College Aid Calculations Don’t Measure Up

Every other year, the National Center for Public Policy and Higher Education (NCPPHE) – an organization run almost exclusively by politicians and higher education insiders – issues a report called Measuring Up, which typically declares that as a nation we provide far too little aid to students to help them afford college. Measuring Up 2006, released today, is no different.

Now, to be fair, the 2006 edition of the biennial woe-fest does make a good point about government-funded student aid, noting that it has increasingly targeted middle and even upper-class – rather than low-income - students. Of course, it fails to note the inevitability of that outcome given that aid to the poor must be accompanied by aid to the middle class to be politically viable.

Where Measuring Up 2006 deserves scorn, though – as have previous Measuring Up reports – is in how it calculates federal student aid, a critical part of the report’s determination of college affordability.

A reasonable person would, of course, consider federal aid to be any kind of financial assistance provided to students by the federal government. That would be both federal and aid, after all. But the folks at NCPPHE don’t see it that way. No, for them, only Pell grants count as federal aid. Why? Because, according to the Measuring Up “Technical Guide” – which is separate from the main report – “Pell grants are by far the largest component of federal grant aid.”

Oh, come on! According to data from the College Board, while it is true that Pell grants provide more aid than any other federal grant programs, Pell is still far from the only federal grant initiative, and not even close to the only federal aid program.

Here are the numbers: In the 2004-05 academic year, while the federal government doled out $13.1 billion in Pell grants, it provided an additional $6.3 billion through work study and grant programs other than Pell. Add to that the $8.0 billion that people received through federal higher education tax benefits, and the non-Pell total surpasses the Pell amount, hitting $14.3 billion. And then there are federal loans, which even when not technically subsidized (the feds pay the interest on the loans for a given amount of time) are still in reality subsidized because they are backed with taxpayer dollars, which helps keep their interest rates artificially low. Add those loans – a total of $62.4 billion – to the student aid pot and Pell grants are absolutely dwarfed, coming in at just 14 percent of all federal aid.

And so, the higher education establishment has struck again. Absurdly defining all federal student aid as just Pell grants, Measuring Up 2006 has ignored the vast majority of aid furnished by federal taxpayers and cried out for more money. It’s just the kind of accounting that could only measure up in a report intended to further rip off taxpayers and enrich the ivory tower.