Detailed Information on the
Federal Pell Grants Assessment

Develop legislative and administrative strategies to improve performance on the annual and long-term measures. Work with the Congress on enacting the legislative strategies as part of the HEA reauthorization.

In the Higher Education Act (HEA) reauthorization, work with the Congress on proposals to better target Pell funding to the neediest students.

Repropose to amend the Internal Revenue Code to allow the IRS to match student aid data and tax data to prevent overawards (and underawards) in Pell and other student aid programs.

Provide sufficient funding for this program to keep the maximum award at $4,050, even with historic increases in the number of Pell-eligible students.

Measure: Postsecondary Enrollment rates: The percent of high school graduates enrolling immediately in college will increase each year for all students.

Explanation:The enrollment rate is defined as the percentage of high school graduates aged 16-24 enrolling immediately in college.

Measure: Enrollment rates: The postsecondary enrollment gap between low- and high-income high school graduates will decrease each year.

Explanation:

Measure: Enrollment rates: The postsecondary enrollment gap between Black and White high school graduates will decrease each year.

Explanation:

Measure: Enrollment rates: The postsecondary enrollment gap between Hispanic and White high school graduates will decrease each year.

Explanation:

Measure: Completion rates: Postsecondary education completion rates for all full-time, degree-seeking students in less-than-4-year programs will improve.

Explanation:

Measure: Completion rates: The postsecondary completion gap between Black and White full-time students in 4-year programs will decrease each year.

Explanation:

Measure: Completion rates: The postsecondary completion gap between Hispanic and White full-time students in 4-year programs will decrease each year.

Explanation:

Measure: Completion rates: The postsecondary completion gap between Black and White full-time students in less-than-4-year programs will decrease each year.

Explanation:

Measure: Completion rates: The postsecondary completion gap between Hispanic and White full-time students in less-than-4-year programs will decrease each year.

Explanation:

Measure: Persistence: The gap between persistence rates for Pell Grant recipients and for the general student population will decrease each year.

Explanation:The persistence rate is defined as the percentage of non-graduating students in a given year who return to continue their studies in the following year. A specific methodology to account for transfers and other data anomolies is under development.

Measure: Completion: The gap between completion rates for Pell Grant recipients and for the general student population will decrease each year.

Explanation:The completion rate is defined as the percentage of full-time degree-seeking students completing within 150 percent of the normal time required.

Measure: Targeting: The percent of Pell Grant funds that are targeted to students below 150% of the poverty level.

Explanation:At least 75 percent of Pell Grant funds will go to students below 150 percent of poverty level.

Measure: Postsecondary Enrollment rates: The percent of high school graduates enrolling immediately in college will increase each year.

Explanation:The enrollment rate is defined as the percentage of high school graduates aged 16-24 enrolling immediately in college.

Measure: Completion rates: Postsecondary education completion rates for all full-time, degree-seeking students in 4-year programs will improve.

Explanation:The completion rate is defined as the percentage of full-time degree-seeking students completing within 150 percent of the normal time required.

Measure: Administrative Unit Cost

Explanation:These rates reflect the lifetime administrative cost per award made in a given fiscal year. Measures are based on annual and projected activity-based cost data and program obligation information. Targets and updated actual data are under development.

Is the program purpose clear?

Explanation: The program provides grant assistance to undergraduate students who have financial need. Pell Grants are considered to be the foundation of students' postsecondary financial assistance. In other words, additional Federal, State, and private aid is often built on top of a student's Pell Grant award.

Evidence: Section 400 of the Higher Education Act of 1965, as amended, states the Federal Pell Grant program's purpose is "to assist in making available the benefits of postsecondary education to eligible students in eligible institutions of higher education".

Does the program address a specific and existing problem, interest, or need?

Explanation: The program, in combination with other Federal student assistance programs, addresses the need of low-income individuals for assistance in meeting the cost of a postsecondary education.

Evidence: Section 401 of the Higher Education Act establishes program eligibility and award criteria for Pell Grants.

Is the program designed so that it is not redundant or duplicative of any Federal, state, local or private effort?

Explanation: The program is the single largest source of postsecondary grant aid, awarding funds to eligible students based on a statutory formula that takes into account family income and educational costs. The program makes a unique contribution by providing a stable foundation of need-based aid for all eligible students. Student aid administrators use other Federal, State, and private aid programs to complement Pell Grants when they create financial aid packages tailored to individual student needs.

Evidence: In 2001-2002, all State grant programs for higher education totaled an estimated $5 billion, whereas Pell Grants alone totaled nearly $10 billion (see The College Board's "Trends in Student Aid, 2002").

