Federal Student Aid: Expanding Eligibility for Less Than Halftime Students Could Increase Program Costs, But Benefits Uncertain
Published: 2003-09-10T00:00:00

Fast Facts:

Highlights:
section_title: Why GAO Did This Study
paragraphs: Despite the availability of federal, state, and other sources of student aid, concerns have been raised that adult undergraduates--those 24 and older--receive inadequate assistance in meeting the costs of postsecondary education, particularly those adults who take one to five credits per term (or less than halftime). These concerns have been raised because less-than halftime adult students are unable to participate in the largest federal student loan programs, the Stafford Loan programs, and they are eligible to receive only one of the two federal higher education tax credits, the Lifetime Learning tax credit. To better understand the needs of these adult students, GAO was asked to identify (1) the extent to which adults enroll less than halftime, the characteristics and factors associated with less-than- halftime enrollment, and the rates of completion among these students; (2) the extent to which adult students enrolled less than halftime receive federal, state, and other assistance to help them meet the cost of postsecondary education; and (3) the implications, including the budgetary impact, of changing the Pell Grant Program to allow less-than-halftime students to count room and board costs and personal expenses in their application for federal financial aid, and changing the Stafford loan programs to permit participation by less-than-halftime students.
section_title: What GAO Found
paragraphs: In the 1999-2000 school year, 2.3 million adults enrolled in undergraduate education on a less-than-halftime basis, many seeking to balance school with other responsibilities. Compared with other adult students, the typical less-than-halftime adult student was more likely to work fulltime, be married, and have a household income over $30,000. Though 3 out of 4 less-than-halftime adult students expect to complete a degree or certificate program when they begin their education, most leave school without completing one. About 70 percent of less-than halftime adult students received some assistance--about 44 percent of their schooling costs--typically from sources other than federal or state student aid. The sources of assistance they received varied by household income: lower-income adult students enrolled less than halftime relied primarily upon student financial aid in meeting school costs, while higher-income households were assisted primarily by work-related sources such as the Lifetime Learning tax credit or employer assistance. We estimate that proposed changes to the Pell Grant programs would cost the federal government a minimum of $25 million for the 2003-2004 school year. Allowing less-than-halftime students to participate in the Stafford Loan programs would cost about $113 million per year. College administrators expressed reservations about expanding Stafford Loan eligibility due to concerns about increasing default rates. In commenting on our draft report, Education noted that they found it to be thorough and useful.

section_title: Letter
paragraphs: To help them meet the costs of higher education, the nation’s  postsecondary students received approximately $85 billion in grant and  loan assistance from federal student aid programs, state student aid  programs, and postsecondary institutions in academic year 2001-2002.  Additional assistance in meeting the costs of postsecondary education was  available from work-related sources of support, such as the Lifetime  Learning tax credit and employer assistance. Despite these sources of  assistance, some suggest that nontraditional students—particularly adult  students—receive inadequate support to help them meet the costs of  undergraduate postsecondary education. There is particular concern  about low-income adult students, who may be enrolled with the hope of  improving their prospects for higher wages and career advancement.
Advocates for adult students note that many adults enroll on a less-than- halftime basis and are consequently disadvantaged in obtaining financial  support. For example, less-than-halftime students, those taking one to five  credits, are not eligible to participate in the federal Stafford student loan  programs. Moreover, though they are eligible to participate in the largest  federal student grant program, the Pell Grant program, no allowances are  made for their room, board, and miscellaneous personal expenses in the  calculation of grant amounts, as is done for students enrolled halftime or more. Furthermore, less-than-halftime students who are tax filers may  reduce their federal income tax liability through the use of the Lifetime  Learning tax credit, but they are ineligible to claim the other federal higher  education tax credit, the HOPE credit. And, although less-than-halftime  students are eligible to participate in the federal campus-based aid  programs—Supplemental Educational Opportunity grants, Perkins loans,  and federal work-study aid—the institutions they most often attend  receive a small share of these funds. Finally, advocates suggest, the  Workforce Investment Act (WIA) of 1998 and the Temporary Assistance to  Needy Families (TANF) program authorized by the Personal  Responsibility and Work Opportunity Reconciliation Act (PRWORA) of  1996 chiefly focus on immediate employment or short-term training and,  therefore, provide little assistance to adults who seek to obtain a  postsecondary credential.
In preparation for the upcoming reauthorization of the Higher Education  Act of 1965, you asked us to examine issues concerning adult students,  which, for the purposes of this report, are those who are 24 years or older.  In particular, you asked us to determine (1) the extent to which adults  enroll less than halftime, the characteristics and factors associated with  less-than-halftime enrollment, and the rates of completion among these  students; (2) the extent to which adult students enrolled less than halftime  receive federal, state, and other assistance to help them meet the costs of  postsecondary education; and (3) the implications, including the  budgetary impact, of changing the Pell Grant program to allow room and  board and miscellaneous personal expenses to be considered in the  calculation of grant amounts for less-than-halftime students, and changing  the Stafford loan programs to permit participation by less-than-halftime  students.
To answer question one, we analyzed two datasets created by the  Department of Education’s National Center for Education Statistics: the  1999-2000 National Postsecondary Student Aid Study (NPSAS), and the  2001 Beginning Postsecondary Students Longitudinal Study (BPS). The  two datasets contain a nationally representative sample of students  enrolled at postsecondary institutions participating in federal student aid  programs and provide information on financial assistance they received,  hours they worked, and a wide range of other characteristics. We also  interviewed administrators of 19 postsecondary institutions, 18 of which  we visited. These included both public and private institutions and 2-year  and 4-year institutions located in four states: California, Maryland, Ohio,  and Virginia. We met with a range of administrators at these institutions.  We discussed with them the factors associated with less-than-halftime  enrollment among adult students, and from 10 of these institutions we  obtained data on less-than-halftime enrollment and completion among  adult students. To answer question two, we analyzed data from the  NPSAS, surveyed states about financial aid for less-than-halftime students,  and interviewed postsecondary administrators. To answer question three,  we reviewed the Federal Student Aid Handbook, and used data from  NPSAS. Education officials provided us with information on federal  subsidy rates for Stafford loans and reviewed our estimation methodology.  Appendix I provides details on the study’s scope and methodology.  Because NPSAS and BPS are samples, there is sampling error associated  with estimates obtained from them. These sampling errors are reported in  appendix II. We did our work from October 2002 to August 2003 in  accordance with generally accepted government auditing standards.
