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Current formulas for awarding federal student financial aid are based primarily on income and don’t fully account for wealth inequality, especially by race. Students from low-income and low-wealth families—who are disproportionately Black and Latine—often have to take out more student loans to attend college. Inevitably, without family wealth to lean on, these students often struggle to pay back their loans and achieve financial security.
In a new collaborative report with TICAS, researchers from the Higher Education, Race, and the Economy (HERE) Lab at the University of California, Merced offer a policy solution: a supplemental Wealth-Based Pell Grant to help eliminate racial disparities in student loan borrowing and make debt-free college a reality for many more students.
The analysis suggests that implementing Wealth-Based Pell for students with family wealth under $500 could enable one million more full-time students—including nearly two-thirds of Black students—to attend college debt-free in their first year.
Learn more about how Wealth-Based Pell can be layered onto existing Pell eligibility, would not require changes to the FAFSA, and could transform college affordability for students from low-wealth backgrounds.
