On April 3, the Trump Administration released its Fiscal Year (FY) 2027 budget proposal, which maintains the maximum Pell Grant of $7,395 for a fourth straight year and provides adequate funding to address the funding shortfall. This is exceptionally good news for students. In contrast, last year’s budget proposed to cut the maximum Pell by $1,685 to $5,710 — reducing the award to 77% of its value. But maintaining Pell is not enough. If Pell had kept pace with inflation, the maximum grant would be $8,109, $713 more than $7,395.
“We're grateful the White House recognized the importance of the Pell Grant by holding the line on funding. Fully funding the Pell Grant program reflects the deep bipartisan support for the program and is an important step towards restoring Pell’s purchasing power for students,” said National College Attainment Network (NCAN) CEO Kim Cook. “But level funding isn't enough — three years of flat appropriations have already cost students hundreds of dollars in purchasing power. Congress must now go further and restore Pell's value for the millions of low-income students counting on it.”
The Pell Grant’s declining purchasing power means Pell now covers just 29% of the cost of attendance for an in-state student at a public university according to an NCAN analysis of College Board Pricing Trends data. In comparison, Pell covered 80% of cost of attendance at the height of its purchasing power.
Meanwhile, the expenses that weigh most heavily on low-income students — rent, food, transportation — have grown significantly in recent years, even as tuition and fees have plateaued and in some cases, fallen.
If it had kept up with inflation, the Pell maximum should have increased by 9.6% over its current value. That calculation is based on the US Bureau of Labor Consumer Price Index Inflation Calculator comparing when the maximum grant was last increased at the start of FY23 (October 2022) to the most recent data. Without inflationary adjustments to account for increased living costs, the value of the grant will continue to erode. Because the Pell Grant covers living expenses as well as tuition, it is uniquely positioned to address the full cost of college.
"Effective cuts to the federal Pell Grant are harmful for Michigan students and our state’s economy, with more than half the state's students qualifying for this need-based aid. Pell is the foundation that makes Michigan’s historic $750 million investment in state financial aid work,” said Ryan Fewins-Bliss, Executive Director at Michigan College Access Network. “Together, these resources open the door to college for Michigan students, particularly first-generation students, low-income students, and students of color. When that foundation is weakened, doors don’t just narrow—they close," We know the consequences when college becomes less affordable: more debt, delayed completion, and students stopping out altogether. At a time when Michigan employers need more skilled talent, reducing Pell moves us in the wrong direction.”
Why Do Pell Grants Need More Funding?
The bipartisan FAFSA Simplification Act has delivered real results: more students are completing the FAFSA, applying to and enrolling in college, and qualifying for Pell. In the 2025–26 academic year, nearly 1.7 million more students qualified for the maximum Pell Grant compared to 2023–24, according to NCAN's analysis of Office of Federal Student Aid data. Today, enrollment in postsecondary education is at its highest point in the last 10 years. NCAN members have played a big role in increasing FAFSA completion rates, and college access and enrollment around the country.
"Mississippi has worked diligently to improve FAFSA completion and expand postsecondary access statewide, and we are proud that the state now ranks first in the nation for FAFSA completion rates. Continued stability in Pell funding is essential to sustaining that progress and providing certainty to the almost 70,000 Mississippians who rely on Pell Grants to be able to afford postsecondary education, particularly those in rural communities, first-generation collegegoers, and working adults seeking credentials aligned with Mississippi’s workforce needs," said Jim McHale, President and CEO of the Woodward Hines Education Foundation and the Mississippi Higher Education Assistance Corporation.
The success of FAFSA simplification has increased demand for Pell. In February, the CBO projected that the Pell Grant program requires $16.9 billion more in FY 2027 to maintain eligibility and the same maximum award. The President’s budget proposes to cover the increased cost by investing $40.7 billion in Pell.
Now, Congress must act to provide this funding and help improve college affordability by including a small increase in the maximum Pell to address the rising cost of living.
