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.
Unfortunately, the purchasing power of the Pell Grant has continuously declined since the mid-1970s. The last time Congress made a substantial investment in the Pell Grant program
was the 2009-10 stimulus package. 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 less than 30%.
While Congress has attempted to keep the Pell Grant on pace with inflation by including increases during the last three appropriations cycles, only a bolder investment in the program will curtail the rising affordability crisis.
NCAN’s “Growing Gap” research finding that only 25% of public, four-year institutions and fewer than half of public, two-year institutions are affordable to the average Pell Grant recipient. If the Pell
Grant is doubled, over 80% of both types of institutions would become affordable for 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 is decreasing rapidly: High school class of 2020 fall college enrollment dropped 6.8%, according to the National Student Clearinghouse Research Center.That
decline is four times larger than the class of 2019’s pre-pandemic enrollment decline, and across high school categories significant inequities emerge that disadvantage students from low-income backgrounds and students of color.
Economic recovery likely to benefit those with education beyond high school: Nearly all of the jobs created in the recovery after the Great Recession were filled by individuals with at least some college education. Further, the job loss gap
between those with only a high school diploma and those with some college is growing.
How Should Congress Double the Pell Grant?
Double the maximum award and the 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.
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 1) need-based aid
and 2) stabilizing or reducing the cost of college, so that both the cost of college and the Pell Grant are rising at the rate of inflation. 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 47 states and Puerto Rico for public bachelor’s degree institutions and in 46 states for community colleges (with data unknown for additional 3 states and Puerto Rico) leaving community college unaffordable in only one state
with known data. [DC is not included in this data.]
