Breaking Down the PROSPER Act: "One Grant"
Thursday, December 7, 2017
Posted by: Carrie Warick, Director of Policy and Advocacy
This is the second installment in NCAN's blog series on various proposals contained in the Promoting Real Opportunity, Success, and Prosperity through Education Reform Act, or PROSPER Act. The bill, introduced last week by House Education and the Workforce Committee Chairwoman Virginia Foxx (R-NC), would reauthorize the Higher Education Act by streamlining the federal financial aid system, expanding the programs eligible to participate in it with a focus on workforce development, and reducing regulations.
The PROSPER Act makes the Pell Grant the only federal need-based grant and eliminates the Supplemental Educational Opportunity Grant (SEOG). The Pell Grant maximum award would remain at $5920 through 2024, and summer Pell would remain part of the program.
Students who take 15 credits a semester during the traditional academic year would be eligible for a $300 bonus, but those using the grants in the summer would not be eligible for a bonus during that time.
Students would be required to participate in annual counseling and receive an annual update of the their estimated remaining Pell award eligibility. Students who receive Pell awards for three consecutive semesters without earning any credit hours (or equivalent) would not be able to receive additional Pell Grants.
Pell Grants would be distributed on a weekly or monthly basis at the discretion of the institution, with payments being roughly equal. However, an exception would allow for the upfront payment to be larger to cover immediate expenses such as tuition.
While NCAN has supported streamlining the federal financial aid programs previously, this streamlining must be done in a way that does not shrink the overall federal financial aid pie. Eliminating SEOG without at the very least allowing the Pell Grant to resume its automatic increases will create gaps in the financial aid packages of students over time. Without extending these adjustments, students can expect the value of a Pell Grant to cover only 23 percent of the cost of a four-year public education in 2024, down from 29 percent today.
While a Pell Grant bonus is the best way for the federal government to incent completion within the Pell Grant program, it is important to note that many low-income students choose to take 12 credits due to family or work obligations. The amount of this bonus will help students attending in a traditional pattern, but is unlikely to be enough to convince post-traditional students to forgo additional work hours to take another class.
The ”Aid Like a Paycheck” concept requires additional research before implementation. However, should it be implemented, this bill should at least clarify that the “unequal” upfront payment should include upfront costs such as books and materials so that students are fully prepared to learn on the first day of class.
“The Pell Grant’s value is the deciding factor on whether a low-income student will attend college,” says Maria Carvalho, director of high school and postsecondary operations at The College Crusade of Rhode Island and the winner of NCAN’s 2017 College Access Practitioner Award of Excellence. “The freeze on a Pell increase would force students to rely increasingly on the 'one loan' and would increase overall lending for low-income students.”
“We are pleased to see the proposal around a Pell Grant bonus,” said Traci Kirtley, chief program officer at College Possible. “This is exactly the kind of wise use of funding we believe can help encourage students to make choices that we know are more likely to lead to success.”
More on the PROSPER Act
NCAN Members Urge Further Examination of HEA Proposals
Breaking Down the PROSPER Act: "One Work-Study"
Breaking Down the PROSPER Act: Consumer Information & FAFSA Simplification
Breaking Down the PROSPER Act: "One Loan"