There’s a huge market inefficiency when it comes to federal financial aid in this country: nearly 40% of graduating high school seniors don’t file a FAFSA®. Of enrolled students, nearly 20% didn’t complete an application according to the most recent survey data, 44% of whom believed they wouldn’t receive any aid.
The resources exist for those individuals to receive financial aid to pay for college, but they’re leaving the money on the table.
How much money?
The end result of all of this is that $2.3 billion in potential Pell Grant awards – which don’t need to be paid back – go unused each year. Add in loans and the number rises to a staggering $29 billion.
For the sake of this particular blog, we’re going to focus on the “unused” bit. A lot of effort is being made to get more people to file their FAFSA®, and whether or not people should even want to go to college is a much heavier debate than 600 words can encapsulate.
What we need is context.
The funds exist, at least as far as the unused Pell Grant awards are concerned. They’ve been budgeted for. If the money’s there, can we use it for something?
And if we can use it, what can we do with it? Here are some ideas, some practical, others less so:
Feed over 1 million people
Our resident chef and food expert told us it’s more than possible for someone to properly feed themselves on a $2 a meal budget. With $2.3 billion, we can supply three meals a day to over a million people for an entire year.
And before you think this is just an “end world hunger” play, remember that a significant number of students worry about their ability to afford adequate food. It’s a real issue, and $2.3 billion could solve that problem.
Buy 11,500 houses
The median price for a house in the United States is $200,000. Let’s assume three students can comfortably live in each house, and that’s housing sorted for 34,500 students.
Why is this so important? One in 10 students experienced homelessness in the past year. $2.3 billion can’t house everyone, but it can create transitional homes for those who are struggling.
Buy 28 million textbooks
That equates to a little over one free textbook for every student. For a more practical application, we can probably get a sizable number of textbook authors and publishers to allow the content to be distributed freely to students.
There’s an idea.
Build 9 state of the art football facilities
This may seem like a sad commentary on the state of education in this country – and, in many lights, it is – but football and basketball programs are hugely beneficial to schools. They’re revenue producers, not just for the athletic department as a whole, but for the university, too.
So do your thing, Northwestern.
(And if football is your thing, you can buy the Carolina Panthers.)
There’s one more thing we can do with $2.3 billion that’s worth mentioning.
Give every student…$115 dollars
Every little bit helps, but the Pell Grant doesn’t really make much of a dent in today’s higher education climate. The program itself is limited – the maximum award for the 2018-2019 school year is $6,095 – but it wasn’t always that way.
In 1980, a Pell Grant covered over 70% of a student’s educational expenses.
We know the financial aid crisis can’t be solved by shifting some unused funds around, but all this does illustrate how inefficient things are at the moment. And, if we can’t use those allocated funds in other areas, hopefully we can get more students taking advantage of their availability.