July 25, 2019

Understanding Pell Grants


KEY TAKEAWAYS

  • Pell Grants are the main federal grant to help lower-income students pay for college.
  • In 2017, Congress reinstated a provision that restored year-round Pell Grants and is designed to help students afford to remain enrolled in classes throughout the year and graduate in less time.
  • As part of reauthorizing higher education programs, Congress may consider changes that further expand access to Pell Grants. 

Federal Pell Grants, which provide need-based aid to help low- and moderate-income students pay for college, are expected to be part of any legislation to reauthorize higher education programs. In the 2017-18 academic year, approximately 7 million students received Pell Grants, about one-third of all undergraduate students. According to the Department of Education, the average award was about $4,000.

Pell Grants by the Numbers, 2017-18

Pell Grants

What are Pell grants and who gets them?

Pell Grants constitute most federal grant aid for undergraduate students. For funding and budgeting purposes, the program receives both discretionary and mandatory funding.

The size of a student’s Pell award is calculated without accounting for other aid such as federal loans or state grants the student may get. Federal spending on Pell is expected to total about $29 billion in fiscal year 2019.

A large number of Pell recipients are nontraditional students, who may be older and who may be balancing work and family responsibilities while they are in school. According to the College Board’s most recent data, about 43% of Pell recipients were over 23 years old. A slight majority of recipients are not claimed as dependents on anyone else’s tax returns, and 30% have dependents of their own.

A Substantial Number of Pell Grant Recipients Are Nontraditional Students

Pell Grants

Pell Grant funding follows a student who receives it to the school where he or she is enrolled. The Education Department reported that in 2017-18, about 41% of Pell Grant money went to public four-year schools, 30% went to public two-year schools, and the remaining 29% went to private and for-profit schools.

Several factors determine a student’s Pell award, including the cost of attendance, an expected family contribution, and whether the student enrolls full- or part-time. Over a student’s lifetime, he or she can get Pell Grants for an equivalent of 12 full-time semesters, or six years. So a student enrolled part-time may receive Pell aid over a longer period of time.

For the 2019-20 award year, the maximum Pell Grant amount is $6,195. An eligible student can get additional funds if enrolled in classes year-round, such as summer classes. The additional grant under year-round Pell counts toward a student’s lifetime Pell eligibility.

Data on graduation rates for students receiving Pell Grants are limited, but a 2017 Brookings Institution analysis of Department of Education data for first-time, full-time Pell Grant students attending four-year colleges found: “The average six-year graduation rate for Pell recipients in my sample was 51.4 percent, compared to 59.2 percent for non-Pell recipients.”

Expanding Pell

Congress restored year-round Pell Grant eligibility in a fiscal year 2017 appropriations law, which allowed for the additional grant funding some students use to stay enrolled throughout the year. About 762,000 students received an additional grant in 2017-18, and the average amount was $1,500, according to the Department of Education. It may be too soon to see how year-round Pell will affect college enrollment and completion rates, but the aim was to help students finish college and enter the workforce more quickly, with less debt. The 2008 higher education reauthorization law had previously set up year-round Pell, but the fiscal year 2011 appropriations ended it.

As part of higher education program authorization efforts, the Senate Health, Education, Labor, and Pensions Committee has held hearings on college access, affordability, and completion. Lawmakers have introduced various proposals that would broaden access to Pell Grant funds. These proposals include Senate and House companion bills that would make shorter training programs for high-skill, in-demand occupations eligible for Pell funds. Another set of House and Senate bills would set up a pilot project to assess Pell for shorter career and technical education programs. The president’s budget also proposed expanding Pell to “high-quality, short-term programs in high-demand fields.” Other lawmakers have a bill to reinstate Pell eligibility for incarcerated people, which the Department of Education is assessing through its Second Chance Pell experiment. Another plan would let high school students access Pell funds to take courses for college credit.

Issue Tag: Education