Most Pell Students 'Degreeless' After 6 Years

• By Dian Schaffhauser
• 05/16/18

A new analysis of federal graduation rates among first-time, full-time Pell students in four-year institutions found that most schools are doing a crummy job of serving them. In fact, as the researchers wrote, "Low- and moderate-income students starting college for the first time currently have no better than a 50:50 shot of actually earning their degrees within six years of enrollment." Of 1,566 four-year schools included in the research, just 47 percent graduated at least half of their Pell students within six years, compared to 65 percent graduating non-Pell students in the same timeframe.

At for-profit institutions, the news is even worse. Only one in five students graduates within six years — an outcome nearly 30 percentage points lower than the national average of all four-year institutions. What's more, for-profit schools have a higher concentration of Pell recipients; two thirds of students within those colleges receive Pell grants, "a disconcerting number given their track record in serving this population miserably," the researchers stated.

The research project was undertaken by national think tank Third Way, which "champions" a center-left perspective. "The Pell Divide: How Four-Year Institutions are Failing to Graduate Low- and Moderate-Income Students" relied on data from the U.S. Department of Education's Integrated Postsecondary Education Data System (IPEDS), released in October 2017. This was the first time, according to Third Way, that the government had relevant data on graduation rates of first-time, full-time Pell recipients.

The Pell graduation rate by type of institution. From "The Pell Divide: How Four-Year Institutions are Failing to Graduate Low- and Moderate-Income Students" published by Third Way

The report pointed out that some schools are beating the odds. Overall, 48 institutions graduate two-thirds or more of their Pell students, such as the University of California-Riverside. Even though 57 percent of the university's first-time, full-time students received Pell Grants, it had a Pell graduation rate of 73 percent — "far above the national average." Another noteworthy school: Grace University, a small, private, nonprofit institution in Nebraska, which boasted "an above-average graduation rate" of 55 percent in a first-time, full-time Pell cohort of 100 percent. In spite of that success, however, recently the university announced that it would be closing at the end of the current academic year. Among for-profits, Monroe College, with several locations around New York City, stood out, with a graduation rate among Pell recipients of 73 percent. As the researchers noted, "These institutions are committed to admitting an above-average share of Pell students and equally committed to helping them succeed."

Yet, many Pell students lack access to the schools that could provide them with "true opportunity," the report suggested. The researchers found seven states that had no Pell-serving institution with a graduation rate greater than 50 percent: Louisiana, Alabama, Colorado, Wyoming, New Hampshire, Rhode Island and Connecticut. In other states, access varied widely. While Texas had just four Pell-serving institutions with that success rate, California had 37.

The report advised Congress to create a designation, "Pell-Serving Institutions," or PSIs, for institutions enrolling greater shares of Pell students as well as higher graduation rates, making them eligible for "additional resources and support" to improve the outcomes of those students. Likewise, the organization suggested incentives to reduce the Pell gaps within colleges and universities that are demonstrating progress in helping low- and moderate-income students succeed.

Other recommendations: requiring institutions to pay back Pell grants when they fail to get good outcomes for their Pell students; and incentivizing higher-performing schools to accept more low-income students as well as punishing those schools that appear to be unwilling to educate these students.

"Until Congress puts in place additional accountability measures, institutions with abysmal Pell graduation rates and yawning gaps will continue to receive massive taxpayer investment with no incentive to improve," the researchers concluded. "We know that it is possible to succeed with Pell students, which is why our policies must find ways to reward and scale up programs that have proven results with this population."

Third Way intends to produce a follow-up report covering two-year and certificate-granting schools, based on data on graduation rates for part-time and transfer Pell students that will released in fall 2018.

The current report is openly available on the Third Way website.