subsections: section_title: Background
paragraphs: Each year millions of adults participate in organized learning in the United  States, in a wide range of venues. In 1999, an estimated 90 million persons  16 and older reported that they had participated in some sort of formal  learning activity, ranging from personal development courses—such as  family genealogy or cooking classes—to apprenticeship and advanced  degree programs. Much of this learning takes place outside of formal  credential programs that confer a certificate or degree—-most often in the  workplace, where employers offer classes for job-specific skills, or in the  many courses offered by postsecondary institutions that are not part of a  credential program, such as a continuing education class. Enrolling in a  certificate or degree program at a postsecondary institution is an  important opportunity, however, for millions of adults who seek personal  growth, or advancement in their working lives.
subsections: section_title: Characteristics of Adult Undergraduate Students
paragraphs: In the 1999-2000 academic year, an estimated 7.1 million adults were  enrolled as undergraduates in the nation’s postsecondary institutions,  comprising about 40 percent of all undergraduate students. About three- quarters of these adult undergraduates were between the ages of 24 to 40,  while about one-quarter were 41 or older. Compared with undergraduate  students under the age of 24, adult students enrolled in 1999-2000 were  more likely to be working full time (35 or more hours per week), to be  married, to have dependents, and to lack a conventional high school  diploma. (See table 1.)
While the majority of undergraduates under the age of 24 were enrolled in  baccalaureate programs, adult undergraduate students were primarily  enrolled in certificate or associate programs in 1999-2000. Most adult  students (55 percent) were enrolled at 2-year public institutions, while  another 22 percent were enrolled in a public 4-year institution, and 10  percent were enrolled in private 4-year institutions. The remaining adult  students were enrolled at proprietary schools, such as culinary or beauty  schools, or a combination of different types of institutions.
section_title: A Range Of Public And Private Funding Sources Assist Adults In Meeting Educational Costs
paragraphs: A range of public and private funding sources is available to adults to  assist them in meeting the costs sometimes associated with formal  learning, including employer-provided educational assistance, federal  student aid programs authorized under Title IV of the Higher Education  Act, higher education tax credits, and federal WIA and TANF funds.
subsections: section_title: Federal Financial Aid Available to Adult Undergraduate Students under Title IV of the Higher Education Act
paragraphs: In the 1999-2000 academic year, adult students received about $3.3 billion  in grant assistance and $8.5 billion in loan assistance from programs  authorized under Title IV of the Higher Education Act. To receive federal  financial aid, students must meet several eligibility requirements, including  being enrolled in a degree or certificate program, and maintaining  satisfactory academic progress. Institutions are required to establish  qualitative and quantitative criteria of satisfactory progress, and to  monitor student progress. Taken together, these requirements help to  ensure that Title IV funds are used in ways that benefit both students and  the larger public, rather than purely recreational or leisure activities.  Postsecondary institutions must also meet eligibility requirements to  participate in Title IV programs, including legal authorization by the state  in which they offer postsecondary education, accreditation by a nationally  recognized accrediting agency, and limiting regular admission to  individuals with a high school diploma or its recognized equivalent.Institutional eligibility requirements help to ensure that participating  institutions provide students with quality education or training.
Programs authorized under Title IV include Pell Grants for low-income  students and Stafford Loans. Stafford loans may be either subsidized or  unsubsidized. If the loan is subsidized, the federal government pays the  interest cost of the loan for the time a student is enrolled in school. If the  loan is unsubsidized, the borrower is responsible for paying interest during  the life of the loan. Title IV also authorizes programs funded by the federal  government and administered by participating higher education  institutions, commonly known as campus-based aid—Supplemental  Educational Opportunity grants, Perkins loans, and federal work-study aid.
Students who apply for Title IV aid must do so using the Free Application  for Federal Student Aid (FAFSA). Information from the FAFSA is used to  determine the amount of money that the adult student is expected to  contribute to his or her own education, called the expected family  contribution (EFC). Statutory definitions establish the criteria that  students must meet to be considered independent of their parents for  purposes of financial aid, and statutory formulas establish the share of  income and assets that are expected to be available for the student’s  education. Once the EFC is established, it is compared to the cost of  attendance at the institution chosen by the student. As table 2 indicates,  the elements included in the student’s cost of attendance for the purpose  of calculating the Pell Grant award vary according to the extent of their  enrollment.
If the EFC is greater than the cost of attendance, the student is not  considered to have financial need for federal Title IV aid programs. If the  cost of attendance is greater than the EFC, then the student is considered  to have financial need. Pell Grant awards are calculated by subtracting the  student’s EFC from the maximum Pell Grant award. Maximum Pell Grant  awards are prorated by the student’s enrollment intensity: students  attending less than halftime are eligible to receive one-quarter of the  maximum Pell Grant award. In 1999-2000, the maximum Pell Grant award  was $3,125 for fulltime students, while the maximum award for a less-than- halftime student was $781. The maximum subsidized Stafford loan award  is equal to the student’s calculated financial need, subject to statutory  limits on annual and cumulative borrowing. The maximum unsubsidized  Stafford loan award is equal to the student’s cost of attendance, subject to  statutory limits on annual and cumulative borrowing.
section_title: State, Institutional, and Other Federal Sources of Financial Assistance Available to Adult Undergraduate Students
paragraphs: Adult students also received financial aid from states, postsecondary  institutions, and other federal sources. In 1999-2000, states awarded a  total of $975 million to adult students enrolled in undergraduate education,  typically on the basis of estimated financial need. However, about half of  the states did not have aid programs in which adults enrolled less than  halftime were eligible to participate. Postsecondary institutions awarded  $941 million in aid to adult undergraduate students in 1999-2000, often on  the basis of considerations other than financial need. Sources of federal  assistance other than Title IV aid were available to adult undergraduates,  the largest of which was Montgomery GI Bill assistance. About $1 billion  was available to the nation’s veterans and eligible service members  through the Montgomery GI Bill.
