CUNY. Its 11 four-year campuses still charge tuition just under $7,000 per year, plus a few hundred dollars in fees. This is an amazing bargain, and in 2017 a study led by economics professor Raj Chetty, then at Stanford, found that six CUNY campuses were among the top 10 colleges nationwide in moving students higher in lifetime income.

But CUNY isn’t the only excellent college at a low price. Miami’s Florida International University charges less than $7,000 per year for tuition and fees for an in-state student. And Florida has at least half a dozen other four-year state colleges at that price or lower. The biggest bargains of all are those that began as two-year campuses. For some years, Florida’s community colleges have been accredited to offer bachelor’s degrees as well as associate’s degrees. (Why don’t more states do this?) Miami

Dade College offers its bachelor’s programs at in-state tuition and fees of under $3,000 a year.

These colleges are not alone: Texas is full of low-cost colleges, and California’s Cal State system still puts tuition and fees around $7,000 per year. Many Historically Black, Hispanic-serving and minority-serving institutions across the nation also offer lower tuition.

Of course there are exceptions; there doesn’t seem to be much of a political price to pay for high-cost state colleges. No student in Illinois, for example, gets such a bargain. Tuition and fees this year for a liberal arts and sciences student at University of Illinois at Chicago are $15,458, more than twice the cost of CUNY. Virginia’s James Madison University, typical of the cost of the state’s four-year colleges, costs about $12,500 this academic year. That’s a bargain compared to private colleges, but it’s far above the cost of a Cal State.

Here is the modest proposal: Biden’s campaign website promises to double the maximum size of a Pell Grant (after offering everyone free community college). If this is unaffordable or foiled by political opposition, why not increase the Pell Grant by 50% for students attending one of the lowest-priced 15% of public colleges in the United States? To be eligible, the colleges would also have to achieve, say, a 35% graduation rate (schools with a large number of low-income students tend to have lower graduation rates, and at some of the colleges I have named, graduation rates are much higher). In addition, give the same Pell Grant increase to the lowest-priced 15 percent of private colleges. Private colleges have to price themselves somewhat higher than state colleges since they receive no state funds. But the lowest-cost of these institutions deserve support when they have strong graduation rates.

A maximum Pell Grant this year is $6,345. Increase it by half and it’s $9,518, enough to pay tuition and fees at a college such as CUNY, and leave some money to pay for books and transportation. Some students at such low-cost colleges pay room and board, but others live and eat at home.

Increasing a Pell Grant by $3,172 wouldn’t make much difference for a student who wants to go to Harvard. But it makes a huge difference for a student at Florida International or a similarly priced college.

Such a change would lead to an increase in applications to these colleges. Almost all these schools have capacity to spare (though the Cal States do not). They would receive a welcome infusion of money, badly needed because states traditionally don’t lavish money on their lowcost campuses. More students would be given an incentive to enroll at low-cost, good-quality campuses; they’d graduate with lower debt.

Better still, colleges priced just a bit above the lowest cost would have an incentive to reduce the price of tuition if they could do it. Finally, a reason to lower tuition.

There’s at least one clear thing Americans want from their institutions of higher education: a high-quality education at a fair price. There are already colleges — lots of them — providing that. Let’s help those colleges and the students who might enroll there.