Promise of Pell

Protect the Promise of the Pell Grant Program

The Pell Grant is the cornerstone of the federal student aid program. This need-based grant provides crucial support for 7.6 million students each year, or about one-third of undergraduate students. There is a general consensus that the government should work to strengthen the Pell Grant program, but the recommendations for those changes vary drastically.

The proposals below aim to maintain the purchasing power of the Pell Grant, which has continued to decrease over time, by taking into account the reality of post-traditional students' abilities to pay for higher education while balancing their other responsibilities. To protect the promise of the Pell Grant program, policymakers SHOULD:

  • Tie the Pell Grant to the cost of inflation so dollars grow as the economy grows.

The Pell Grant currently covers less than 30 percent of a four-year public education. Without a regular and planned increase, by 2024 the Pell Grant will cover only 23 percent of a four-year public education (NCAN calculates this based on the average increase over time). As tuition continues to rise, students need a Pell Grant that will grow along with it. The adjustment should be made annually in years when inflation increases.

  • 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) were intended for low-income students and should be used to help students afford a higher education. Removing the dollars from this rainy-day fund, which can support the Pell Grant program in years of high demand, for use other than college affordability for low-income students is tantamount to cutting the Pell Grant program. 

  • Allow year-round Pell Grants to take effect and monitor their impact on student retention and completion.

The goal of the year-round Pell Grant program is to help students continue their studies 12 months a year, ideally graduating faster and with less debt. The impact of this program should be measured over time, but it is important to allow students to adjust their plans and see institutions implement more summer course opportunities before quickly judging the program.

Other proposals, under the guise of supporting students or "right-sizing the program," will actually decrease the students who are able to benefit. To protect the promise of the Pell Grant program, policymakers SHOULD NOT:

  • Make changes to Satisfactory Academic Progress (SAP) requirements that turn the Pell Grant into a merit-based aid program instead of a need-based one.

The purpose of the Pell Grant program is to provide access for students who need funds. Changing the terms of SAP to tighten the merit-based requirements for grant renewal – to a higher grade point average, for example – would force low-income students to meet a loftier bar than their higher-income peers to stay enrolled. SAP requirements for Pell Grant renewal should not be any higher than those requirements that full-pay students face to stay enrolled in good standing at their institution. Click here to learn more about the impact of GPA on Pell Grant recipient retention.

  • Increase the number of credits required to be considered a full-time student, which would cost students more money.

Currently, two-thirds of students attend institutions that charge tuition by the credit hour, even for students who take credits within the standard “full-time” range of 12 to 17 credit hours. At community colleges specifically, 90 percent charge per-credit-hour tuition for students at all course load levels. Increasing the number of credits required to be considered full-time to receive federal financial aid would cost students money. Moving from 12 to 15 credit hours, for example, would add increase tuition bills by 25 percent for students enrolled at the current 12 credit threshold. This proposal would be particularly harmful if Congress does not increase the overall amount of aid available.

  • Decrease the financial aid eligibility levels.

The vast majority of Pell Grant recipients come from families earning $40,000 a year or less. Families must earn less than $23,000 a year to be guaranteed an Expected Family Contribution of $0 – the federal government’s way of saying they shouldn’t have to contribute to the cost of higher education. The fact that these families are all well among the low- to moderate-earners in our country, is a result of the careful targeting of the Pell Grant program. Decreasing financial eligibility below current levels will results in fewer low- and moderate-income students being able to afford college.