section_title: Work-Related Financial Assistance Available to Adult Undergraduate Students
paragraphs: Financial assistance was also available to adult students from work- related sources—through two federal higher education tax credits and  from employer-provided educational assistance. Employers may pay  postsecondary educational expenses directly, or indirectly through  employee reimbursement, and they are encouraged to do so by the federal  tax code, which provides favorable tax treatment for these benefits. In  1999-2000, employers provided $1.28 billion in assistance to adult students  enrolled in undergraduate postsecondary education, most often to those  workers who were most likely to increase company productivity or  profitability as a result of their education, such as high-skill, high-demand  workers and managers.Employees were usually required by employers  to meet a number of conditions to obtain this educational assistance—  such as a minimum length of service—but were not obligated to enroll in  degree or certificate programs, or to complete their studies. Assistance  was also available to students through two federal higher education tax  credits, the HOPE and Lifetime Learning tax credits. Tax filers on their  own behalf, or on behalf of a spouse or dependent may claim both credits,  and both are nonrefundable: if the filer has no tax liability, they cannot  receive the credit. Eligibility for the HOPE credit is limited to students  who are enrolled halftime or more in a degree or certificate program, and  in their first 2 years of postsecondary education. In contrast to both the  HOPE tax credit and the Stafford student loan programs, the Lifetime  Learning tax credit may be used by tax filers who enroll for any number of  credits, and for any course that aids in learning new or improving existing  job skills, including those that are not part of a degree or certificate  program. Additionally, tax filers may use the credit for as many years as  they are enrolled, without regard to degree progress or completion. Tax  filers use all qualified tuition and fees—minus any tax-free educational  assistance received—to compute the credits. In 1999-2000, all of the first  $1,000 and half of the next $1,000 of qualified education expenses per  student could be used to compute the HOPE credit, for a maximum credit  of $1,500. In 1999-2000, each tax filer could use 20 percent of the first  $5,000 in qualified educational expenses to compute the Lifetime Learning  credit for a maximum credit of $1,000. The Lifetime Learning credit  permits tax filers to combine their own expenses and those of their spouse  and dependents. For taxpayers filing jointly, both credits were initially  phased out at $80,000 adjusted gross income, and fully phased out at  $100,000.
section_title: Assistance to Adult Undergraduate Students Under WIA and PRWORA
paragraphs: Federal programs authorized by WIA and PRWORA may also provide  some adults with assistance in meeting the costs of postsecondary  education. Under WIA, adults and dislocated workers may be eligible to  receive job training after it is determined that they are unlikely to get a job  leading to self-sufficiency without such training. WIA funds may be used  for postsecondary training only for expenses remaining after the receipt of  Pell Grant and other sources of assistance. Furthermore, state and local  workforce investment boards are authorized to establish limits on the  amount of time or the amount of WIA funds that may be used to meet  training expenses. Under PRWORA, block grants are made to states, which  may use these funds to assist TANF recipients in meeting costs associated  with vocational training or education, including postsecondary education.  These costs may include tuition and fees, childcare, and transportation.
section_title: Most of the 2.3 Million Adult Undergraduate Students Who Enrolled Less Than Halftime Needed to Balance School and Other Responsibilities, and Many Were Unable to Complete Their Programs
paragraphs: In 1999-2000, one-third of adult undergraduate students, about 2.3 million,  enrolled less than halftime, and most worked fulltime and needed to  balance the demands of school with other responsibilities. Most adults  who enroll as less than halftime students intend to complete a degree or  certificate, but few do. Compared with adult students enrolled halftime or  more, the typical less-than-halftime adult student was older, more likely to  be working and married, and had a higher household income. In addition,  less-than-halftime students more often enrolled without being in a degree  program, and less often pursued a baccalaureate degree. Although less- than-halftime enrollment may permit adults to complete one or two  courses helpful to their employment prospects, such enrollment appears  to be an ineffective long-term strategy for the majority of less-than- halftime adult students who intend to complete a degree. Of those adults  who expected to complete a certificate or degree and enrolled on a less  than halftime basis during their first year of school, most had not  completed a degree or certificate, and were no longer enrolled in school.
subsections: section_title: One-Third of Adult Undergraduate Students Enrolled Less Than Halftime, and Those Who Did Differed from Other Adult Students
paragraphs: In 1999-2000, one-third, about 2.3 million, of adult undergraduate students  were enrolled less than halftime. As shown in figure 1, other adult students  were either enrolled fulltime (12 or more credits), half- or three-quarters  time (6-11 credits), or were in a combination of different enrollment types (mixed).
Compared with adult students enrolled halftime or more, less-than- halftime adult students were older, and more likely to be working fulltime,  be married, and have dependents. In addition, less-than-halftime adult  students more often enrolled in 2-year postsecondary institutions, and less  often pursued a baccalaureate degree. Less-than-halftime adult students  had, on average, higher household incomes than did other adult students.  (See table 3.)
A substantially larger proportion of adults who enrolled on a less-than- halftime basis had household incomes over $30,000 than did adults  enrolled halftime or more. (see figure 2).
An estimated 7 percent of all adult students enrolled less than halftime in  1999-2000 had household incomes at or below 100 percent of the federal  poverty guideline, which for a three-person household in 1998 was $13,650.  An estimated 14 percent had household incomes at or below 150 percent  of the federal poverty guideline, or $20,475 for a three-person household.
section_title: School Administrators Believe Students May Choose Less-Than- Halftime Enrollment for Many Reasons—Most Commonly to Balance Work, Family, and School
paragraphs: Adult students choose to enroll on a less-than-halftime basis for many  reasons, the most important of which, most school administrators told us,  is their need to balance school requirements with the competing demands  of work and family. This closely reflects the findings of studies that  examine postsecondary enrollment among adults. School administrators  explained that the balancing act required of many adult students, in which  they attempt simultaneously to meet family responsibilities and work  obligations, left many adults with too little time to be a fulltime student.  The routines of adult life—from caring for sick children to meeting  unexpected job demands—compete with class attendance and the  completion of course assignments, according to these administrators.  Faced with this “juggling act” some adult students may have to pursue  postsecondary education on a less-than-halftime basis.
College administrators we contacted also identified several other  significant reasons why adult students may enroll on a less-than-halftime  basis, including the difficulty meeting the direct costs of school,  scheduling conflicts, and students’ limited readiness for postsecondary  education. Virtually all administrators identified these as important, but  secondary, reasons. While many adult students receive some financial  support towards postsecondary costs, most students pay the majority of  school costs from their own resources. Because adult students may find it  difficult to economize on housing costs by searching for less expensive  accommodations or group housing, enrolling less than halftime can  provides them with a way to reduce out-of-pocket costs associated with  tuition and fees—as well as transportation, childcare, and books.
