Back in 2022, we wrote a piece about the Pell Grant and student success based on our initial pilot data from the Survey of Community College Outcomes. This pilot included nine schools from the Fifth District. We have now expanded to 121 community colleges across the five states in our region, which allows us to take a deeper dive into the ways in which Pell Grant students are experiencing success at Fifth District community colleges, and how this differs compared to students who do not receive the Pell Grant.
As we've written about previously, our Richmond Fed Success Rate considers five different ways in which degree/certificate-seeking students experience success at a community college over a four-year period following enrollment.
There are observable differences in the Richmond Fed Success Rates across many different student characteristics, including gender, race, and age (there will be more to come on this in subsequent posts). There are also differences in success between students in the cohort who receive the Pell Grant and those who don't. Our cohort for the 2024 survey includes all degree/certificate-seeking students who enrolled during the 2019-2020 academic year. This can include dual-enrollment students, as long as they are seeking a degree or other award. This is important to acknowledge because dual-enrollment students are not eligible for the Pell Grant, therefore reducing the rate of Pell Grant receipt among cohort members in some states. In our 2024 survey, approximately 34 percent of cohort students received a Pell Grant while enrolled at the community college.
Title IV of the Higher Education Act of 1965 created the Pell Grant program along with other federal student aid programs. This program provides aid to low-income undergraduate students and, according to a report from the Congressional Research Service, is the largest source of grant aid for postsecondary education funded by the federal government. Depending on need determined by the Free Application for Federal Student Aid (FAFSA) students, as of the 2025-2026 academic year, can receive up to $7,395 annually. These funds can be used to cover direct costs at the institution, such as tuition and fees, and the remainder is refunded to the student to cover any education-related expenses (i.e., transportation and living expenses).
So how do these Pell Grant recipients experience success compared to those not receiving the Pell Grant? The short story is that they have lower success rates. Specifically, Pell Grant students have a 40 percent Richmond Fed Success Rate, compared with 53 percent for their non-Pell peers. This gap aligns with the consensus in the academic literature on educational outcomes: Pell recipients tend to graduate from college at lower rates than those who do not receive Pell Grant funding. However, it is important to remember that our results are descriptive and do not suggest that receiving Pell Grant funding leads to lower outcomes. Pell Grant eligibility is reserved exclusively for low-income students. Students who qualify for and receive Pell Grant funding may have substantively different characteristics than non-Pell students — differences that could be driving the differences in outcomes.
But there is certainly more to this story. Not only is there a difference in the overall success rate between these two groups, but there are also observable differences in the ways in which they succeed. Interestingly, the persistence category is almost identical between the two groups, so this is not a story about Pell Grant students needing longer periods of time to complete. Non-Pell students do attain associate degrees at a slightly higher rate, when data are examined in aggregate, but the gap is minimal. The more significant differences can be seen in the completion of diplomas and certificates and in transferring to a four-year institution prior to earning a degree or award. In fact, the difference in the transfer category of success is driving the majority of the gap in overall success between Pell and non-Pell students.
The breakdown of Pell Grant recipient success is relatively consistent overall across states, but there are some notable differences.
Associate degree attainment is higher among non-Pell students in all states except for North Carolina, with non-Pell students earning associate degrees at a rate greater than 5 percentage points compared to their Pell recipient peers in West Virginia. A relatively large percentage of non-Pell recipients contribute to the Richmond Fed Success Rate by transferring to a four-year institution prior to earning a degree/diploma/certificate/credential. Some of this is explained by state context. In North Carolina, many dual-enrollment students are classified as degree-seeking and are therefore included in the Richmond Fed Success Rate cohort. These students are ineligible for the Pell Grant since they are still in high school. Many of them use dual-enrollment coursework for transfer purposes. In South Carolina, both large flagship institutions, the University of South Carolina and Clemson University, have large bridge programs that serve as direct pathways from the local community college to the university. Contrary to programs in many other states, these programs are organized as 1+3 programs, meaning that students attend the community college for one year and then transfer to the university prior to the earning of any award. Outreach has taught us that students in these bridge programs are less likely to qualify for Pell Grants than other community college students, so many of these successful transfers in South Carolina fall into the non-Pell category.
We were intrigued to see that the rate of persistence among Pell and non-Pell students was relatively consistent in each of the five states in the survey. This matches what we commonly hear from colleges in our outreach, who indicate that they are frequently able to find ways to support all students financially if there is a true need that would hinder their completion. Community college leaders regularly tell us that people are infrequently leaving college because of the direct cost of tuition and fees.
As previous research has commonly shown, our survey indicates that Pell Grant recipient students are less likely to have a successful outcome than those who are not Pell recipients. Pell Grant recipients are more likely than their non-Pell counterparts to struggle to meet basic needs, such as food, child care, and housing. While community colleges all provide some level of wraparound services to support these students, the challenges are real. We are expanding the Wraparound Services Survey (a subset of this work) to learn more about the range of services provided and how this relates to student outcomes. Eventually, we hope to be able to measure how the existence of these wraparounds contributes to the success of Pell Grant students, as well as other subsets of students that have traditionally experienced outcomes that lag the average.
Views expressed are those of the author(s) and do not necessarily reflect those of the Federal Reserve Bank of Richmond or the Federal Reserve System.
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