The Pell Grant has served as the cornerstone of financial aid for students from low-income backgrounds pursuing higher education since its creation in 1972. This need-based grant provides crucial support for around 7 million students each year, or about
one-third of undergraduates. Since it was created 50 years ago,
the Pell Grant has helped 80 million low-income students go to college.
Unfortunately, the purchasing power of the Pell Grant has continuously declined since the mid-1970s. At its peak in 1975-76, the maximum Pell award was worth more than three-fourths of the average cost of attendance – tuition, fees, and living expenses – for a four-year public university. Today, it's worth roughly one-third.
President Biden called for doubling the Pell Grant by 2029, and Congress has attempted to keep the Pell Grant on pace with inflation by including increases during
appropriations cycles. In 2022 and 2023, the maximum Pell Grant saw the largest boosts in the past decade of $400 and $500, respectively. Still, bolder investment in the program is needed to curtail the rising affordability crisis.
NCAN’s “Growing Gap” research found that only 24% of public, four-year institutions and fewer than half of public, two-year institutions are affordable to the average Pell Grant recipient.
Doubling the maximum Pell Grant will address the equity gaps currently present in higher education by targeting the college affordability crisis, experienced by all students from low-income backgrounds and disproportionately by students of color. For
this reason, NCAN has
joined nearly 1,200 organizations and institutions calling on Congress to Double Pell.
Why is Double Pell a Good Investment?
Pell Grants are:
Targeted: The majority of the approximately 7 million annual Pell Grant recipients have family incomes of under $40,000. Pell Grants support students of color: 59% of Black students, 51% of American Indian/Alaska Native students, 48% of Hispanic/Latino
students, and 36% of Native Hawaiian/Pacific Islander students receive Pell Grants.
Immediate: The Pell Grant program is well established, with eligibility determined through the Free Application for Federal Student Aid (FAFSA) and administered through a student’s institution. An investment in this program is the fastest way
to increase support to the largest number of students.
Widespread: The Pell Grant is available for a student to use at any Title IV eligible institution in any state.
Why is Now the Right Time to Invest in Double Pell?
College enrollment remains below pre-pandemic levels: College enrollment fell by 4.1% in the spring of 2022, compounding the substantial enrollment declines last
year. In sum, college enrollment is 9.4% lower than before the pandemic began. Students at community colleges, those attending public universities, and women have been most acutely impacted.
College is becoming increasingly unaffordable: The number of public postsecondary options that are in reach for the average Pell Grant recipient is falling, while affordability gaps are substantially rising – with few exceptions.
How Should Congress Double the Pell Grant?
Double the maximum award and then recalculate Pell eligibility: Using this approach will allow all current Pell Grant recipients to receive an increase in funds. It will also allow students who are currently ineligible for the Pell Grant but
still struggling to pay for college to qualify for a partial award.
Support All Postsecondary Students in Need of Federal Student Aid: Congress should allow individuals with Deferred Action for Childhood Arrivals (DACA) status, Temporary Protected Status (TPS) recipients, and those meeting similar
requirements to be eligible to apply for federal student aid.
Index the Pell Grant to the rate of inflation: Once the maximum Pell Grant has been doubled, Congress should reinstate the provision that indexed the program to the rate of inflation. Doing so would guarantee a baseline annual increase and,
in turn, sustain Pell’s purchasing power.
Create a federal-state partnership: Congress should invest in a federal-state partnership that incentivizes states to invest in need-based aid, and
stabilize or reduce the cost of college. Such actions at the state level would help control the cost of college and provide additional support to close the financial aid gap for students from low-income backgrounds.
Keep Pell dollars in the Pell program: Dollars accumulated in the Pell Grant reserve (from unobligated funds in years when Congress appropriated more than students needed) are intended for students from low-income backgrounds and should be
used to help those students afford a higher education. They should not be removed to support other portions of the federal budget.
What Would the Increase Mean for Students?
Students currently receiving a maximum Pell Grant would receive double: Pell Grant eligibility is determined by subtracting the Expected Family Contribution (EFC) from the maximum Pell Grant award. Students with a $0 EFC receive the maximum
award and therefore would receive double the amount of funding. (Assuming their total cost of attendance exceeds the double Pell amount.)
Double Pell would help close college affordability gaps across the country: Holding all other factors constant, if this Pell Grant were used in the NCAN affordability definition, the affordability
gap would be closed in most states for public bachelor’s degree institutions and community colleges.