Is the program design free of major flaws that would limit the program's effectiveness or efficiency?

Explanation: Federal Pell Grants are designed to function as a voucher; as such, the program not only provides access to higher education but also greater flexibility and increased choice by allowing students to use their grants at a wide range of institutions of higher education nationwide.

Evidence: Students use Pell Grants to attend over 5,500 institutions across the country. These include four-year public and private institutions, two-year community colleges, and proprietary institutions.

Is the program effectively targeted, so program resources reach intended beneficiaries and/or otherwise address the program's purpose directly?

Explanation: The Pell Grant program is the largest source of postsecondary grant aid, and is a means-tested program where students with the highest financial need receive the highest grant awards. However, any increase of the Pell Grant maximum award (done through Federal appropriations law) affects the program's targeting toward the neediest students. While increasing the maximum award benefits the neediest Pell students by increasing their total grant aid, it also expands Pell eligibility to more higher-income students, who then qualify for the minimum.

Evidence: In 2000-2001, approximately 84 percent of all Pell Grant recipients had family incomes less than or equal to $30,000.

Does the program have a limited number of specific long-term performance measures that focus on outcomes and meaningfully reflect the purpose of the program?

Explanation: The Department's Strategic Plan includes performance measures that tie directly to the purpose of the Pell Grant program, such as the degree to which Pell Grants are targeted to low-income students. The Strategic Plan also includes measures related to the postsecondary enrollment and graduation rates among low-income and minority students. Given the scope of the Pell Grant program (where nearly 1/3 of all undergraduates receive an award), it is appropriate to use these overall postsecondary education measures to evaluate Pell performance. In addition, the Department has developed more specific goals related to student persistence and graduation rates for student aid recipients, as compared to the overall student population. All these measures include (or, in the case of new measures, will include) annual goals through fiscal year 2007. The Department is working with OMB on developing an appropriate efficiency measure for this program.

Evidence: Department of Education Strategic Plan; Goal 5, Objectives 5.1, 5.3. See "Measures" tab for specific program measures.

Does the program have ambitious targets and timeframes for its long-term measures?

Explanation: Specific targets and timeframes are shown in the "Measures" tab. Targets and timeframes for the new measures are under development.

Evidence: See answer to 2.1

Does the program have a limited number of specific annual performance measures that demonstrate progress toward achieving the program's long-term measures?

Explanation: The Department has annual and long term goals (through fiscal year 2007) for performance measures related to the student aid programs, and is in the process of adding two new measures on persistence and completion. The Department is working with OMB on developing an appropriate efficiency measure for this program.

Evidence: Department of Education Strategic Plan; Goal 5, Objectives 5.1, 5.3. See "Measures" tab for specific program measures.

Does the program have baselines and ambitious targets and timeframes for its annual measures?

Explanation: Specific targets and timeframes are shown in the "Measures" tab. Targets and timeframes for the new measures are under development.

Evidence: See answer to 2.3.

Do all partners (including grantees, sub-grantees, contractors, cost-sharing partners, etc.) commit to and work toward the annual and/or long-term goals of the program?

Explanation: While program partners (institutions of higher education) support the goals of the Pell Grant program, they are not required to report explicitly on the goals included in the Department's Strategic Plan. However, participating institutions are required to report a wealth of program data through both surveys (such as the Integrated Postsecondary Data System (IPEDS) and the National Student Loan Data System (NSLDS)) and the Department's financial systems. The Department uses data from these reports to determine program performance.

Evidence: IPEDS, NSLDS, Department of Education financial and program management reports

Are independent and quality evaluations of sufficient scope and quality conducted on a regular basis or as needed to support program improvements and evaluate effectiveness and relevance to the problem, interest, or need?

Explanation: While the Department has not commissioned any independent evaluations of the Pell Grant program, it regularly collects data from Pell Grant program participants through a number of data systems, annual studies, and longitudinal studies. These data collection efforts provide performance information which the Department uses to support program improvements and evaluate effectiveness. Moreover, private researchers/higher education organizations regularly conduct their own comprehensive evaluations of the Pell Grant program.

Evidence: Pell Grant merged applicant files; National Student Loan Data System; Integrated Postsecondary Data System; other Department of Education financial and program management reports; National Postsecondary Student Aid Study; Baccalaureate & Beyond; Beginning Postsecondary Student Longitudinal Study; High School and Beyond; National Education Longitudinal Study, 1988; National Household Education Survey; National Longitudinal Study, 1972; Recent College Graduates Study, Persistence and Attainment of Beginning Students With Pell Grants Report, 2002. Also, various private studies (for examples of these, see the evidence for question 4.4).

