44. Increase the value of Pell Grants.

Finance 09.6.24

Here’s what the federal government can do:

  • Congress should increase the value of Pell Grants to cover at least half the cost of attending a four-year public college or university.
  • Congress should permanently restore automatic annual inflation adjustments for Pell Grants.
  • Congress should make Pell Grants a mandatory funding program.
  • Congress should expand Pell Grant eligibility to non-citizen students, undocumented students, DACA-eligible students, and TPS-eligible students.
  • Congress should end the taxation of Pell Grants.

Here’s what state government can do:

  • State legislatures should ensure Pell Grant increases supplement and do not supplant state grant aid.

Here’s what institutional leaders can do:

  • Higher education institutions should ensure that increases to Pell Grants supplement and do not supplant institutional aid.

Pell Grants have a history of bipartisan support, and since 1972 they have provided financial aid to more than 80 million students with low-to-moderate incomes to help them reach their educational goals.[i] However, Pell Grants now cover the lowest share of college costs since their establishment. At its peak in 1975-76, the maximum Pell Grant covered more than 75 percent of the average cost of attending a four-year public college, compared to the 2023-24 maximum award amount, which covers just 26 percent of the cost.[ii] Congress should increase the value of Pell Grants and invest in the opportunity that it offers to students with fewer financial resources.

  • More than 6 million students annually depend on Pell Grants to attend and complete college.[iii]
  • 88 percent of Pell recipients come from families with incomes at or below $40,000, and 46 percent of Pell recipients come from families with incomes at or below $15,000.[iv]
  • Pell Grants are particularly important for students of color. Sixty percent of Black students, half of Hispanic or Latino students, 45 percent of American Indian or Alaska Native students, and nearly 40 percent of Native Hawaiian and Pacific Islander students rely on Pell Grants to attend and complete college.[v]
  • Nearly 7 out of 10 Pell Grant recipients who graduate from four-year colleges have student loans, and their average debt is $2,069 more than non-Pell graduates.[vi]

 

[i] “A Proclamation on the 50th Anniversary of the Federal Pell Grant Program,” The White House, June 22, 2022. https://www.whitehouse.gov/briefing-room/presidential-actions/2022/06/22/a-proclamation-on-the-50th-anniversary-of-the-federal-pell-grant-program/.

[ii]Calculations by TICAS using data from the College Board’s 2022 Trends in College Pricing and Student Aid report, available at: https://research.collegeboard.org/trends/college-pricing, and U.S. Department of Education data on the maximum Pell Grant.

[iii]Congressional Budget Office (CBO) May 2022 baseline projections for the Pell Grant program, available at: https://www.cbo.gov/system/files/2022-05/51304-2022-05-pellgrant.pdf.

[iv]Calculations by TICAS using data from the U.S. Department of Education, 2020-21 Federal Pell Grant Program End-of-Year Report, Table 003, available at: https://studentaid.gov/sites/default/files/fsawg/datacenter/library/2020-2021-Pell-EOY-Tables.zip.

[v] Calculations by TICAS using data from the U.S. Department of Education, National Postsecondary Student Aid Study, 2019-20. https://nces.ed.gov/datalab/powerstats/table/gryyvz.

[vi]Calculations by TICAS using data from the U.S. Department of Education, National Postsecondary Student Aid Study, 2019-20. https://nces.ed.gov/datalab/powerstats/table/saszvx and https://nces.ed.gov/datalab/powerstats/table/cbiarm.