Scheduling conflicts also played a role, according to college  administrators, in influencing enrollment decisions. Officials noted that  adult students, especially working students, may be unable to enroll on a  halftime or fulltime basis due to the inflexibility of course and program  options made available by postsecondary institutions, or a lack of  flexibility in work schedules on the part of employers. While some  postsecondary institutions offered the majority of their classes during  nontraditional hours, such as evenings or weekends, others did not. For  example, administrators at one 4-year school estimated that only 10  percent of the undergraduate courses were offered during evening hours.  Adults may find it easier to plan and manage their schedules over 5 to 7  weeks than they do over longer time periods, such as a traditional 10 or 15- week semester. At another institution, administrators noted that 3,000  course sections were offered each semester, but only 10 were available to  adults in a shorter 5 to 7 week format, owing to reluctance of faculty to  teach in alternative times and formats. Administrators at one community  college pointed to a lack of flexibility in employer work schedules, noting  that adult students often withdraw from class when their employer  changes their work schedule, preventing them from attending class.
School administrators explained that some adults might not be ready—  academically or socially—for postsecondary education, and that this may  contribute to their decision to enroll less than halftime. Adult students  often need to refresh or develop college-level skills, they noted,  particularly in mathematics. Adult students may also lack confidence in  themselves or their abilities, or feel out of place in a college setting. One  administrator noted that some adult students at her institution  experienced stress-related illnesses after they had begun their coursework  and needed to leave mid-semester. National data indicate that adults  enrolled on a less than halftime basis are more likely to be encountering  academic difficulties than other adult students, as reflected in their lower  grade point averages.
section_title: Most Adults Who Enrolled as Less-Than-Halftime Students Expected to Complete a Certificate or Degree, But Did Not
paragraphs: National data indicate that most adults who enrolled on a less-than- halftime basis during their first year of postsecondary education expected  to complete a degree or certificate, but six years later the majority had left  school with no credential. Moreover, data provided by postsecondary  institutions included in our review show that few adults who succeeded in  completing a certificate or degree consistently enrolled on a less-than- halftime basis. Some adults who enroll in credit-bearing courses at  postsecondary institutions may not intend to complete a degree or  certificate; rather, they may choose to complete only a few courses,  finding this sufficient to acquire the skills that help them gain employment,  obtain a promotion, or find personal satisfaction. Data from Education’s  1995-1996 Beginning Postsecondary Students (BPS) study, which tracked  the academic progress and degree completion of students over a 6-year  period from 1995-1996 to 2001-2002, show that 25 percent of adults who  enrolled on a less than halftime basis during their first year of  postsecondary education did not expect to complete a degree or  certificate. The remaining 75 percent, however, did.
Most adults who intended to complete a degree or certificate and enrolled  on a less-than-halftime basis during their first year of postsecondary  education left school without completing a degree or certificate. Using the  BPS study, we analyzed completion among those students who first  enrolled at age 24 or older, who expected to complete a certificate,  associate’s degree, or baccalaureate degree, and who enrolled on a less  than halftime basis one or more times during their first year of  postsecondary education. We estimate that about two-thirds (66 percent)  of adults who began in 1995-1996 did not complete a certificate or degree  by 2001-2002, and were no longer enrolled in postsecondary education. In  comparison, only about 30 percent of adults who enrolled as halftime or  fulltime students in their first year of school had left school without  completing a degree or certificate.
At those institutions that provided completion data to us, adult graduates’  reliance upon less than halftime enrollment varied with program length. Of  the 1,830 baccalaureate graduates who completed their degrees in 2001- 2002 at four 4-year institutions we visited, and who when they first  enrolled were age 24 or older, slightly more than one-half never enrolled  on a less-than-halftime basis, and another 36 percent did so for only one or  two terms. No graduates relied exclusively upon less-than-halftime  enrollment to complete their degree. (See fig. 3.)
Of the 1,927 students who completed an associate degree in 2001-2002 at  four 2-year institutions we visited and who first enrolled at age 24 or older,  almost one-half never enrolled as less-than-halftime students, or did so for  one or two terms. Only 3 percent consistently enrolled on a less-than- halftime basis. (See fig. 4.) This pattern of enrollment was similar for the  348 students who completed a certificate program at three of the 2-year  institutions we visited.
section_title: Most Less-Than- Halftime Adult Students Received Some Assistance with Postsecondary Costs, Typically from Work- Related Sources
paragraphs: In 1999-2000, about 7 in 10 of the nation’s less-than-halftime adult students  received assistance equaling about 44 percent of their school costs,  typically from sources other than federal and state student aid. Though  less-than-halftime adult students had a range of household incomes, their  school costs and the amount of assistance they received did not vary  widely; however, the sources of assistance they received did vary by  household income. Student financial aid from federal, state, and  institutional sources comprised the majority of assistance received by  lower-income adults, while most assistance received by higher- income  households was provided by work-related sources. Very few adults  enrolled on a less-than-halftime basis seldom received assistance from  either federal WIA or TANF sources.
subsections: section_title: Seven in 10 Less-Than- Halftime Adult Students Received Assistance for School Costs—Most Often from Lifetime Learning Tax Credit and Employer Assistance
paragraphs: In 1999-2000, most less-than-halftime adult students received some  assistance with their postsecondary education or training costs, typically  from sources other than student financial aid. An estimated 70 percent of  less-than-halftime adults received assistance from federal, state, or other  sources with their postsecondary education or training costs, which are  estimated to have been, on average, $1,058 for all less-than-halftime adult  students in 1999-2000. About one-half of these costs were comprised of  tuition and fees ($480), while the remaining amount was comprised of  books, equipment, childcare, and transportation costs.
For those less-than-halftime adults who received assistance in 1999-2000,  the average amount was $462, or approximately 44 percent of their school  costs. Though the Lifetime Learning tax credit was the source of  assistance most widely received by less-than-halftime adult students, the  average Lifetime Learning tax credit ($74) was significantly smaller than  the average Pell Grant award ($465) or the average level of employer  support ($784).
section_title: Sources of Assistance Received by Less-Than- Halftime Adults Varied by Household Income, but Their School Costs and Amount of Assistance Were Similar
paragraphs: Few adults who enrolled less-than-halftime in 1999-2000 had incomes  below 150 percent of the federal poverty guideline, and those who did  received the bulk of assistance with their school costs from student  financial aid—in contrast to the majority of less-than-halftime adult  students who had incomes well above federal poverty guidelines and who  relied chiefly upon work-related sources of assistance to meet school  costs. Although the sources of assistance received by lower- and higher- income students were different, both groups had about the same school  costs and levels of assistance and, therefore, similar shares of their school  costs met through federal, state, or work-related assistance. In 1999-2000,  15 percent of less-than-halftime adults had a household income below 150  percent of the 1998 federal poverty guideline, while the vast majority of  these students had incomes above this level. Less-than-halftime adult  students with household incomes below 150 percent of the 1998 federal  poverty guideline had approximately 43 percent of their estimated $1,121  in school costs met through all forms of assistance, while those with  incomes above 150 percent of the federal poverty guideline had  approximately 44 percent of their estimated $1,048 in costs met through  assistance.