Pell Grant Increases Benefit State Economies
Level funding the maximum Pell for a fourth straight year would translate into real economic losses for states and communities. Using data from NAICU, NCAN calculated what each state and Congressional district would gain if Congress acts to restore Pell's purchasing power starting with academic year 2027-28.
To see how much each state and Congressional district would gain if Pell had kept pace with inflation, check out the dashboard below or click here.
"Level funding Pell for four years straight would not only narrow pathways for students, it would weaken Alabama’s future. Our state is working diligently to build a strong, skilled workforce to meet the demands of growing industries like advanced manufacturing, healthcare, aviation, and technology. That talent pipeline depends on students being able to access and complete postsecondary education and training. Pell Grants make that possible,” said Chandra Scott, Executive Director of Alabama Possible.
Pell Grant dollars flow directly into local economies, supporting students who spend them on rent, groceries, meals and textbooks. The benefits of an increase to Pell funding would be felt in communities. For example:
The Impact of Pell Grants on College Completion
If the maximum Pell Grant had kept pace with inflation, it would be worth $8,108 today — $713 more than the current maximum of $7,395. To estimate what that investment would have meant for college completion, NCAN applied findings from a 2019 review of 43 different research studies, which found that every $1,000 in need-based grant aid is associated with a 1.5 percentage point increase in college completion. A $713 increase translates to a 1.07 percentage point gain in completion rates among Pell recipients.
Applying that increase to the 3.5 million Pell recipients enrolled at four-year institutions (using a 53% six-year graduation rate) and the 2.5 million enrolled at two-year institutions (using a 34.8% completion rate), we estimate that an inflation-adjusted Pell Grant could have resulted in approximately 15,000 more students completing a degree or credential every year.
This estimate is conservative: it does not account for students who stop out temporarily, accumulate additional debt, or reduce enrollment intensity in response to reduced aid — all of which would further suppress long-term completion. In addition, this estimate only includes students enrolled in associate, certificate, or bachelor's degree programs, not technical colleges or other postsecondary programs that are not offered at community colleges, where the students may be more sensitive to the cost of postsecondary education, and changes in the amount of need-based aid available.1
“Nearly 70% of available jobs in Louisiana require some kind of postsecondary credential—from certificates all the way up to doctoral degrees—and in every single category, demand is higher than the number of people possessing the required level of education to secure the job. The Pell Grant remains critically necessary to close the gap between job postings and the talent required to get our people qualified for and gainfully employed in dignified, high-demand roles that have the potential to positively change the fruit of an entire family tree,” said Mia Gonzales Washington, Director of the New Orleans College and Career Attainment Network.
Bipartisan Support for the Pell Grant Program
Congress has spent years intentionally expanding the Pell Grant — for workforce programs, for low-income students, for incarcerated learners — because postsecondary education is the single most effective driver of economic mobility.
As recently as January, Congress rejected a proposal to significantly reduce the maximum award in its FY2026 appropriations bill. Last summer, Congress added $10.5 billion to keep Pell adequately funded through FY 2026 in the budget reconciliation bill. The FAFSA Simplification Act itself was written by Senators Lamar Alexander (R-TN) and Doug Jones (D-AL) and signed into law by President Trump.
Now is the time to shore up the grant financially so that low-income students come to know that they can count on the program to go to college and achieve their career goals. The FAFSA Simplification Act is working. Students are enrolling. The program is growing.
NCAN urges Congress to adopt and build on the Administration's proposal to fully fund the Pell Grant shortfall and raise the maximum award to $7,595 before adjourning for the November elections. The students, families, and communities that depend on Pell cannot afford to wait.
1 To arrive at 3.5 million Pell recipients attending four-year colleges, we totaled the percent of Pell recipients attending public (33.1%) and independent (15.6%) four-year institutions from Federal Student Aid data, as summarized by Community College Daily, and multiplied it by the total number of Pell recipients in 2025-2026 of 7.2 million. To arrive at 2.5 million Pell recipients attending community colleges, we used the public community college figure of 34%. We did not include tribal colleges, independent two-year colleges, such as technical colleges because we do not have completion rates for those categories. As a result, the number of Pell recipients included in our analysis does not sum to 7.2 million.