It’s no surprise that enrollment in postsecondary education has been on the decline in recent years. According to the National Student Clearinghouse Research Center, overall postsecondary enrollment has decreased 1.5% from Spring 2016 to Spring 2017. That’s the equivalent of a decline of 262,400 students compared to the Spring 2016 semester. Furthermore, there has been a decline of 523,200 students from the Spring 2015 semester to the Spring 2017 semester.
One factor driving the decline in enrollment is the increased cost of tuition. Postsecondary education costs to students have increased approximately 11% in the past five years, according to College Board. This is a substantial increase when compared to U.S. inflation of 6% during the same time period.
That being said, many higher education institutions are feeling the pressure to increase tuition to counter increasing expenses and stagnant revenues. Moody’s found that “one-third of small colleges generated operating deficits in Fiscal year 2016,” which is an increase of 20% when compared to three years ago. With the median age of facilities and equipment increasing consecutively during the past five years from 11.9 years in 2012 to 13.3 years in 2016, there will be fewer opportunities to cut costs in the future.
If only there was a new source of assistance available to students and institutions to help elevate these rising financial pressures. Thanks to Congress and the U.S. Department of Education, there is! Beginning July 1, 2017, Year-Round Pell Grants will be available to students. Eligible students will be able to receive up to 150% of the Student’s Federal Pell Grant Scheduled Award. That’s up to $2,960 in additional Pell grants per year for each student. According to Secretary of Education Betsy DeVos, “expanding access to the Pell program” will allow “student(s) who need additional resources to graduate more quickly and with less debt.”
With the availability of additional government grants, higher education institutions may realize more flexibility when considering the relationship between institutional aid and tuition. Year-Round Pell Grants could serve as a strong incentive for students to enroll in summer classes, and an opportunity for higher education institutions to provide the best value to students through highly promoted summer semesters. No matter how you slice it, year-round Pell is swell.
For more information, contact Schneider Downs or visit the Our Thoughts On blog.