As figure 6 shows, a larger percentage of lower income less-than-halftime  adult students received Pell Grants than did students with incomes above  150 percent of the federal poverty guideline, while a smaller proportion  received work-related assistance, either from their employer or the  Lifetime Learning tax credit.
Among low-income, less-than-halftime adult students, educational costs  averaged just over $1,100, and about 14 percent of these students received  federal Pell Grants to assist them in meeting these costs. Adults who work  part-time receive employer financial assistance for enrollment in  credential programs less often than those who work fulltime. Compared  with higher-income less-than-halftime adult students, fewer low-income  students worked, and, if they worked, fewer were employed fulltime.  Consequently, a smaller percentage of low-income students received  employer assistance (9 percent) than did higher-income students (25  percent). Finally, about half of these low-income adult students had no  federal income tax liability and were, therefore, ineligible to receive a  Lifetime Learning tax credit. As a result, an estimated 29 percent of those  below 150 percent of the federal poverty guideline received a Lifetime  Learning tax credit.
While lower-income adult students received about two-thirds of their  assistance (66 percent) from federal, state, institutional, and other aid, the  opposite was true of higher-income adult students, who received 71  percent of their support from work-related sources assistance. In 1999- 2000, most adult students (85 percent) had incomes above 150 percent of  the federal poverty guideline. According to federal and state financial aid  rules, these adult students typically had incomes and assets that were  sufficient to meet their postsecondary costs and, therefore, only 1 percent  received either federal or state student aid. Most who had incomes above  this level were fulltime workers, and a larger share received both  employer assistance and Lifetime Learning tax credits than did their  lower-income counterparts.
section_title: WIA and TANF Assistance Was Rarely Received by Less-Than-Halftime Adults
paragraphs: We estimate that less than 1 percent of all less-than-halftime adult students  received either WIA or TANF assistance with the cost of postsecondary  education in 1999-2000. The population of less-than-halftime adult students  that received WIA funds for vocational training was too small to reliably  estimate the average amount of assistance they received in 1999-2000.
Very few less-than-halftime adult students received WIA assistance  because the WIA program focuses on employment-related assistance or  skills training, and generally does not support extended training of adult  students pursuing a postsecondary credential. At some of our visits to  postsecondary institutions, school officials informed us that they were  unfamiliar with WIA. However, those familiar with the program reported  that very few adult students were WIA recipients, and that the number of  adult students enrolled with assistance from WIA was lower than the  number enrolled with assistance under the previous federal workforce  policy, the Job Training Partnership Act. The time and dollar limits  established by local workforce investment boards may make it difficult for  adult students to use WIA funds for the extended training that may be  required for the completion of a postsecondary vocational credential, even  for those who are enrolled on a fulltime basis. As officials at one 2-year  postsecondary institution reported, many adult students entering  certificate programs needed 1 year of remedial coursework before  beginning their program and were, therefore, unable to complete their  coursework within the 1-year time limit established by the local workforce  investment board.
Less than 1 percent of less-than-halftime adult students received TANF  assistance in 1999-2000, and NPSAS collected no data on the extent to  which TANF funds assisted these students in meeting costs associated  with their training or education. Moreover, school officials at the  institutions we visited were generally unaware of the extent to which adult  students were TANF recipients. One school, however, had created a  program to enable TANF recipients to attend school fulltime. In Maryland,  the Baltimore City Community College and city and state officials  established the School Counts Program, through which selected TANF  recipients who enroll at the community college are provided with advising,  assistance with transportation and childcare expenses, and federal work  study assistance that permits them to maintain a full credit load  throughout the entire calendar year. These supports permit a relatively  large proportion of program participants to complete a certificate or  degree.
section_title: Changing the Pell and Stafford Programs Would Provide More Students With Additional Aid, but Result in Increased Federal Budget Costs and, Potentially, Undesirable Effects for Students and Institutions
paragraphs: Changing how the Pell and Stafford programs treat less-than-halftime  attendance would provide some less-than-halftime students with  additional aid, but it would likely increase program costs for the federal  government and administrative complexity for postsecondary institutions.  Proposed changes to the Pell Grant program include allowing, for less- than-halftime students, the inclusion of room and board and miscellaneous  personal expenses, as is done for fulltime students. Another proposed  change would be to allow less-than-halftime students to participate in the  Stafford Loan programs. Administrators of postsecondary institutions in  the four states we visited expressed concern about potential negative  consequences of the Stafford loan proposal.
subsections: section_title: Changes to the Pell Grant Program Will Increase Program Costs—Most Often Assisting Students Currently Receiving Pell Awards
paragraphs: Allowing, for all less-than-halftime students , the inclusion of room and  board and miscellaneous personal expenses in their cost of attendance, as  is done for other students, would increase the number of less-than- halftime students who receive a Pell grant and increase Pell award  amounts for those who already receive a grant. We estimate that about  13,000 less-than-halftime students who do not receive a Pell award under  current law would receive an average award of $630 under this alternative  in the 2003-2004 academic year. In addition, about 150,000 less-than- halftime students would receive a Pell Grant award increase of $111 per  year in 2003-2004. (See table 4.) The total federal budget cost of changing  Pell Grant policy for less-than-halftime students would be approximately  $25 million for the 2003-2004 academic year. This cost estimate assumes  that adults who are not enrolled in school will not choose to enroll in  response to the policy change. If about 35,000 individuals who are not in  school respond to this change in policy by enrolling less than halftime, an  estimate implied, in part, by some research, there could be an additional  federal budget cost of about $10 million in addition to the $25 million  associated with already enrolled students. (See app. III.)
section_title: Changes to the Stafford Loan Program Will Increase Program Costs and May Result in Disadvantages to Students and Institutions
paragraphs: While current law does not permit less-than-halftime students to  participate in the Stafford loan programs, some have proposed that these  students be allowed to participate. This change to the loan program would  increase federal subsidy costs associated with the Stafford programs.  Moreover, campus administrators anticipate that the change could have  undesirable effects on postsecondary institutions and on students.
Permitting all less-than-halftime students to participate in the Stafford loan  programs would increase federal subsidy costs associated with the  Stafford loan programs by approximately $113 million in fiscal year 2004.
We estimate that the average unsubsidized Stafford loan taken out by  adult students enrolled less-than-halftime would be approximately $680,  while the average subsidized loan would be about $1,200. Federal subsidy  costs in subsequent fiscal years would change depending upon the number  of students enrolled at eligible institutions, loan amounts per student, and  federal subsidy costs per loan dollar.
