# News Are pell grants 'welfare'?

1. Jul 31, 2011

### SixNein

Last edited by a moderator: Apr 26, 2017
2. Jul 31, 2011

### Pythagorean

I see the grant as an investment capable of future returns, but then again, so is welfare, if it's managed properly.

Some investments are higher risk than others, of course.

3. Jul 31, 2011

### SixNein

I look at the pell grant in much of the same light, but they paint a picture of pell grants subsidizing only lazy students trying to avoid getting a job. Maybe the system is abused by some, but I still think its a good program. Perhaps I just don't understand people who call themselves conservatives. I certainly don't understand many of the people who commented on the article.

4. Jul 31, 2011

### talk2glenn

Pell Grants are awarded solely on need, and not merit. The drop-out rate amongst Pell Grant recipients in the United States is approximately 50%, the major-choice is predominantly liberals arts, and grades are about 20% below the class average.

By every metric, Pell Grants strike me as a terrific waste of money, not an investment. They contribute grossly to college price inflation and degree value deflation, in that they provide an incentive for students who otherwise would not attend to "try their luck".

The nation would be significantly better off if it got out of the business of financing college education altogether. At best, the government should retain the subsidized student loan business. Remaining aid should be handed out by the institutions, according to their own policies on need and merit. In any event, there are signs that the market will fix itself, if the government won't intervene. The government has traditionally responded to runaway tuition inflation by increasing the flow of free-money into the demand market. When austerity forces the government to tighten the purse strings - even a little bit - I expect a dramatic reversion to the mean.

EDIT: It's worse than I thought. According to one article I just looked up on Forbes, the estimated 4-year Pell grant graduation rate at University of Chicago is "about 2 to 3 percent". http://blogs.forbes.com/ccap/2011/03/07/for-whom-the-pell-tolls/

5. Jul 31, 2011

### Newai

talk2glenn, is that 50% evenly distributed over the country, or are there parts where some people are making good use of it?

6. Jul 31, 2011

### Pengwuino

I see them less as welfare and more of simple subsidies.

As far as abuse goes, yes, they are abused like mad. I don't know a single person who is on that form of financial aid that actually 1) uses it responsible or 2) does well in school. I knew some girl who, the second she got her financial aid last semester, bought a new $2000 Mac when she already had a laptop. She also apparently isn't going to bother graduating and is now going to go to a community college and join a pre-nursing program to later go into another nursing program. So, well done tax payer,$100k out the window.

EDIT: I take that back. I don't know anyone under the age of 25 or so that doesn't abuse financial aid. People that are older and those who are under the GI Bill and things of that nature tend to really want to graduate and do well. Obviously, the older you are, the less appealing screwing around in school for years upon end becomes.

Last edited: Jul 31, 2011
7. Jul 31, 2011

### drankin

PELL grants are welfare. Just had to put my 2 cents in there.

8. Jul 31, 2011

### QuarkCharmer

I received the Pell Grant as my income the prior year to filing my financial aid was all non taxable, which still makes me eligible. In any case, I banked the few thousand dollars and now I am using it for additional courses not under my degree program so my normal aid will not pay.

I don't think that anything I did was wrong. Granted, I am extremely surprised that there were no stipulations on what I can use it on. At least, no checkable stipulations, the school simply forwarded the money along to me. I know for certain that many people are completely wasting this money.

9. Jul 31, 2011

### Pengwuino

Better than the guy I knew who was getting a \$5k/semester housing allowance (I forget through which financial aid type) but was actually living at home. He just flat out lied.

The really silly thing is how different universities and the government acts when it comes to enforcing any responsibility. Whenever I would go to conferences, I had to provide receipts of everything including the food I ate and had a strict limit on how much I could spend on housing. With people on financial aid, they just throw money at them.

10. Jul 31, 2011

### talk2glenn

Don't get me wrong; there are always useful exceptions. I myself never qualified for Pell grants undergrad (I had very little income, but it was all capital gains, which excepts me), but there are some quality students who do. I suspect people like you, though, would qualify for other institutional and private aid in the absence of the grants.

That ~50% is my best educated guess, given stats on graduation rates, academic performance of Pell Grant recipients, and proportional Grant population. Nationwide average. Unfortunately, to my knoweldge the government doesn't collect and publish graduation rate data for Grant recipients (deliberately, I suspect), so its an estimation game.

11. Jul 31, 2011

### Newai

Like this? http://nces.ed.gov/pubsearch/pubsinfo.asp?pubid=2009156
"This report describes characteristics of college graduates who received Pell Grants and compares them to graduates who were not Pell Grant recipients."

This site summarizes the report: http://www.insidehighered.com/news/2009/07/22/pell

12. Jul 31, 2011

### SixNein

The undergraduate major is also very close between the two groups.

I would point out an interesting statistic:
Pell grant recipients borrowed more money in student loans: 18.5k pell vs 17k non-pell.
And were more likely to borrow money 86.8% vs 47.1%.

And obviously, were more likely to be financially independent.

13. Jul 31, 2011

### talk2glenn

Exactly like that. You'll note that the governments report only examines the academic performance of Pell Grant recipients who graduated. Even amongst the graduating peerage of Grant students, we observe anemic performance. It wasn't in the report, but I suspect this weak showing comes despite disproportionate Grant population in low-tier schools and degree programs. The whole thing is a mess, but my favorite finding:

So despite generally weak academic performance, Pell Grant recipients are more likely than their peers to want to continue their schooling beyond undergrad. Perhaps because they aren't used to having to pay for it, and want the free ride to continue :)

14. Jul 31, 2011

### Staff: Mentor

You don't understand how someone could get upset about adding spending to a bill supposedly designed to cut it? Really?
I'm not seeing that in the link. Could you post the quote, please.
Agreed; There is nothing conservative about social programs. Conservatives believe that people should do for themselves because it promotes the comptetitiveness required for a functional capitalist economy. More to the point, even if the cause is good, this is not one of the traditional functions of our government and good causes still cost money at a time when we don't have extra money to spend.

15. Jul 31, 2011

### khemist

Certainly people abuse Pell grants, but anything with monetary value will be abused.

16. Jul 31, 2011

### Staff: Mentor

There is nothing wrong with taking a gift someone offers you. Any fault for flaws lies in the person/entity giving the gift.

17. Jul 31, 2011

### Newai

http://www.nas.org/polArticles.cfm?doc_id=1884

The dropout rate is probably comparable then. Doesn't look too bad.

18. Jul 31, 2011

### khemist

It is the governments fault for attempting to bribe low income students to continue in school? How atrocious...

19. Jul 31, 2011

### SixNein

The bill did cut spending by almost a trillion dollars with locks in place to cut trillions more. So perhaps I fail to see the point.

As far as extra money to spend, the pell grant costs us about 36 billion, and we have a 14.7 trillion dollar economy even during this recession.

20. Jul 31, 2011

### Pengwuino

56% instead of 68% is a huge difference. Also, when they say "comparable", to me that means comparable as in similar numbers of risk factors such as those outlined in the thread already. This doesn't mean comparable to other students. This means compared to other BAD students. Also, a 50% graduation rate after 6 years is atrocious. It's fine if people want to spend their own money and not even graduate after so many years, but when it's tax payer money, that is ridiculous.

The worst part is that when you start looking at students who take 6-8 years to just get a BS in drama and theatre, these students are less likely to be investments in society. Most parents will even cut off their children after so many years!

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