Saturday, June 13, 2015

Pell Grant Changes, Are They Enough to Save Taxpayer's Money?

Before July 1, 2012:
Students may receive Pell Grant to a maximum of 180 semester units, allowing 7.5 Schedule Awards by taking their time with 12 semester unit each semester for 15 semesters.

Starting July 1, 2012:
Students may receive Pell Grant a maximum of 6 Schedule Awards, where each schedule award consist of two full-time semesters or the equivalent in other system. Students that go 15 units in one semester and 9 units in the second semester does not complete 100% of a schedule award since 15 units > 12 units so  the first semester is full time (50% schedule award), but the second semester is 9 units < 12 units, so it is pro-rated as 3/4 time (37.5% schedule award) for a total of 87.5% schedule award even though the student completes 24 semester units in the academic year.

With six schedule awards, the minimum number of units is 144 while the maximum depends upon the work load the student is willing to take. If a student takes 15 semester units every semester, then in 6 years, they will complete 180 semester units. If a student takes 20 semester units every semester, then in 6 years, they will complete 240 semester units. It would be good luck for students that could find an institution that does not charge by the unit and does not have a low unit cap per semester.

This Dutch 1996 Reform Should be a Good Example of Cutting Down

According to Does reducing student support affect scholastic performance? Evidence from a Dutch reform, Belot, Canton, and Webbink found that decreasing government support for excessive years helps students stay in their major, and achieve higher grades without any changes to their average studying or working hours per week. So the question is, should we cut down Pell Grant to 5 Schedule Awards since (5 years * 2 semester * 12 units per semester = minimum 120 units) and (5 years * 2 semester * 18 units per semester (typical unit cap) = typical cap 180 units) or (5 years * 2 semester * 21 units per semester (high unit cap) = 210 units)?

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