Are Budget requests explicitly tied to accomplishment of the annual and long-term performance goals, and are the resource needs presented in a complete and transparent manner in the program's budget?

Explanation: The Department collects extensive Pell program data, and uses it in concert with forecasting models to project the impact of economic conditions, college costs, student aid applicant rates, Pell maximum award levels, and policy changes on program costs. Still, ED has not fully satisfied the first part of the question because program performance changes are not identified with changes in funding levels. The program, at this time, does not have sufficiently valid and reliable performance information to assess (whether directly or indirectly) the impact of the Federal investment. ED has, however, satisfied the second part of this question in that ED's budget submissions show the full cost of the program (including S&E). Also, ED's FY 2005 integrated budget and performance plan include the program's annual and long-term goals.

Evidence: Department of Education Budget justifications for Pell Grants, and the Department's Pell Grants program cost model.

Has the program taken meaningful steps to correct its strategic planning deficiencies?

Explanation: The Department recently developed additional goals related to student persistence and graduation rates, as compared to the overall population. Moreover, as part of the Higher Education Act (HEA) reauthorization process, the Department is committed to strengthening the program's focus on encouraging persistence and degree attainment, and improve the program's targeting to low-income students.

Evidence: See "Measures" tab for specific program measures.

Does the agency regularly collect timely and credible performance information, including information from key program partners, and use it to manage the program and improve performance?

Explanation: The Department regularly collects data from Pell Grant program participants through a number of data systems and annual and longitudinal studies. These data collection efforts provide sufficient performance information to support program improvements and evaluate effectiveness.

Evidence: Pell Grant merged applicant files; National Student Loan Data System; Integrated Postsecondary Data System; other Department of Education financial and program management reports; National Postsecondary Student Aid Study; Baccalaureate & Beyond; Beginning Postsecondary Student Longitudinal Study; High School and Beyond; National Education Longitudinal Study, 1988; National Household Education Survey; National Longitudinal Study, 1972; Recent College Graduates Study.

Are Federal managers and program partners (grantees, subgrantees, contractors, cost-sharing partners, etc.) held accountable for cost, schedule and performance results?

Explanation: ED's managers are subject to EDPAS, which links employee performance to relevant Strategic Plan goals and action steps, and is designed to measure the degree to which a manager contributes to improving program performance. The Office of Federal Student Aid's (OFSA) federal managers are also subject to performance agreements developed under its Performance-Based Organization authority. Postsecondary institutions (the program partners) are held accountable through statutory cohort default rate penalties, annual compliance audits, and periodic program reviews, including site visits by ED. To receive a "Yes," ED needs to: (1) identify for OMB the federal managers for this program; and (2) demonstrate the relationship between these managers' performance standards and the program's long-term and annual measures; and (3) demonstrate the relationship between program partners' performance standards and the program's long-term and annual measures.

Evidence:  

Are all funds (Federal and partners') obligated in a timely manner and spent for the intended purpose?

Explanation: As required by the Higher Education Act, the Department provides participating institutions of higher education an initial allocation of funds sufficient to fund the first payment period (85% of the prior year's allocation). Thereafter, the Department uses electronic funds transfers to provide additional funds to institutions as needed.

Evidence: Department of Education financial management reports. Section 401(a) of the Higher Education Act includes the 85% allocation requirement.

Does the program have procedures (e.g., competitive sourcing/cost comparisons, IT improvements, approporaite incentives) to measure and achieve efficiencies and cost effectiveness in program execution?

Explanation: The Department has not yet completed a comprehensive unit-cost measurement system for the student aid programs. That said, the Department has instituted a number of procedures to measure and achieve efficiencies in program operations, including the One-ED initiative (yet to be fully applied to FSA) and a strengthened Investment Review Board to review and approve information technology purchases.

Evidence: Department One-ED and Investment Review Board materials.

Does the program collaborate and coordinate effectively with related programs?

Explanation: The Pell Grant program serves as the foundation for several interrelated Federal, State, and institutional financial aid programs which work together to accomplish the shared goal of increasing access to higher education. The Federal student aid programs share a common application and need analysis process that many States and postsecondary institutions use as the basis for their own need-based aid. In addition, postsecondary institution financial aid administrators package the various forms of aid to best meet the needs of each eligible student.

Evidence: Program structure, including aid packaging process and widespread use of FAFSA for Federal and State aid.

Does the program use strong financial management practices?

