• Introduction
• Institution Type, Pell Grant Awards, and Other Financial Aid
• Academic Background and Enrollment Characteristics
• Persistence Risk Factors
• Three-Year Rates of Persistence
• References

The Pell Grant program is the largest federal need-based grant program available to postsecondary education students. In 1998–99, the federal government spent $7.2 billion on Pell Grants for more than 3.8 million students (U.S. Department of Education 1999). Students can use a Pell Grant at almost all 2- and 4-year public and private not-for-profit institutions, as well as several thousand private for-profit institutions. Pell Grant program eligibility is based primarily on the student's and/or parents' income for the previous year, with awards made primarily to low-income students. Among undergraduates who enrolled in postsecondary education for the first time in 1995–96, 87 percent of Pell Grant recipients were either dependent students whose parents' incomes were under $45,000 (59 percent) or independent students with incomes under $25,000 (28 percent). Other factors are also taken into account in awarding Pell Grants, such as student and parent assets and other family members who are concurrently enrolled in college.

This report provides a description of Pell Grant recipients who were first-time beginning postsecondary students in 1995–96. Using data from the 1996 Beginning Post-secondary Students Longitudinal Study, "First Follow-up" (BPS:96/98), the report examines the academic and enrollment characteristics of beginning students who received a Pell Grant and their rates of persistence 3 years after first starting postsecondary education. These students are compared with beginning students who did not receive a Pell Grant. Because Pell Grant recipients are predominantly low-income students, high-income students were excluded from the analysis when comparing students' educational background and postsecondary outcomes. For these analyses, Pell Grant recipients were only compared to low- and middle-income nonrecipients. However, all students were included when analyzing the distribution of different types of financial aid and the types of institutions that students attended with respect to whether or not they received a Pell Grant.

In 1995–96, 29 percent of all beginning students and 32 percent of full-time beginning students received a Pell Grant. Beginning postsecondary students receiving Pell Grants differed from other first-time students in the types of institutions attended and receipt of other types of financial aid. When examining low- and middle-income students only, Pell Grant recipients differed from nonrecipients in their level of high school academic preparation and the number of factors that put them at risk for not achieving their educational objectives.

Taking into account all students who enrolled in post-secondary education for the first time in 1995–96, Pell Grant recipients differed from nonrecipients in where they enrolled. In particular, they were more likely than non-recipients to attend private for-profit less-than-4-year institutions, which provide primarily short-term occupational training. Pell Grant recipients were less likely than nonrecipients to attend public 4-year, public 2-year, and private not-for-profit 4-year institutions (table A). Differences in enrollment patterns were also notable among full-time students, with 26 percent of Pell Grant recipients attending public 4-year institutions and 22 percent attending private for-profit less-than-4-year institutions. In contrast, 35 percent of full-time nonrecipients attended public 4-year institutions and 8 percent attended private for-profit less-than-4-year institutions.

Because Pell Grant recipients are primarily low-income students, they were more likely than nonrecipients to qualify for and receive additional types of financial aid such as loans, work-study, and other grant aid. Among Pell Grant recipients, those enrolled at private not-for-profit 4-year institutions were more likely than those at other institutions to receive other financial aid.

Taking into account low- and middle-income students only, Pell Grant recipients were less well prepared academically than their counterparts who did not receive a Pell Grant. Among students enrolled at 4-year institutions, Pell Grant recipients were more likely than nonrecipients to have SAT I (or equivalent ACT) scores that fell in the lowest quartile and less likely to have completed a rigorous curriculum while in high school. Those attending less-than-4-year institutions were less likely than nonrecipients to have received a high school diploma (i.e., they did not graduate or they finished high school with a GED or high school completion certificate).

Low- and middle-income Pell Grant recipients attending less-than-4-year institutions differed in some respects from nonrecipients in their educational objectives. Recipients at public 2-year institutions were more likely than non-recipients to be pursuing an associate's degree and less likely to be working toward a vocational certificate. Pell Grant recipients enrolled at private for-profit less-than-4-year institutions were more likely than nonrecipients to be pursuing no degree and less likely to be pursuing a vocational certificate.

Pell Grant recipients enrolled at public 2-year institutions also were more likely than nonrecipients to enroll full time and less likely to work while enrolled. This may be due in part to the Pell Grant program's requirements. Both part-time attendance and income earned from employment can decrease eligibility for a Pell Grant.

Seven characteristics have been shown to be associated with leaving postsecondary education without a degree (Horn and Premo 1995): not graduating from high school (or finishing with a GED or high school completion certificate), delaying enrollment in postsecondary education, being financially independent (i.e., for financial aid purposes), having dependents other than one's spouse, being a single parent, attending part time, and working full time while enrolled. Among low- and middle-income beginning students, Pell Grant recipients were more likely than non-recipients to have each of these persistence risk factors except for full-time employment and part-time enrollment (figure A). Recipients also had a higher average number of risk factors than did nonrecipients. Recipients' likelihood of having such factors varied by institution type, with those at less-than-4-year institutions more likely than those at 4-year institutions to be at risk. Within each institution type, however, Pell Grant recipients were more likely than nonrecipients to be independent, to have children, and to be single parents.