While administrators pointed to several potential benefits of providing  Stafford eligibility for less-than-halftime students, they far more often  pointed to a larger set of disadvantages—for both postsecondary  institutions and student borrowers—that might accompany this change.  Discussing potential benefits of expanding eligibility to include less-than- halftime students, they noted that changing the Stafford loan program  might permit less-than-halftime students to reduce their reliance on more  costly types of borrowing, or to reduce the extent to which they work to  finance their education. Additionally, some students might prefer—or  better cope with—enrollment as a less-than-halftime student, but are  encouraged by Stafford eligibility rules to take six or more credits. If  eligibility for the program were extended to less-than-halftime students,  this incentive for students to enroll for more credits would be removed.
Administrators, particularly those at public 2-year postsecondary  institutions, expressed the potential disadvantages associated with  expanding eligibility. They observed that expanding eligibility to less-than- halftime students might increase their institution's cohort default rate.  Students who do not complete a certificate or degree, research indicates,  are especially likely to default on their loans. In light of the low rates of  completion among less-than-halftime students, they reasoned, this  population might be at particular risk of defaulting on Stafford loans.  Institutional eligibility to participate in federal student aid programs is  linked to an institution's cohort default rate, and permitting borrowing by  less-than-halftime students could result in some institutions losing Title IV  eligibility. In addition, changing Stafford eligibility to include borrowers  enrolled less than halftime would, they anticipate, result in a large  expansion in the number of students participating in the Stafford loan  programs, increasing the administrative burden faced by campus financial  aid offices. Furthermore, at some postsecondary institutions, policies on  satisfactory academic progress may need to be revised in response to  changing Stafford eligibility.
Administrators also noted potential disadvantages to less-than-halftime  student borrowers. They expressed concern that Stafford borrowing by  lower-income adults enrolled less than halftime—few of whom might have  a certificate or degree and higher earnings as a result of their enrollment—  might burden these students with unmanageable debt. Allowing less-than- halftime students to borrow in the Stafford loan programs, they noted,  may also increase the number of students who reach their overall  borrowing limits before the completion of a degree. Finally, they indicated,  changing program eligibility may encourage protracted less-than-halftime  enrollment as a means by which to postpone repayment. Students with  outstanding subsidized Stafford loans must now enter repayment if they  enroll for fewer than six credits. However, if students were permitted to  defer repayment while enrolled for one to five credits, some might choose  to enroll for a few credits each term as a way to delay repayment.
section_title: Concluding Observations
paragraphs: There are a variety of formal learning opportunities open to adults, and a  range of funding sources that support participation in them. Some sources  of funding available to adult learners, particularly work-related assistance  provided by employers or the Lifetime Learning tax credit, permit short- term study that does not lead to the completion of a degree or certificate.  Both employers and employees may benefit as skills, productivity, and  earnings increase. In contrast to these funding streams, the federal student  assistance programs authorized under Title IV of the Higher Education Act  provide assistance for adult learning that takes place in eligible  postsecondary institutions, and is intended to result in the completion of a  postsecondary credential: a certificate, associate’s degree, or  baccalaureate degree. The Higher Education Act’s provisions concerning  institutional eligibility help to ensure billions of dollars in federal student  assistance is available only to those institutions that provide students with  quality education or training worth the time, energy, and money that  they—and the nation’s taxpayers—invest. Requiring that students enroll  in—and make progress toward—a postsecondary credential ensures that  the federal investment in Title IV programs is used to support learning that  is broadly beneficial to the public, rather than students’ recreational or  leisure activities.
Some adults who begin postsecondary education on a less than halftime  basis do not intend to complete a degree, and many others expect to do so,  but are unable to continue to completion. If less than halftime adults who  do not complete a credential nonetheless benefit from completing a few  postsecondary courses, then federal policy tools designed to support  shorter-term and non-credential adult learning—such as tax incentives for  employer-provided educational assistance and the Lifetime Learning tax  credit—can better assist these learners than can Title IV programs. The  potential costs—to the federal government, institutions, and students—of  proposed changes to the Pell Grant and Stafford Loan programs,  particularly the latter, may outweigh their potential benefits for less-than- halftime adult students. Permitting less-than-halftime students to  participate in the Stafford student loan programs would provide a new  source of borrowing for these students, but it may be accompanied by  unintended and unwanted consequences, including increasing the volume  of loans at risk of default. Allowing less-than-halftime students to include  room, board, and personal expenses in calculating their Pell Grant cost of  attendance would most often assist less-than-halftime students who are  currently receiving a Pell grant, providing them with an estimated $100  annual increase in assistance, rather than providing a widely available  source of assistance to adults who are not currently receiving Pell Grants.
section_title: Agency Comments
paragraphs: In written comments on our draft report, Education stated that it  appreciated our thorough review and examination of the financial, and  other, impediments that are often unique to adult learners as they pursue  postsecondary education and training opportunities and found useful the  concerns raised by postsecondary institutions.  In addition, Education  noted that the report would complement a recent report of its own and  that it would assist Education in achieving one of its departmental  strategic goals.  Education also provided technical comments, which we  incorporated where appropriate.  Education’s written comments appear in appendix IV.
As agreed with your offices, unless you publicly announce its contents  earlier, we plan no further distribution of this report until 30 days from its  date.  At that time we will send copies to the Secretary of Education and other interested parties. We will also make copies available to others on  request. In addition, the report will be available at no charge on the GAO  Web site at http://www.gao.gov.
If you or your staff have any questions or wish to discuss this material  further, please call me at (202) 512-8403, or Jeff Appel at (202) 512-9915.  Other contacts and staff acknowledgments are listed in appendix V.
section_title: Appendix I: Objectives, Scope, and Methodology
paragraphs: We were asked to determine: (1) the extent to which adults enroll less  than halftime, the characteristics and factors associated with less-than- halftime enrollment, and the rates of completion among these students;  (2) the extent to which adult students enrolled less than halftime receive  federal, state, and other assistance to help them meet the costs of  postsecondary education; and (3) the implications, including the  budgetary impact, of changing the Pell Grant Program to allow room and  board and miscellaneous personal expenses to be considered in the  calculation of grant amounts for less-than-halftime students and changing  the Stafford loan programs to permit participation by less-than-halftime  students. For the purposes of this report, adult students are those who are  24 years or older.
