(CNSNews.com) - President Barack Obama’s college reform plan, released by the White House on Thursday, would encourage colleges to discriminate against applicants who come from families with total incomes of $60,000 or more by awarding colleges higher federal ratings and increased federal aid for admitting a higher “percentage” of students who receive federal Pell Grants, which the Department of Education says are for "low-income" students.
According to a study by the Congressional Research Service, in the 2007-2008 school year, only 2.3 percent of undergraduates who were still dependent on their parents, and whose total family income was $60,000 or more, received Federal Pell Grants.
According to the College Board, in the 2010-2011 school year, only 5 percent of all Pell Grants were distributed to dependent students whose total family income was $60,000 or more.
Colleges that admit and graduate a higher “percentage” of students on Pell Grants--as the Obama plan would encourage them to do--will necessarily admit and graduate a lower percentage of students who are not on Pell Grants.
A college that based its admissions policies solely on the merit of the individual applicant--and did not consider the applicant’s family income or eligibility for a Pell Grant in deciding whether to offer the applicant a place at the school--could be penalized under the Obama plan with less federal aid for itself and for its students if its merit-only admissions policy resulted in a student body with a lower percentage of Pell Grant recipients than other schools.
The Obama plan also would reward colleges for having higher overall graduation "rates" and for graduating a higher "number" of students on Pell Grants--which could provide colleges with an incentive to lower the academic standards for earning a diploma.
"The Federal Pell Grant Program provides need-based grants to low-income undergraduate and certain postbaccalaureate students to promote access to postsecondary education," says the Department of Education. "A Federal Pell Grant, unlike a loan, does not have to be repaid."
“In FY 2009,” the CRS reported, “an estimated 76 percent of all Pell Grant recipients had a total family income at or below $30,000.”
If a family of three included a father and a mother, who both worked 40 hours a week for the minimum federal wage of $7.25 an hour, and an 18-year-old son going off to college who did not work a single hour the entire year, the total annual income of that family would be $30,160. That would put them slightly above the income level of three-quarters of Federal Pell Grant recipients.
The fact sheet released by the White House on President Obama’s college-reform plan says Obama wants to establish a federal rating system for colleges and then tie federal aid to colleges to that rating system. The fact sheet lists as the first criteria Obama wants to use in rating colleges the “percentage of students receiving Pell Grants.”
The fact sheet also says Obama wants “to give colleges a bonus based on the number of Pell students they graduate.”
“His plan will measure college performance through a new rating system so students and families have the information to select schools that provide the best value,” say the White House fact sheet. “And after this ratings system is well established, Congress can tie federal student aid to college performance so that students maximize their federal aid at institutions providing the best value.”
“These ratings will compare colleges with similar missions and identify colleges that do the most to help students from disadvantaged backgrounds as well as colleges that are improving their performance,” says the Fact Sheet.
“The Department [of Education] will develop these ratings through public hearings around the country to gather input of students and parents, state leaders, college presidents, and others with ideas on how to publish excellent ratings that put a fundamental premium on measuring value and ensure that access for those with economic or other disadvantages are encouraged, not discouraged,” says the fact sheet.
“These ratings will be based upon such measures as: Access, such as percentage of students receiving Pell grants; affordability, such as average tuition, scholarships, and loan debt; and outcomes, such as graduation and transfer rates, graduate earnings, and advanced degrees of college graduates.”
President Obama’s plan would give more federal money to the student and to the school he or she attends if that school scores highly on the new government rating system that will be based in part on the percentage of Pell Grant students enrolled and graduated.
“The Administration will seek legislation using this new rating system to transform the way federal aid is awarded to colleges once the ratings are well developed,” says the Fact Sheet. “Students attending high-performing colleges would receive larger Pell Grants and more affordable student loans.”
“To encourage colleges to enroll and graduate low- and moderate-income students, the president will propose legislation to give colleges a bonus based upon the number of Pell Grant students they graduate.”