How Does The Pell Grant Affect The Cost Of Higher Education

Melany Menezes Professor Esparza-Luna Principles of Microeconomics 31 July 2024 The Pell Grant and its Effects on Higher Education Enrollment The cost of higher learning has continuously increased in cost over the years and with such high expenses this pursuit of higher education is often not an option for those that face economic barriers. The Pell Grant increases educational opportunities and has been providing financial aid to students since 1972 after Congress established the program. As a grant, this award does not need to be repaid by the student and thus provides them with a higher chance for economic mobility. Eligibility for this grant results from socioeconomic status, mainly upon a student’s financial need, making it a need-based

Many believe that eligibility for the Pell Grant should be increased to account for more economically disadvantaged students as well as students from different economic backgrounds. With a higher priority towards fairness and equity, the Pell Grant is viewed as a social justice issue as all students should have the equal opportunity to pursue higher learning despite their different economic statuses. Government funding towards the Pell Grant brings higher equality of opportunity. Doubling the pell grant leads to higher enrollment specifically amongst low-income students, higher likelihood of graduating, and increased human capital. According to The Impact Of Tuition Increases On Undocumented College Students' Attainment, authored by Dylan Conger and Lesley Turner, increasing the maximum Pell Grant by $1,000 would result in retention rates increased by 2%-4%. This demonstrates a correlation between increasing the Pell Grant maximum and students staying with a college

Domestically, the impact of such a policy would be increased enrollment and retention rates, reduced student debt, and more economic mobility. Increased enrollment and retention is sourced from students not being burdened with attempts to finance their education, thus making the path to higher learning a possibility and a reality as they receive financial assistance through the Pell Grant. Being assisted financially by the Pell Grant, as well as other grants and scholarships, reduces student debt because grants are non-repayable, meaning the student does not have to be occupied with finding the finances to repay the awarded amount. More access to education breaks the poverty cycle as higher levels of education promote higher levels of income and more economic mobility. Globally, doubling the Pell Grant will result in enhanced global competitiveness and presenting the U.S. as a leader in education policy. In other countries, it has been demonstrated that a higher involvement in education leads to higher productivity and innovation because a more educated workforce can contribute to innovation and economic