With so much focus on rising college costs, it's easy to forget that some students receive more state and federal financial aid than they need to pay tuition and fees. Federal Pell Grants include money to help students meet their living expenses, and low-income students, enrolled full time at inexpensive community colleges, can receive a substantial check after their tuition bills are paid.
President Obama would like to require colleges with high dropout rates to parcel out aid refunds in installments, in order to decrease the number of Pell dollars lost when students drop out. Researchers hope that disbursing extra aid this way, similar to a paycheck, could also help students manage their money and give them an extra incentive to stay in school.
Nonprofit research organization MDRC has tested the "Aid Like a Paycheck" concept at two community colleges. "The vast majority of students have said, 'Oh, this makes perfect sense,' " says Evan Weissman, operations associate at MDRC. But it's not yet clear whether the new disbursement method will help students make it to graduation.
During the 2011-12 academic year, the federal government spent $33 billion on Pell Grants for nearly 9.5 million students. The number of community-college students who receive Pell Grants has almost doubled since 2006, according to the American Association of Community Colleges. In 2011-12, 37 percent of Pell Grant beneficiaries were community-college students. In 2011, 44 percent of public two-year college enrollees were nonwhite, according to the National Center for Education Statistics.