Pell Grants: Billions for Schools, but No Graduating Students

Pell Grants were designed in a way to leave us in the dark about whether the money was being spent wisely.

I recently posted about how student welfare for graduate students—welfare in the form of loans that no one is going to repay other than the taxpayer—is really a form of corporate welfare for Universities. But here is a much bigger example of how the government has been scamming us for years and is only just now being exposed. NBC News reports, “Pell Grants: Billions Go to Students Who Don’t Graduate, Analysis Finds.”

Billions of taxpayer dollars go to college students who never end up with a diploma in their hands, a new report found.

Pell grants — which are given to low-income families and, unlike student loans, do not need to be paid back — are the costliest education initiative in the nation. But little official data exists on whether they are a good investment, according to the education watchdog Hechinger Report.

Education Department Undersecretary Ted Mitchell last month lauded Pell grants as “one of the key levers that we have” to increase college completion rates. But an analysis published Monday by Hechinger revealed that Pell recipient graduation rates are often considerably lower than the overall graduation rate — even six years after a student starts college.

To make matters worse, the government keeps no official tally of what proportion of those who receive the grants end up getting degrees — despite the fact that money spent on Pell grants has quadrupled since 2000.

“There’s two scandals here. We have spent over the last decade one quarter of a trillion dollars on Pell grants, and if you ask the federal government what percentage of those kids graduate from college, they can’t tell you,” said Richard Vedder, director of the non-profit Center for College Affordability and Productivity. “The second scandal is as far as we can estimate, that graduation rate is embarrassingly low.”

I will make one possible excuse for this result. If people go to college on a Pell Grant, and in the process of expanding their abilities, find an employer who wants to hire them without a degree, then it is arguable the Pell Grant has done what it should be designed to do: produce a success in the economy. (Whether the price is worth it, or if taking money from taxpayers for this purpose is ethical, are separate considerations.)

But the powers that be that have pushed the Pell Grants have also claimed that the purpose was to allow students to graduate with degrees. Why would they establish a program for such a purpose and then never bother to determine if the program is succeeding in that purpose?

Because the real purpose was not to produce more graduates. The real purpose was to pass more money into the College/University system. It was never about helping students. It was corporate welfare and economic “stimulus.”