NEW YORK (MainStreet) — A new report from the Education Trust suggests fixing some of the problems in higher education by focusing on schools that have been the least willing to provide access to lower-income students.

The Washington, D.C.-based group wants to cut funding to the schools where less than 17% of their undergraduate student body are Pell grant recipients--amounting to some 5% of the nation's colleges and universities. The study focused on the 2010-2011 academic year. Pell grants are a means-tested federal benefit that goes to students from low-income families and widely regarded as an identifier of disadvantaged students.

Under the proposal, colleges that don't make it out of the bottom 5% during a multi-year grace period would lose access to federal funding, which would also mean that their students would lose access to federal student loans. The study was based on information provided by the Education Trust.

Schools made the Education Trusts' hit parade not because of any academic short-comings but because they failed to enroll a minimum of 17% Pell grant recipients.

The list has a total of 107 colleges. It includes, for example, Carleton College, Claremont McKenna and Harvey Mudd—small. The list also includes Cornell, Dartmouth, Penn, Princeton and Yale—along with Duke, Notre Dame, Stanford and the University of Chicago.

In addition to the 17% threshold, the Education Trust has also established a minimum number of Pell students, apparently as an alternative benchmark for smaller schools.

"Colleges must have at least 30 full-time freshmen in the 2010-11 academic year to be identified as falling in the bottom 5% of Pell freshman-enrollment rates," the report stated. The proposal stipulates that colleges will be considered successful only if their three-year weighted average, after the identification year, surpasses the 17% Pell benchmark.

The Education Trust apparently did not factor in a little-discussed but all-important factor: the balance sheets of the endowments of the colleges on the list. Schools with richer endowments are better able to take on students that they will lose money on, at least in the short run.

According to Statisticsbrain.com, six of the schools with the top ten endowments were on the Education Trusts' list of schools with low Pell enrollments: the Franklin W. Olin College of Engineering, Pomona College, Princeton, Stanford, Swarthmore and Yale. More than 17% of the undergrad student body were Pell recipients at the remaining four—Amherst, Grinnell, Harvard and MIT.

--Written by John Sandman for MainStreet