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For
decades, policymakers, researchers and journalists have relied on a single
metric to judge whether colleges are committed to serving low-income students:
the percentage of their students who receive Pell Grants. But while such data
are useful in comparing colleges based on their records of enrolling low-income
students, they don’t reveal anything about the schools’ commitments to making
college affordable for these individuals.

In
2008, Congress recognized the need for better information about how much money
low-income students are really paying at different colleges. As part of , the law governing federal
student-aid programs, lawmakers required colleges to report their average “net
price”—the average amount of money that students and their families must pay
after all grant and scholarship aid is deducted from the “list price.”

Congress
specified that colleges should report the net price broken down by income, but
only for first-time, full-time students who receive federal financial aid.
These data provide a reasonably clear picture of the financial hurdles that
low-income students face at individual campuses, and they open a window onto
how colleges are spending their institutional aid dollars.

Despite
the availability and value of net price data, however, some higher-education
experts continue to judge colleges based solely on how many Pell Grant
recipients they enroll. For example, in 2014, the
released a paper entitled that called on policymakers to
penalize colleges at which fewer than 17 percent of freshmen receive Pell
Grants.

Under
the proposal, colleges that fail to meet the 17 percent Pell threshold within
three years of the enactment of such a policy would lose access to
institution-based federal aid. “If there is to be a shared responsibility for
college access and success, then at some point the federal government should no
longer permit low-access institutions of higher education—or their affiliated
foundations—to take advantage of the tax code to receive tax-deductible
charitable donations or institutional campus-based aid,” the authors wrote.

In
a new report that ������Ƶ released yesterday, entitled “,” I argue
that while such an approach is well-intentioned in its efforts to push colleges
that have been “engines of inequality” to become more socioeconomically
diverse, it doesn’t go far enough. (The report was funded by , which is also among the
of The Hechinger Report.)

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because it would hold harmless wealthy colleges that enroll a large share of
low-income students but that charge them almost as much as their families earn
in a year. Institutions like ,
and the —all of which provide
merit aid to
than
of their
freshmen, while charging their lowest-income freshmen an of more
than $20,000 a year—would escape scot-free.

I
agree with Ed Trust that a federal solution is needed to push colleges to
become more socioeconomically diverse. But any such plan must also hold all
institutions accountable for making college affordable for low-income students.
Because if a college enrolls a large number of Pell Grant recipients but
doesn’t come close to meeting their remaining financial need, it may well be
setting these students up for failure.

In
the first two editions of Undermining Pell, published in
and 2014,
I proposed that the federal government take a carrot-and-stick approach to
address these issues.

The
carrot is to help schools that simply don’t have the resources to keep down net
prices for the low-income students they serve. The plan would offer that serve a substantial
share of Pell Grant recipients (more than 25 percent of the student body) and
graduate at least half of their students schoolwide—with the aim of having
these schools use the money to boost their institutional aid budgets and
therefore reduce net prices for the most financially needy students.

The
stick is for wealthier colleges that divert aid in hopes of “buying” more
affluent students to rise in the and increase their net revenues.
These schools—which tend to enroll a relatively small share of low-income
students but charge them high net prices—would be required to match at least a
share of the federal Pell dollars they receive.

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one possible approach to combating these problems.

More
recently, my colleagues and I at ������Ƶ offered another approach that is
far more ambitious in its scope. Our plan
would create a new federal-state partnership in which states would receive
formula funds from the federal government that they would have to match and
send to colleges that enroll (and serve well) a substantial share of low-income
students.

To
be eligible for such funds, states would be required to maintain—and encouraged
to increase—their investment in higher education. Colleges would be required to
enroll low-income students, charge only what students could afford, and show
evidence of positive outcomes. We would give colleges five years to increase
their socioeconomic diversity. Ultimately, low-income students would have to
make up at least 25 percent of the student body at participating colleges.

Our
proposal would eliminate unmet need for all students, limiting the price they
pay for college to their  (EFC), the amount the federal government determines a
family can afford to contribute toward their children’s education. Federal,
state and institutional funds would make up the difference between students’
EFC and the net price at the participating institution.

Both
the carrot-and-stick proposal and the federal-state partnership plan are aimed
at ending the and ensuring that colleges function as engines of opportunity
rather than perpetuators of inequality.

This story was produced by , a nonprofit,
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