Figure A.—Percentage of 1995–96 low- and middle-income beginning postsecondary students with persistence risk factors, by receipt of Pell Grant

Examination of 3-year rates of persistence included comparisons of students by institution type and academic background, comparisons of Pell Grant recipients by receipt of other financial aid or parental support, and a multivariate analysis taking into account several variables associated with persistence.

The 3-year persistence rates of Pell Grant recipients initially enrolled at 4-year institutions and those enrolled at less-than-4-year institutions were examined separately to account for differences in the academic preparation and educational goals of students at different types of institutions. Because Pell Grant recipients were less well prepared academically and reported more persistence risk factors than nonrecipients, it might be expected that Pell Grant recipients would have lower rates of persistence and attainment than nonrecipients. However, with a few exceptions, this appeared in large part not to be observed in this study.

Considering all low- and middle-income beginning students who were enrolled at 4-year institutions in 1995–96, no differences in 3-year persistence rates were detected between Pell Grant recipients and nonrecipients. Furthermore, with one exception, no differences were detected in persistence between Pell recipients and nonrecipients when taking into account either SAT I/ACT composite test scores (table B) or high school curriculum (table C). The exception was for those who scored in the lowest SAT I/ACT quartile (table B): Pell grant recipients were less likely than nonrecipients to leave postsecondary education without a degree (16 vs. 26 percent).

Private not-for-profit 4-year institutions. When examining low- and middle-income students in 4-year institutions separately within sector, some differences were observed among students enrolled at private not-for-profit institutions. Specifically, among those who had completed a mid-level high school academic curriculum, nonrecipients were more likely than Pell Grant recipients to remain enrolled at an institution of the same level or higher (80 vs. 64 percent). Among those who had taken a rigorous high school curriculum, however, no differences in persistence rates were detected between recipients and nonrecipients (89 percent for both groups).

Public 4-year institutions. Among low- and middle-income beginning students enrolled at public 4-year institutions, differences were found among students scoring in the lowest and middle quartiles on their entrance exams: Among those scoring in the lowest quartile, Pell Grant recipients were less likely to leave without a degree (15 vs. 28 percent), while among those scoring in the middle quartiles, Pell Grant recipients were more likely to leave without a degree (17 vs. 12 percent). However, in neither of these test score groups (lowest or middle quartiles) were differences detected in the likelihood of remaining enrolled at an institution of the same level or higher.

Among low- and middle-income students enrolled at less-than-4-year institutions, Pell Grant recipients averaged more persistence risk factors than nonrecipients and were less likely than nonrecipients to have graduated from high school. Despite such risk attributes, no differences in 3-year persistence rates were detected between Pell Grant recipients and nonrecipients attending either public 2-year or private for-profit less-than-4-year institutions.

The study also examined 3-year persistence rates for full-time beginning students with a Pell Grant in light of other types of financial assistance received, in particular loan aid and assistance from parents. Among full-time Pell Grant recipients enrolled at private institutions (both not-for-profit 4-year and for-profit less-than-4-year institutions), those who received loan aid during their first year of enrollment were more likely than those who did not receive any loans to remain enrolled at an institution of the same level or higher. No such differences in persistence were detected among Pell Grant recipients enrolled at public 2-year or public 4-year institutions.

Finally, Pell Grant recipients were examined with respect to the relationship between persistence and financial support from parents.¹ Unlike the results found for loan aid, no differences in persistence were observed between Pell Grant recipients who reported receiving financial support from their parents and those who did not.

Finally, a multivariate analysis was conducted analyzing the likelihood of remaining enrolled at an institution of the same level or higher for 3 years. The analysis included all full-time low- and middle-income beginning students enrolled at all types of institutions. It took into account Pell Grant receipt and several other variables associated with persistence, including type of institution first attended, demographic characteristics (gender, race/ethnicity, age, and parents' education level), income level (low vs. middle), and persistence risk factors.² Taken together, these variables accounted for 8.5 percent of the variance in the likelihood of remaining enrolled for 3 years at an institution of the same or higher level.

Before any of the background variables were taken into consideration, among all full-time low- and middle-income beginning students enrolled at all postsecondary institutions, Pell Grant recipients were less likely to remain enrolled than their nonrecipient counterparts. However, the findings from the multivariate analysis showed that no differences in persistence could be detected after controlling for the covariation of related variables. In other words, after taking into account such variables as type of institution first attended, income, parents' education, age, and persistence risk factors, the analysis failed to find a difference in persistence between Pell Grant recipients and nonrecipients.

Horn, L.J., and Premo, M.D. (1995). Profile of Undergraduates in U.S. Postsecondary Education Institutions: 1992–93, With an Essay on Undergraduates at Risk (NCES 96–237). U.S. Department of Education, National Center for Education Statistics. Washington, DC: U.S. Government Printing Office.

U.S. Department of Education, Office of Postsecondary Education. (1999). Title IV/Federal Pell Grant Program 1998–99 End of Year Report. Washington, DC: Author.