A new study released this week by the nonprofit, nonpartisan Education Next finds that students who receive Pell Grants and other federal aid for attending college are more likely to earn a bachelor’s degree than those who don’t.
And, by a large margin, those who receive federal aid are more than twice as likely as students who don.
The new study, conducted by the Center on Budget and Policy Priorities, examines Pell Grant awards, loan forgiveness, and federal aid to families and students with incomes under $75,000, based on data from the Bureau of Labor Statistics.
Pell Grants are awarded to roughly 11 million students annually, with more than half receiving federal grants.
In recent years, the Obama administration has focused its efforts on ensuring that students are enrolled in college.
But that effort hasn’t made it easy for many students to access aid.
In 2018, the year before the study was conducted, the percentage of Pell Grant recipients who graduated from college was below 30 percent.
In 2019, it was below 15 percent.
The study also found that Pell Grants were more likely for students with low- and moderate-income families, those in urban areas, and those with students who earned more than $75 to attend college.
Pell grants for students who earn less than $25,000 were more than four times more likely than Pell Grants for those with more income.
Students who received federal loans were more more than eight times as likely to receive Pell grants as students with no loans.
In some cases, Pell Grants weren’t available for students at all.
For example, in 2017, only about 13 percent of Pell grant recipients had Pell Grants, while about 45 percent had no loans, according to the study.
The Education Next report finds that, even though federal aid may help students graduate from college, they’re far more likely in most cases to receive a Pell Grant.
The average Pell Grant recipient received $5,068 in aid, according the study, which analyzed data from 2020 to 2022.
The median Pell Grant award was $5.8 million.
Of those Pell grant awards, nearly two-thirds went to students in households earning $75 or less, and almost two-fifths to students with annual household incomes below $75.
About 80 percent of students who received Pell Grants received Pell Grant aid for free.
Pell Grant grant recipients who earned less than half of the federal poverty level earned less aid than those with higher incomes, the study found.
That gap narrowed in the years after the Great Recession, when Pell Grant loans became more affordable and the program expanded, the report found.
In addition, students who were not eligible for Pell Grant but still had outstanding federal loans received more aid.
For the median Pell grant recipient, Pell grants were about $7,500 less than Pell Grant grants for households with annual incomes between $75 and $125,000.
Pell grant borrowers who had outstanding loans received nearly $5 million less aid.
Overall, Pell Grant borrowers received about $3,400 less aid in 2019 than Pell grant-eligible borrowers.
Pell award recipients were also far more inclined to apply for Pell Grants in 2019.
About one in four Pell grantees applied for Pell grants, and nearly one in five of those applicants received Pell grants.
The report found that the majority of Pell awardees applied early to get into college, and about 60 percent received a Pell grant in 2019, compared with about 40 percent of those without Pell Grants.
The Pell Grant program offers grants to students from families that make less than about $75 for a single person, but those with household incomes above that amount were more apt to receive aid.
The percentage of eligible Pell grant applicants from families making less than that threshold has grown substantially since 2007.
In 2014, about 30 percent of all Pell grant applications were from families with incomes between the poverty level of about $23,000 and $63,000 per year.
By 2019, that number had grown to more than 55 percent, according for the Education Next study.
Students receiving Pell Grants also had higher likelihoods to graduate.
About 45 percent of applicants who received a grant from Pell Grants finished college, compared to 31 percent of non-Pell grant applicants.
Pell recipients were much more likely also to graduate from higher-paying colleges.
More than three-quarters of Pell grants went to college graduates, compared from 26 percent of people without Pell Grant, according data from Education Next.
For students who graduated, the median earnings of their college grads was about $36,000 less than those of their non-grantee peers.
Pell-eligible Pell Grant applicants had a median net worth of about half a million dollars in 2019—less than half the median net assets for all households.