Explanation: The Department has taken major steps to improve its financial management over the past several years, as reflected in the Department's unqualified audit opinion for FY 2002. That said, the Department's Inspector General has raised a number of issues regarding potential fraud in the Pell Grant program. Notably, net Pell Grant overawards are estimated at more than $300 million annually (these overawards are caused by students misreporting their income and assets on the FAFSA).

Evidence: Department of Education Inspector General Reports. Internal estimates of Pell Grant net overawards. These overawards are reflected in FY 2004 Budget materials as savings realized by enactment of the Administration's IRS income verfication proposal (see 3.7).

Has the program taken meaningful steps to address its management deficiencies?

Explanation: The Department has taken a number of major steps to improve internal management, one result of which is an unqualified opinion on its FY 2002 and 2003 financial statements. These efforts include the successful implementation of a new general ledger system; an Investment Review Board to oversee information technology acquisitions; and a new employee performance appraisal system tied directly to the Department's performance goals. These efforts also include a legislative proposal to use IRS data to verify incomes on student aid applications. However, the Department still needs to develop a unit cost framework for its student aid administration, complete the One-ED strategic investment review process for the Office of Federal Student Aid (OFSA), and complete the OFSA data strategy.

Evidence: Department of Education FY 2002 Accountability Report; One-ED materials; Department strategic plan; Investment Review Board materials; implementation of EDPAS. The Administration's IRS income verification proposal is reflected in the FY 2004 Budget. For most information on OFSA, see the Student Aid Administration PART.

Does the program have oversight practices that provide sufficient knowledge of grantee activities?

Explanation: Program participants are held accountable through annual compliance audits and regular program reviews, including peridoic site visits by Department of Education staff.

Evidence: Department of Education institutional eligibility reports

Does the program collect grantee performance data on an annual basis and make it available to the public in a transparent and meaningful manner?

Explanation: The Department's annual Pell Grant End-of-Year report contains a significant amount of aggregated program performance data. However, since Pell Grant recipients are individual students, data on specific grantees is subject to privacy restrictions and are thus not available.

Evidence: The Pell Grant annual end-of-year report is available on the Department of Education's web site

Has the program demonstrated adequate progress in achieving its long-term outcome performance goals?

Explanation: To a minimal extent, the Pell Grant program has met its current long-term performance goals. The addition of new measures related to persistance and graduation rates will strengthen that Department's ability to assess program performance. However, these performance goals are newly established and no long-term data is yet available. To receive a "large extent" or Yes answer, the Department needs to show progress in achieving these additional performance goals, and improve its performance on enrollment rates.

Evidence: See "Measures" tab for specific program measures.

Does the program (including program partners) achieve its annual performance goals?

Explanation: To a minimal extent, the Pell Grant program has met its current annual performance goals. The addition of new measures related to persistance and graduation rates will strengthen that Department's ability to assess program performance. However, these performance goals are newly established and no long-term data are yet available. To receive a "large extent" or Yes answer, the Department needs to show it is achieving these additional performance goals, and improve the program's performance on inreasing enrollment rates.

Evidence: See "Measures" tab for specific program measures.

Does the program demonstrate improved efficiencies or cost effectiveness in achieving program performance goals each year?

Explanation: The Department is working with OMB on developing an appropriate efficiency measure for this program.

Evidence:  

Does the performance of this program compare favorably to other programs, including government, private, etc., that have similar purpose and goals?

Explanation: The Pell Grant program compares very favorably with other programs with similar purpose and goals; its voucher-like structure maximizes student choice and simplifies the delivery of funds, while studies have consistently found that Pell Grants are the single most effective tool in increasing low-income access to higher education.

Evidence: Persistence and Attainment of Beginning Students with Pell Grants (National Center of Education Statistics, 2002); The Economic Value of Higher Education (Leslie and Brinkman, American Council of Education, 1998); "Back to School: Federal Student Aid Policy and Adult College Enrollment" (Seftor and Turner, Journal of Human Resources, 2002)

Do independent and quality evaluations of this program indicate that the program is effective and achieving results?

Explanation: Both comprehensive studies and program data indicate that the Pell Grant program is effective in increasing low-income individuals' access to postsecondary education.

Evidence: Persistence and Attainment of Beginning Students with Pell Grants (National Center of Education Statistics, 2002); The Economic Value of Higher Education (Leslie and Brinkman, American Council of Education, 1998); "Back to School: Federal Student Aid Policy and Adult College Enrollment" (Seftor and Turner, Journal of Human Resources, 2002); Department of Education program and financial reports