Watch CBSN Live

How High Tech Could Rescue the Pell Grant Tuition Program -- and Help Itself

If your kids are in college but you couldn't put silver spoons in their mouths, the news that Pell Grants are about to take a big hit is unsettling, whether from President Obama's proposed budget cuts or those that House Republican advocate. Even if your family doesn't fall into the low- and moderate-income categories the grants target, any drop in the total pool of financial aid means a redistribution in what is left. Money spreads thinner and everyone gets less, meaning more pain for all to share.

This isn't an issue just for consumers with children in college. Businesses depend on a well-educated workforce. High tech, in particular, has moaned for years about the lack of matriculating engineers and scientists to feed those hungry twins, Research and Development.

That lack is the rationale for hiring technical personnel from other countries on H-1B visas and outsourcing R&D work. However, large corporations are in an interesting position. Cash rich and growing, they could band together and create a collectively massive scholarship program. They could fuel local innovation, ensure a pipeline of prepared talent, and, last but not least, create an ocean of public good will to offset the bad PR these companies seem to have a genius for creating.

Look at a list of some of the top tech companies based in the U.S.:

  • Apple (AAPL)
  • Cisco (CSCO)
  • Computer Sciences Corp (CSC)
  • Dell (DELL)
  • EMC (EMC)
  • Google (GOOG)
  • Hewlett-Packard (HPQ)
  • IBM (IBM)
  • Intel (INTC)
  • Microsoft (MSFT)
  • Motorola Solutions (MSI)
  • Qualcomm (QCOM)
  • Seagate Technology (STX)
  • Texas Instruments (TXN)
  • Oracle (ORCL)
  • Xerox (XRX)
Something the companies on the list have in common are revenues that top $10 billion annually. What if these companies worked together to create a cross between the baseball concept of farm teams and the military's R.O.T.C. program?
  1. The corporations would create a big pool of scholarship money for the most promising students in the country. If each kicked in $50 million a year -- less than 0.5 percent of revenue for even the smallest -- that would be $800 million annually. Given that top schools cost $50,000 a year, that would be enough money to keep 16,000 students, whether undergrads or graduate students, in school and focused on learning.
  2. Combine scholarship money with practical work-study. Anyone who has worked in technology can tell you that graduates still have much to learn to be real working engineers or scientists. So help them hit the ground running when they get the diploma.
  3. In return for the support, students guarantee that they'll work at a fixed amount -- something reasonable, although not top salaries -- for four years.
There are precedents for companies getting actively involved in education. General Motors (GM) established Kettering University as a breeding ground for engineers, and all of them work in co-op programs for practical experience.

Going to other countries for technical help may be wise, but it's hardly sufficient. Look at the number of patents with at least one non-U.S. inventor of these top companies. IBM leads the pack in using foreign talent, and yet has domestically-based inventors only on 77.3 percent of its recent patents.

Aside from the importance such talent development could have to the long-term strength of the companies, but it would be a PR coup. A large number of them routinely put their feet into a public relations quagmires. Regulators put ever more focus on their activities. It would be a way to generate a lot of public love.


Image: morgueFile user hmm360.