Heterogeneity Among Pell RecipientsEvidence and Implications

Robert Kelchen and Sara Goldrick-RabUniversity of Wisconsin-Madison

Affordability and College Attainment in Wisconsin Public Higher EducationJuly 7, 2011

Motivation

• Policymakers are pursuing equity and excellence agendas simultaneously—aiming to expand access and diversity while also increasing college completion rates

• One popular proxy for diversity is the percent of low-income students on campus

• Since most colleges and universities lack information on family income, Pell Grant receipt is the common measure

Possible Unintended Consequences

• Equity and excellence can conflict: a greater representation of Pell recipients is associated with lower graduation rates

• Accountability for completion rates may create incentives for colleges to “cream” the top tier of Pell recipients

• There is already evidence of fierce competition for high-ability, low-income students among institutions with greater resources

Common Assumptions and Potential Problems

• Pell receipt signifies a common set of student characteristics

• This facilitates a comparison of the presence and performance of Pell recipients across institutions as a way to assess institutional performance

• However, this approach implies general homogeneity among Pell recipients as a group

• It also implies no role for institutions in the sorting of Pell recipients across colleges and universities

Focus of this Study

We consider the degree to which Pell Grant recipients are heterogeneous:1. Across four selectivity tiers of public Wisconsin

universities and both 2-year sectors2. Across institutions within selectivity tiers and sectors3. Within institutions

In other words, we ask “Can we simply assume a Pell recipient is a Pell recipient is a Pell recipient?”

Pell Grant 101

• Students and their families must fill out the FAFSA • Eligibility is based on an expected family contribution

(EFC)• Students with an EFC of below $4,041 in 2008-09

academic year were eligible to receive a Pell up to $4,731• The needs analysis (EFC calculation) is one source of

variation among Pell recipients—it relies on an array of information about family income and assets

Keeping the Pell Grant

Initial receipt does not ensure continued receipt. Renewal requires:1. Refiling a FAFSA2. Continuing to have a qualified EFC3. Making “satisfactory academic progress”

• Varies by institution but usually a C average

So—once a Pell recipient, not always a Pell recipient

Pell Characteristics Nationwide (2008-2009)

• 6.1 million recipients • 28.4% of undergraduates received a Pell• 41% of recipients were dependents

• 49% of dependents had a zero EFC• 38% of dependents scored in the lowest quartile on

ACT/SAT, while only 14% scored in the top quartile

Pell Recipients in Wisconsin Public Higher Education (2008-2009)• Nearly 60,000 students received Pell Grants

• 20% of university students• 23% of Wisconsin Technical College System students• 24% of UW Colleges students

• Rates of retention to the 2nd year of college at universities: • 76% for Pell recipients vs. 81% for non-recipients

• 6-year bachelor’s completion rates at universities:• 55% for Pell recipients vs. 68% for non-recipients

Wisconsin Public Higher Education

• 13 public universities (UW)• Tier 1: Median ACT 25-28 (Universities A-C)• Tier 2: Median ACT 23 (Universities D-F)• Tier 3: Median ACT 22 (Universities G-J)• Tier 4: Median ACT 20-21 (Universities K-M)

• UW Colleges (13 two-year branches)• Wisconsin Technical College System (16 two-year districts)

Sample for this Study

• Stratified random sample of first-time, traditional-age Pell recipients who enrolled full-time at a public Wisconsin college or university in September 2008

• Total number of students=2370

Data

• FAFSA • Gender, age, parental income and assets, EFC, parental

education, dependency status• Observed for all students

• ACT scores• Observed for 52.4% of university students

• National Student Clearinghouse • Tracks whether a student is enrolled at any institution in

the fall 2009 semester• Observed for all students

Data

• Self-administered mail survey of students• 28 pages• 74% response rate in fall 2008

• Includes the following measures that are often affect student outcomes but are usually not measured in national, state, or institutional datasets:• Motivation and effort• Social capital (access to information)• Developmental stage (progress towards adulthood)

Measuring Heterogeneity

We use three approaches:

• Graphical distributions (kernel density plots)• Standard deviations• Percentiles of distributions (10th, 25th, 50th, 75th, and 90th)

Question #1: How do Pell recipients vary across selectivity tiers and sectors?• Compared to Tier 1 recipients, Tier 4 Pell recipients:

• Have less economic security and financial capital• Have clearer goals for the future• Are farther along the transition to adulthood

• Compared to UW Colleges students, WTCS students:• Are slightly more willing to sacrifice today for tomorrow

(e.g. they think longer-term)• Are more confident in their ability to get good grades in

college• Have fewer financial resources

Within-Tier Variation

Distribution of parental income—Tier 1 Distribution of parental income—Tier 4

0.0

0001

.000

02.0

0003

Den

sity

0 20000 40000 60000 80000Parent adjusted gross income

University AUniversity BUniversity C

0.0

0001

.000

02D

ensi

ty

0 20000 40000 60000 80000Parent adjusted gross income

University KUniversity LUniversity M

Within-Tier Variation

Distribution of ACT scores--Tier 1 Distribution of ACT scores--Tier 4

0.0

5.1

.15

.2D

ensi

ty

10 15 20 25 30 35ACT composite score

University AUniversity BUniversity C

0.0

5.1

.15

Den

sity

10 15 20 25 30 35ACT composite score

University KUniversity LUniversity M

Within-Institution Variation

1 2 3 4 50.0%

5.0%

10.0%

15.0%

20.0%

25.0%

30.0%

35.0%

40.0%

45.0%

Financial confidence—University A

1 2 3 4 50.0%

5.0%

10.0%

15.0%

20.0%

25.0%

30.0%

35.0%

40.0%

45.0%

Financial confidence-- Uni-versity L

Within-Institution Variation

1 2 3 4 50.0%

10.0%

20.0%

30.0%

40.0%

50.0%

60.0%

Transition to adulthood--Uni-versity L

1 2 3 4 5

-10.0%

0.0%

10.0%

20.0%

30.0%

40.0%

50.0%

60.0%

Transition to adulthood--Uni-versity A

University A

University B

University C

University D

University E

University F

University G

University H

University I

University J

University K

University L

University M

UW Colleges

0 20 40 60 80 100

Year 2 Pell Renewal Rates by Institution and Tier

Renewal Rate (%)

Tier 4

Tier 3

Tier 2

Tier 1

University A

University B

University C

University D

University E

University F

University G

University H

University I

University J

University K

University L

University M

University of Wisconsin Colleges

Wisconsin Technical College System

0.0 20.0 40.0 60.0 80.0 100.0

Year 2 Persistence Rate by Institution and Tier

Persistence Rate (%)

Tier 4

Tier 3

Tier 2

Tier 1

Conclusions

• There is wide variation among Pell Grant recipients attending Wisconsin’s public colleges and universities

• The differences in students are not strictly linked to the selectivity of the institutions they attend

• Blunt measures of accountability– such as “Percent Pell” or “Pell Graduation Rates” may create perverse incentives

• Designing better measures of accountability will require use of data systems that can better profile students and their needs