Accelerating College Knowledge: A Fiscal Analysis of a Targeted Early Commitment Pell Grant Program

The persistently low college attainment rates of youth from poor families are partly attributable to their uncertainty about college affordability. The current federal financial aid system does not provide specific information about college costs until just before college enrollment and the information is only available to students completing a complex application. Evidence suggests this late timing reduces their motivation and ability to adequately prepare for college. This paper evaluates the fiscal consequences of instead making an early commitment of the full Pell Grant to eighth graders from needy families, using a simplified eligibility process. Analyses conducted using the Panel Study of Income Dynamics suggest the predicted costs are low relative to the benefits estimated using prior research findings. A simulation of the estimated fiscal effects indicates that Pell program costs would grow by approximately $1.5 billion annually and the benefits would exceed the costs by approximately $600 million.