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33% of federal financial aid goes to negative ROI degrees


Senate Democrats want to increase Pell Grants

One in three federal financial aid dollars goes to programs that have a negative return on investment, according to a recent report.

At the same time, Senate Democrats are hoping to boost spending on higher education during the latest budget battle.

“Around a third of federal Pell Grant and student loan funding pays for programs that do not provide students with a return on investment,” Preston Cooper wrote in a Foundation for Research on Equal Opportunity report. He provided further comments to The College Fix via email.

He told The Fix, “that any increase in the Pell Grant [should] be tied to the outcomes of the program it funds.”

“Under this proposal, students would be eligible for a larger Pell Grant if they enroll in a program that has a track record of generating high earnings for graduates, at a reasonable level of tuition,” Cooper said. “This plan would be fully paid for by clawing back student loan subsidies from colleges.”

Federal lawmakers can set guidelines on Pell Grants to punish colleges that regularly provide a negative return on investment, Cooper said.

“Congress should consider limiting or eliminating colleges’ ability to use Pell Grants if the data consistently show that students who attend those schools do not earn a sufficient income after leaving school,” he said.

“Students would then be incentivized to choose a school or program with a higher ROI in order to keep their Pell Grants,” Cooper told The Fix.

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However, almost half of the Senate wants to see Pell funds increased.

More than 40 Senate Democrats and left-leaning independent Senators signed a letter in May calling for a pending appropriations bill to increase Pell Grant funding.

“We respectfully request you provide a discretionary increase to the award as Congress works toward doubling the Pell Grant for students,” the letter to the Democratic and Republican leaders on an appropriations subcommittee stated. The current Pell Grant maximum is $7,395.

The Fix contacted Senator Bernie Sanders, the chair of the US. Senate Committee on Health, Education, Labor, & Pensions, for comment on the letter and the report from Preston Cooper. His office did not respond.

The office of Republican Senator Bill Cassidy, the ranking member of the Senate Education committee, wrote “interesting” in response to the media inquiry, but did not provide any further comment.

Cooper, with the Foundation for Research and Equal Opportunity, says while return on investment is not the only consideration, “no prospective student should ignore” it when picking a school.

“The choice to attend college is arguably less important than choosing which school to attend and which subject to study,” he wrote in the conclusion of his report. “Some programs leave students worse off financially than they would have been had they not gone to college at all.”

Editor’s note: The article has been updated to clarify Sen. Cassidy’s office provided a short response, not Sen. Sanders.

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About the Author
College Fix contributor Jack Wascovich is an incoming student at The Ohio State University. He plans to major in architecture.