What Will the Maximum Pell Grant Be in 2027?

September 6, 2017

By Carrie Warick, Director of Policy and Advocacy

$5,920. 

Or maybe $6,020.

Or possibly $6,890.

It all depends on Congress. 

Low-income college students nationwide are currently receiving the largest maximum Pell grant ever: $5,920. But this funding covers only 29 percent of the cost of attendance at the average four-year, public college, compared to more than half covered in the 1980s, according to NCAN member The Institute of College Access and Success (TICAS). For this year’s freshmen, the share of their covered tuition, room and board bills covered will only decrease as they advance toward their degree. Why? Without Congressional action to change the current law, the maximum Pell Grant will stay the same through 2027, even as the cost of college continues to increase. The table below illustrates the lack of growth.

Academic Year  Maximum Pell Grant Award
Without a Change in Law ($)
 
 2017-18 5,920 
 2018-19 5,920
 2019-20 5,920 
 2020-21 5,920 
 2021-22 5,920 
 2022-23 5,920 
 2023-24 5,920 
 2024-25 5,920 
 2025-26 5,920 
 2026-27 5,920 

Using savings from the converting all federal loans to direct loans, and ending the Federal Family Education Loan Program (FFELP), Congress scheduled automatic increases for the Pell Grant award based on inflation starting in 2010. Those increases kept the Pell Grant from falling even further behind in its coverage of the cost of college as the cost of housing, healthcare, cars, and even food and clothing continue to rise. The increases in the cost of college – 4.7 percent on average annually over the last decade for tuition, fees, room and board at a public four-year institution – are well-documented. These increases are expected to continue, conservatively at a rate of 3 percent moving forward.

Assuming a three-percent increase over the next three years for the full cost of attendance at a public four-year institution, this year’s entering freshmen will owe an additional $1,863 for their senior year than they do for their freshman year without the assistance of an increasing Pell Grant to support their education. Research shows that as little as $300 in funding can affect a student’s ability to persist in school. However, this year’s entering freshmen could face six times that gap by senior year. That's why NCAN and nearly two dozen of its members are urging lawmakers to increase funds for the Pell Grant maximum next year.

Is Congress Taking Action?

The ideal place to debate a permanent solution to adjusting the Pell Grant maximum award over time is through the reauthorization of the Higher Education Act. Unfortunately, Congress is long overdue to have this conversation. The law that oversees most of the federal government’s involvement in higher education, including the structure of the Pell Grant, was last renewed in 2008. Ideally, Congress revisits HEA every five years. In the absence of this broader conversation, tweaks are currently being debated through the Congressional appropriations process, which is handled by different committees than the reauthorization.

In July, the House subcommittee for Labor-Health and Human Services-Education passed a bill maintaining the Pell Grant award at $5,920 for the 2018-19 academic year, as well as a reduction of $3.3 billion in Pell Grant carryover funds, often referred to as the reserve fund. This bill is currently being considered on the House floor as part of an eight-bill appropriations package (H.R. 3354).

This week, the complementary Senate appropriations subcommittee passed a bill that would increase the Pell Grant by $100 for the 2018-19 award year. Sen. Roy Blunt (R-MO), chair of the subcommittee, said in his opening remarks that the full discussion should be taken up by the Senate Health, Education, Labor, and Pensions Committee during HEA Reauthorization. This proposed bill, which includes bipartisan support from subcommittee ranking member Sen. Patty Murray (D-WA), also includes a $2.6 billion rescission from the Pell Grant carryover funds.

NCAN joined 22 members in a letter coordinated by TICAS to Sens. Blunt and Murray, urging them to consider increasing funds for the Pell Grant maximum next year. Members signing onto that letter include 10,000 Degrees, Achieve Atlanta, AVID Center, Chicago Urban League, College Bound St. Louis, College Forward, College Now Greater Cleveland, College Possible, CollegeTracks, Denver Scholarship Foundation, First Graduate, iMentor, Latino U College Access, Lenawee College Access Network, OneGoal, Reach Higher Montana, Scholarship America, Southern California College Access Network, St. Louis Graduates, The Scholarship Foundation of St. Louis, The Tennessee College Access and Success Network, and uAspire.

Given the diminishing power of the Pell Grant over time, this is the time for Congress to focus on recommitting to the Pell Grant program by extending the automatic adjustments that help the Pell Grant keep up with the rising cost of higher education. NCAN applauds the Senate L-HHS-Ed appropriations subcommittee for including a one-year extension as their counterparts on the HELP committee consider reauthorization the Higher Education Act, and encourages the House to consider similar action.

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