A College Financial Aid Model For Private K-12 Students

One of President Bush’s education initiatives that would model private K–12 financing on a popular federal college financial aid program has sparked renewed debate about school vouchers and federal funding for private education.

Pell Grants for Kids, a proposed $300 million federal funding program for private K–12 education, would provide government-backed grants to low-income families to help them send their children to private, faith-based, or higher performing out-of-district public schools. The program’s philosophy is based on the notion that, like a college education, elementary and secondary education is best served when based on choice.

President Bush used his final State of the Union address at the end of January to call for congressional support of the Pell Grants for Kids initiative. The presidential behest drew immediate challenges from educators and politicians about the potential effectiveness of the program in the president’s push to privatize education.

Lawmakers questioned whether the Pell Grants for Kids program actually implements school vouchers rather than grants and whether the proposed $300 million budget would be enough for participating low-income parents to avoid having to seek supplemental private student loans (http://www.nextstudent.com/) or other financial aid that resembles college loans (http://www.nextstudent.com/private_loans/private_loans.asp).

Pell Grants for Kids vs. College Pell Grants: Considerations Besides Financial Need

The Pell Grants for Kids program follows in the shoes of its college sibling by providing education funding that, unlike other forms of federal financial aid, such as parent or student loans (http://www.nextstudent.com/student-loans/student-loans.asp), doesn’t need to be repaid.

Both programs also target low-income students in situations of extreme financial need.

Pell Grants for Kids awards, however, would differ from postsecondary Pell Grants by going beyond financial need to also consider a student’s educational environment in determining eligibility:

Students from schools that fail to meet the performance requirements of the No Child Left Behind Act are the primary targets of the Pell Grants for Kids program.

Pell Grants for Kids would be aimed at eligible low-income students enrolled in high schools with graduation rates less than 60 percent or in elementary and secondary schools that have failed to meet No Child Left Behind performance standards for five years.

School Vouchers Masquerading as Grants?

Although the administration has gone to great lengths to brand Pell Grants for Kids a “scholarship program,” even taking the name of the long-running federal college Pell Grant program, the bipartisan support behind college Pell Grants has been noticeably lacking from the president’s Pell Grants for Kids proposal.

Many Democrats claim Pell Grants for Kids aren’t simply scholarships but school vouchers being pitched to the public as grants.

Democratic Sen. Edward Kennedy of Massachusetts has come out aggressively against the president’s proposal. Sen. Kennedy, who chairs the Health, Education, and Labor committee, criticizes the Pell Grants for Kids initiative for failing to “expand educational opportunity,” contrary to its proffered goal.

Instead, says Sen. Kennedy, Pell Grants for Kids will “siphon scare resources from our public schools to create new voucher programs.”

On the other side of the aisle, Republican Sen. Lamar Alexander of Tennessee doesn’t argue against the characterization of Pell Grants for Kids as a voucher program but rather maintains that vouchers do work.

Sen. Alexander points to highly successful federal voucher programs — including college Pell Grants, federal student loans (http://www.nextstudent.com/), the GI Bill, and daycare certificates — as examples of why he believes in the success potential of Pell Grants for Kids.

In fact, Sen. Alexander has proposed a Pell Grants for Kids budget of $15 billion — a budget 50 times higher than the president’s proposed $300 million.

Tuition Outstrips Federal Aid: The Math Behind Pell Grants for Kids

In either scenario, whether an approved budget for Pell Grants for Kids were to be the president’s proposed $300 million or Sen. Alexander’s $15 billion, individual grant awards would likely not be enough to cover the full cost of K–12 private school tuition.

Here are a few numbers to consider:

$20. The Pell Grant amount each of the country’s 15 million low-income children enrolled in public schools would receive under the president’s proposed $300 million budget.

$500. The Pell Grant amount each of the country’s 30 million low- and middle-income children enrolled in public schools would receive under Sen. Alexander’s proposed $15 billion budget.

$4,689. The average annual cost of tuition at private K–12 schools nationwide, according to a 2006 report by the National Center for Education Statistics.

120,000. The number of children under President Bush’s plan who would receive a $2,500 Pell Grant — less than 1 percent of the total number of low-income children currently enrolled in public schools.

6,000,000. The number of children under Sen. Alexander’s plan who would receive a $2,500 Pell Grant — 20 percent of the total number of low- and middle-income children currently enrolled in public schools.

Whether Pell Grants for Kids should actually be regarded as vouchers rather than as scholarships akin to college Pell Grants, it seems that the K–12 Pell Grants for Kids will still share with college Pell Grants an award amount that, in most cases, can’t cover tuition costs: College Pell Grants are capped at $4,310 for the 2007–08 academic year, while in-state tuition and fees at four-year public colleges averaged $6,185 for 2007–08.

Private Loans for K–12 Programs

In the same way that students with college Pell Grants must often supplement their grant award with work-study and federal student loans, the low-and middle-income families who would qualify for a Pell Grant for Kids may need to turn to other financial aid options to help meet the full cost of private K–12 tuition.

Parents of elementary and high-school students in private programs can generally apply for credit-based K–12 private student loans (http://www.nextstudent.com/private_loans/private_loans.asp) similar to the private student loans available to undergraduate and graduate students.

However, college and graduate students are encouraged to seek out federal college loans (http://www.nextstudent.com/) and graduate student loans before turning to private student loans, which are typically not as low-cost as federal loans. There are currently no such federal K–12 parent or student loans available as a low-cost alternative to K–12 private loans for families needing to supplement the money they would receive through the Pell Grants for Kids program.