In designing our study, we reviewed data and literature pertaining to  financial aid for adult students and part-time students, and we analyzed  focus group findings examining the barriers to enrollment and persistence  faced by low-income adults. We interviewed officials at the Department of  Education, researchers, and representatives of higher education  organizations, such as the American Association of Community Colleges  and the National Association of Student Financial Administrators; and we  interviewed administrators of two institutions of higher education not  included in our four sample states: the City University of New York and  Kaplan College. We also reviewed studies and surveys of employer- provided educational assistance.
To determine the extent of less-than-halftime enrollment among adult  students and the characteristics, completion rates, and financial support  they received, we analyzed national data and visited selected  postsecondary institutions. We analyzed two datasets created by the  National Center for Education Statistics: the 1999-2000 National  Postsecondary Student Aid Study (NPSAS), and the 2001 Beginning  Postsecondary Students Study (BPS). Both datasets—NPSAS and BPS—  contained a nationally representative sample of students enrolled at  postsecondary institutions participating in federal student aid programs  and provided information on financial assistance they received, hours they  worked, and a wide range of other characteristics. We computed estimates  of the Lifetime Learning credits received by less-than-halftime adult  students using data from NPSAS. NPSAS data are collected at the  individual student level, and cannot be aggregated into families or linked  to tax filing status. Therefore, our analysis treated individual students as if  they were credit claimants and recipients.
To assess the reliability of the NPSAS and BPS sample data, we reviewed  existing information about the sample, including the documentation  produced by NCES, and performed electronic testing of the required data  elements to detect obvious problems in accuracy and completeness. We  determined that the NPSAS and BPS data were sufficiently reliable for this  report. Because both surveys are samples of a larger student population,  there is some sampling error associated with them. Sampling errors are  often represented as a 95-percent confidence interval: an interval that  95 times out of 100 will contain the true population value. The upper and  lower bounds of the 95-percent confidence intervals for each estimate are  presented in the tables in appendix II.
National datasets provide valuable but limited information. For example,  NPSAS is a cross-sectional rather than longitudinal study, and it, therefore,  cannot be used to identify the duration for which students enrolled on a  less-than-halftime basis. Some student characteristics or factors that may  be associated with less-than-halftime enrollment, such as course  scheduling problems, are not contained in these datasets. Consequently,  we augmented national datasets with information collected from  postsecondary institutions.
We interviewed school administrators from 19 postsecondary institutions,  including public and private schools and 2-year and 4-year institutions.  These institutions were located in four states—California, Maryland, Ohio,  and Virginia—in which the costs for resident tuition and fees at public  2-year institutions and the amount of available state aid varied. For  example, in California the cost for resident 2-year tuition was lower than  for all other states ($330), but no state aid is available to students pursuing  their postsecondary credentials on a less-than-halftime basis. Maryland  ranked 9th among states in tuition and fees at public 2-year institutions  ($2,564) and, like California, did not have state financial aid available to  less-than-halftime students. Both Virginia and Ohio had state aid available  for less-than-halftime students; however, Virginia’s 2-year tuition ($1,304)  was lower than that of Ohio ($2,300).
Within each state, we contacted three to six institutions (see table 1).  Because most less-than-halftime adult students are enrolled at 2-year  public institutions, we visited more of this type than other postsecondary  schools. In addition, we selected institutions with large proportions of  adult students in their overall student body. We met with a range of school  administrators at these institutions, including financial aid officers,  student affairs officers, directors of institutional research, and other  administrative officers. We discussed with them their less-than-halftime  adult student population and the implications of changing the Pell Grant  and Stafford Loan Programs. We also collected institutional data on spells  on less than halftime enrollment among students graduating from 10 of the  19 we visited. We solicited information from each institutional research  officer about the reliability of these data and reviewed the data for obvious  problems of accuracy and completeness. Because these are not samples of  a larger student population, there are no confidence intervals associated  with them.
subsections: section_title: Cost Estimation Methodology
subsections: section_title: Pell Grant Analysis
paragraphs: The following steps were taken to estimate the additional federal budget  costs associated with permitting degree-seeking students enrolled less  than halftime to include room, board, and miscellaneous personal  expenses in calculating their cost of attendance (alternative COA) for the  purpose of receiving a Pell Grant.
Using the 1999-2000 National Postsecondary Student Aid Study, we  estimated a Pell Grant for all students in the sample who were less-than- halftime students seeking a certificate or undergraduate degree. We  estimated Pell Grant awards under the current law, and under an  alternative COA for the 1999-2000 school year. The estimated total federal  costs under current law and the alternative COA were calculated by  summing the estimated individual grants. The federal cost associated with  changing the Pell Grant policy was calculated as the difference between  the estimated federal cost under current law and the estimated federal  cost under the alternative COA. Federal costs for school year 1999-2000  were projected to school year 2003-04 by assuming that the ratio of these  estimated federal costs to the total cost of the Pell grant program in school  year 2003-04 were the same as in school year 1999-2000. To estimate the  average Pell grant in school year 2003-04, we projected the estimated  number of Pell grant recipients in school year 1999-2000 who are less than  halftime students seeking a certificate or undergraduate degree to school  year 2003-04. We did this by assuming that the proportion of this estimated  number of recipients to the total number of recipients in school year 1999- 2000 equals this proportion in school year 2003-04. The average Pell Grant  in school year 2003-04 equals the estimated federal cost in school year  2003-04 divided by the estimated number of recipients in school year 2003- 04. Federal costs other than the amounts of the Pell Grants were not  considered in our analysis.
Our estimate of students’ Pell Grant awards is based upon the federal  needs analysis methodology for calculating the Pell Grant and the Regular  Disbursement Schedule for Determining Less than Halftime Awards (FSA  Handbook 1999-2000, Pell Reference). If the student did not apply for  financial aid, or the institution they attended did not have any Pell  recipients in 1999-2000, we assumed that the student’s estimated Pell  Grant to be $0. The same steps were taken in estimating a student’s Pell  Grant under the alternative COA except that the Pell cost of attendance  was estimated to include room and board and personal expenses. To  receive a Pell Grant under the alternative COA, the individual must have  applied for financial aid. Inherent in this assumption is that an alternative  Pell cost of attendance will not affect students’ decisions to apply for  financial aid.
section_title: Stafford Loan Analysis
paragraphs: We undertook the following analysis to estimate the federal subsidy cost  of allowing degree-seeking students who enroll less than halftime to be  eligible for subsidized and unsubsidized Stafford loans.
