Pell Grant Changes Hurt Southern College Students, University Of Alabama Study Finds

02/14/2013 07:30 pm ET | Updated Feb 16, 2013

A new study released this week found that changes in eligibility for Pell Grants, designed to help low-income students afford college, have greatly impacted students in some of the poorest and least-educated states in the nation.

Thanks to congressional budget fights in 2011, the federal government reduced eligibility for the grants, cutting eligibility time from 18 semesters to 12 and eliminating grants for summer study.

Conducted by the University of Alabama's Education Policy Center, along with professors from Mississippi State University and Iowa State University, the study examined the impact of the eligibility changes in Alabama, Arkansas and Mississippi.

As a result of the new restrictions on Pell grants, the study found that enrollment declined at 47 of the 62 two-year colleges in those three states. The researchers also found that because of the changes, 5,000 students lost Pell eligibility in fall 2012, with nearly 17,000 more students slated lose it this year.

The study concluded that year-round Pell Grants improve completion rates. It comes at a time when other recent studies have suggested that America has a "college dropout crisis."

Among college financial aid administrators, 88 percent said they'd prefer a lower maximum Pell Grant amount in exchange for fewer restrictions on how students use the money, the UA study found.

Based on U.S. Census data of residents over 25 with a college degree, Mississippi is second only to West Virginia for the country's least-educated state. Arkansas is third, and Alabama falls in sixth place. Mississippi is the poorest state in the nation, according to a U.S. News & World Report analysis of data from the Census Bureau and Bureau of Labor Statistics, with Arkansas coming in second. Alabama is the ninth poorest state, U.S. News & World Report found.

Pell Grants currently cover the smallest portion of the cost of college in the program's history.

According to the National Center for Education Statistics, Pell recipients are more likely to be female, non-white and first in their family to attend college.

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