What's Behind Sharp 23.7% Increase In Pell Grants In 2008-09?

The short answer:  more recipients getting larger grants.  I ran some numbers off of the FSA Data Center site to analyze Pell Grant trends over the past three years:

Academic Year	Recipients	Disbursements	$/Recipient
2008-09	6,259,471	$18,139,589,869	$2,898
2007-08	5,684,582	$14,666,078,963	$2,580
2006-07	5,289,141	$12,791,917,984	$2,419
Year-Over-Year Growth
2008-09	10.1%	23.7%	12.3%
2007-08	7.5%	14.7%	6.7%
School Mix	2008-09	2007-08	2006-07
Public	62.1%	63.6%	64.8%
Proprietary	23.5%	20.9%	19.3%
Private	14.4%	15.5%	15.9%

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Insights: 

• The 23.7% increase in Pell Grant disbursements for 2008-09 was driven by a 10.1% increase in recipients to 6.3 million and a 12.3% increase in the average grant size to $2,898. 
• Proprietary schools saw the sharpest increase in Pell Grant disbursements over the past three years, rising from a 19.3% share of Pell Grants in 2006-07 to 23.5% in 2008-09. 

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Here are top 10 institutions in terms of Pell Grant disbursements for 2008-09: 

School	Type	Recipients	Disbursements
UNIVERSITY OF PHOENIX	PROPRIETARY	230,774	$656,887,575.50
KAPLAN UNIVERSITY	PROPRIETARY	44,212	$111,748,910.91
DEVRY UNIVERSITY	PROPRIETARY	39,736	$105,175,080.00
ASHFORD UNIVERSITY	PROPRIETARY	28,438	$76,060,391.84
INSTITUTO DE BANCA Y COMERCIO	PROPRIETARY	19,444	$65,704,557.62
BAKER COLLEGE	PRIVATE-NONPROFIT	23,807	$56,787,106.00
PENNSYLVANIA STATE UNIVERSITY (THE)	PUBLIC	16,598	$51,761,435.95
VIRGINIA COLLEGE	PROPRIETARY	16,838	$49,801,884.08
UNIVERSIDAD DEL TURABO	PRIVATE-NONPROFIT	13,010	$47,657,986.63
COLORADO TECHNICAL UNIVERSITY	PROPRIETARY	19,980	$47,583,568.82

Comments

[SRobert]

I am not sure what this is telling us. Certainly overall enrollment has gone up for all school types with the lion’s share of the increase in proprietary schools. If you look at the demographics of students that choose proprietary over public/private not-for-profit you will see that they tend be less well off financially (see the new GAO report titled “Proprietary Schools: Stronger Department of Education Oversight Needed to Help Ensure Only Eligible Students Receive Federal Student Aid.” The increase in Pell recipients is just a leading indicator to a more important question that: why is enrollment at proprietary schools increasing at a faster pace than at public/private not-for-profit institutions?

[Carol R.]

I have no scientific data to back up my impression of why enrollment is increasing at a faster pace at proprietary schools than at public/private/not for profit institutions. However, I do believe that the proprietary schools make promises that the other institutions don't. For example, I have heard from students that the proprietary schools promise the student will be trained in a relatively short period of time (less than 2 years, sometimes 6 months)and ready for gainful employment, sometimes with job placement guarantees. How can the traditional 4 year, or even 2 year community colleges, compete with that?