Using the 1999-2000 National Postsecondary Student Aid Study, we  estimated the Stafford subsidized and unsubsidized loans for all students  in the sample who were less-than-halftime students seeking a certificate or  undergraduate degree would receive if the law were changed to allow less  than halftime students to receive these loans. The total loan volumes  summed and weighted over all students by FFELP/FDLP, school type, and  class year were projected from school year 1999-2000 to school year  2003-04 by assuming that the proportion of this estimated loan volume to  the total loan volume in fiscal year 1999-2000 would equal the proportion  of the estimated loan volume in school year 2003-04 to the total loan  volume in FY 2003-04. The federal cost of this policy change equals the  projected loan volume times the applicable subsidy rate in 2003-04,  summed over FFELP/FDLP, school type, and class year. Federal costs  other than the subsidy costs of the loans were not considered.
To estimate the average loan awards in school year 2003-04, we projected  the estimated number of Stafford subsidized and unsubsidized recipients  in school year 1999-2000 who are less than halftime students seeking a  certificate or undergraduate degree to school year 2003-04. We did this by  assuming that the proportion of this estimated number of recipients to the  total number of recipients in fiscal year 1999-2000 would equal the  proportion of recipients in school year 2003-04 to the total number of  recipients in fiscal year 2003-04. The average loan award in school year  2003-04 equals the estimated loan volume in school year 2003-04 divided  by the estimated number of recipients in school year 2003-04.
Our estimate of students’ subsidized loan awards is based upon the federal  needs analysis methodology for subsidized Stafford loans. For each  student we estimated a cost of attendance (minus room and board and  personal expenses) for the period enrolled in school (loan COA). We  calculated and prorated the expected family contribution for the number  of months the student attended school. We also calculated each student’s  estimated financial assistance, adding federal, state, private, and  institutional aid. The estimated subsidized loan award was calculated as  the loan COA, minus the prorated expected family contribution and  estimated financial assistance. Estimated subsidized loans, if above the  loan limit level, were set at the maximum amount allowed by law. For the  students attending institutions for which no Stafford loan recipients were  reported, we assumed that estimated subsidized loan was $0.
For each student in the NPSAS sample, we also estimated an unsubsidized  award. This amount was calculated as the prorated expected family  contribution plus unmet need. Unmet need was estimated to be the loan  COA, minus prorated expected family contribution and federal, state,  private, and institutional aid. If the estimated unsubsidized award was  greater than the loan limit minus the estimated subsidized award, we  replaced the estimated unsubsidized award with the loan limit minus the  estimated subsidized award. For the students attending institutions for  which no Stafford loan recipients were reported, we assumed that  estimated unsubsidized loans was $0.
All students were assumed to borrow the Stafford loan amounts for which  they qualify. Inherent in this assumption is that all students who are  eligible will apply for Stafford loans.
Education officials provided information on federal subsidy rates for  Stafford loans, budget estimates for the Pell Grant program, and reviewed  our estimation methodology.
section_title: Appendix II: Estimates and Associated Confidence Intervals
paragraphs: Tables 7-31 contain the sample-based estimates and associated confidence  intervals for our reported results.
section_title: Appendix III: Budgetary Impact of Possible Behavioral Response to Cost of Attendance Changes in the Pell Program
paragraphs: The policy change in the Pell Grant Program we considered was changing  the cost of attendance calculation for less-than-halftime students so that it  does not exclude room, board and personal expenses. This policy change  would increase the number of people who are qualified to receive an  award, and it would increase the size of the award for those who are  already qualified to receive an award under current law.
This policy change may cause people to change their postsecondary  enrollment behavior. Specifically, some people who are not enrolled in  postsecondary education may choose to enroll less than halftime in  response to the policy change. Students who are already enrolled less than  halftime in postsecondary education are unlikely to change their  enrollment in response to the policy change.
As Seftor and Turner note, there is no consensus within the economic  literature on the effect of Pell Grants on enrollment. For example, Hansenand Kane found that Pell Grants have no effect on enrollment. However,  they found that Pell Grant Program does affect the enrollment behavior of  older, nontraditional students. Since the policy changes we consider are  specific to less-than-halftime students and over 80 percent of less-than- halftime students are independents, the Seftor and Turner findings appear  to be more applicable to this analysis. Seftor and Turner estimated price  elasticities that fall in the range of –0.34 to -0.14.
To estimate the possible behavioral response to a change in Pell Grant  policy, we applied a price elasticity in the middle of those identified by  Seftor and Turner (–0.24) to the less than halftime Pell award amounts  estimated in this study. We assumed that changes to the Pell Grant cost of  attendance methodology, if adopted, would be applied to the cost of  attendance for both dependent and independent students enrolled on a  less than halftime basis. Therefore, in calculating the possible behavioral  response we applied these estimated Pell Grant awards and price  elasticities to the population of all persons 18-35 who were not enrolled in  school and who had not earned a postsecondary credential.On this basis,  we estimate that the Pell Grant policy change will cause about 35,000  people between the ages of 18 and 35 who are not currently enrolled in  school and who do not currently have an undergraduate degree to enroll  less than halftime. This conclusion was reached based upon the following  calculations:
We found that the Pell Grant policy change would increase the average  Pell Grant award from $0 to $630 for 0.63 percent (12,679/2,007,542) of the  less-than-halftime student population, increase the average Pell Grant  award $111 for 7.46 percent (149,731/2,007,542) of the less-than-halftime  student population, and have no effect on the Pell Grant award for the rest  of the student population.
Of the 33 million people aged 18-35 who are not enrolled in school and  without a undergraduate degree, we assumed that only 18 percent of them  would consider going to school less than halftime: the same proportion of  the undergraduate population currently enrolled on a less than halftime  basis. This is the population who may change their enrollment behavior  because of the policy change.
Of that population, we assumed that 0.63 percent of them would have an  increase in their Pell Grant award of $630 and 7.5 percent of them would  have an increase in their Pell Grant award of $111.
Using the average cost of school when attending less than halftime of  $500, this suggests that there would be an additional 35,053 people  (+ [33,000,000 x 0.18 x 0.075 x  111/500 x 0.24]) enrolling in school less than halftime in response to the  policy change.
This enrollment response would cost the federal government $9,764,063  ( x $630+ [33,000,000 x 0.18 x  0.075 x 111/500 x 0.24] x $111).
section_title: Appendix V: GAO Contacts and Staff Acknowledgments
subsections: section_title: GAO Contacts
section_title: Staff Acknowledgments
paragraphs: In addition to those named above, the following people made significant  contributions to this report: Cedric Burton, Betty Clark, Cindy Decker,  Gordon Mermin, John Mingus, Susan Conlon, and Corrina Nicolaou.