\n<\/p>\n
Last year, analysts projected a significant long-term budget shortfall for the Pell Grant program\u2014the first in more than a decade\u2014sending shock waves through Congress. <\/p>\n
And while the Legislature tried to address it with a $10.5\u00a0billion Band-Aid, the Congressional Budget Office\u2019s latest projection shows that even such an emergency action won\u2019t be enough to prevent devastating deficits for the long-standing financial aid program that helps low-income students pay for college. <\/p>\n
The report, released late Thursday evening, projects that by the end of fiscal year 2026, which ends Sept. 30, the Pell Grant program will be short $5.5\u00a0billion; that number skyrockets to $11.5\u00a0billion in fiscal year 2027 if Congress doesn\u2019t make cuts or put in new money. And by 2036, the final year included in the CBO\u2019s 10-year projection, the cumulative toll could reach up to $132\u00a0billion if Congress doesn\u2019t up its spending to keep pace with inflation. (The 10-year deficit would be about $104\u00a0billion if adjusted for inflation.)<\/p>\n
\u201cA $100\u00a0billion 10-year projected shortfall isn\u2019t just a wake-up call, it\u2019s a fire alarm,\u201d said Alex Holt, senior adviser for higher education at the Committee for a Responsible Federal Budget.<\/p>\n
Pell awards are already set for the 2025\u201326 academic year and many grants have already gone out the door, so Congress can\u2019t address the shortfall by clawing back federal dollars, experts said. That means lawmakers will have to find the $5.5\u00a0billion before grappling with the larger long-term shortfall.<\/p>\n
Without new money, students in future years could see changes to the maximum award, how many semesters they can use the grant for and when. The last time Pell faced a shortfall, Congress cut eligibility for the grant during the summer term, which was restored in 2017. And last year, when the CBO projected a $2.7\u00a0billion funding gap, the Trump administration proposed cutting the maximum award by more than $1,600 a year and blamed Congress for the program\u2019s \u201cchronic mismanagement.\u201d <\/p>\n
Any cuts to the program would be a blow for the more than seven\u00a0million low-income students who rely on it, advocates say.<\/p>\n
Higher education policy experts and student advocacy groups have warned about the looming consequences of a Pell Grant shortfall for years, but even they say that the scale of the CBO\u2019s numbers came as a bit of a surprise. <\/p>\n
\u201cMost analysts and advocates were of the mind that the $10.5\u00a0billion that Congress generously provided in the [One Big Beautiful Bill Act] would make the program whole through fiscal year 2026,\u201d said David Baime, senior vice president for government relations at the American Association of Community Colleges. <\/p>\n
What this shows, Baime added, is that “substantially more appropriations will be needed\u201d to keep the program afloat.<\/p>\n
Holt added that Congress has largely avoided making tough choices related to Pell and now \u201cthe bill really has come due.\u201d <\/p>\n
\u201cThese one-year fixes are not sustainable. Congress made the program more expensive and now they either need to find a way to cut costs, find the money to pay for it, or both,\u201d he said. \u201cIf you\u2019re worried about low-income students, then you need to be worried about protecting Pell, and to protect Pell you need to get serious about how to pay for it.\u201d<\/p>\n
In the 2020\u201321 academic year, the Pell Grant went to 6.4\u00a0million students, costing $26.5\u00a0billion.<\/p>\n
By this current academic year, about 7.6\u00a0million students received the Pell Grant, according to CBO, which would cost about $34\u00a0billion in discretionary funds. Yet Congress hasn\u2019t substantially increased funding for the program beyond the one-time funding last summer.<\/p>\n
The flat funding is in spite of Congress\u2019s decision in 2020 to expand access to the Pell Grant program as part of the FAFSA Simplification Act. That expansion took effect in spring 2024, and a recent analysis found that 1.5\u00a0million additional students are now eligible to receive the maximum Pell Grant this academic year. <\/p>\n
Starting July 1, that number will only increase more as students in short-term workforce training programs will be able to use the Pell Grant to pay for their classes as well.<\/p>\n
Students in the short-term workforce programs won\u2019t receive nearly as much in aid as the maximum $7,395 that students who are working toward a credential can access. However, experts worry Workforce Pell could exacerbate the shortfall. <\/p>\n
It remains unclear whether and how the Congressional Budget Office accounted for new costs related to Workforce Pell; the regulations that specify which training programs and students are eligible have yet to be finalized. <\/p>\n
Some, like Baime from AACC, say the \u201coverwhelming financial pressure\u201d put on Pell is from the 2020 expansion, not Workforce Pell. But Ben Cecil, the deputy director of higher education policy at Third Way, a left-of-center think tank, says, \u201cWe can\u2019t underestimate the effects of Workforce Pell on the projected shortfall.\u201d<\/p>\n
Education Under Secretary Nicholas Kent addressed the potential shortfall during a talk at the Community College Legislative Summit earlier this week, noting that Pell has had bipartisan support but that the lack of new money could force some \u201chard decisions\u201d at the Education Department. He added that ED wants to work with Congress to identify which areas should be cut versus gain more support and acknowledged that Workforce Pell is a wild card.<\/p>\n
\u201cWe don\u2019t know what the behavioral change will be, which makes costing this out a little bit of an imperfect science at the very beginning,\u201d he said.<\/p>\n
Kim Cook, CEO of the National College Attainment Network, a leading advocacy group for federal student aid, said the numbers for Workforce Pell are \u201csoft,\u201d compared to the \u201cfirm\u201d numbers for FAFSA Simplification. <\/p>\n
\u201cFAFSA Simplification is doing exactly what we hoped for from a policy point of view\u2014that more students are seeing this as a simpler form. The barriers are taken down. They\u2019re completing the form, and they\u2019re getting the aid for which they\u2019re eligible,\u201d she said. \u201cNow the piece is that we have to call on Congress and the president who signed this into [law] to give Pell sufficient funding to keep that promise.\u201d<\/p>\n
But getting Republicans in Congress to support an additional $16\u00a0billion at minimum for the Pell Grant program could prove difficult, especially as lawmakers are looking to trim\u2014not increase\u2014federal spending. Congress has until Sept. 30 to pass a federal budget for fiscal year 2027.<\/p>\n
Rep. Tim Walberg, the Republican chair of the House Education and Workforce committee, said in a statement Friday that the shortfall has been known \u201cfor some time,\u201d and House Republicans want to make the program sustainable for future students.<\/p>\n
\u201cIn reconciliation, House Republicans proposed targeted reforms to reduce the shortfall and encourage completion\u2014a responsible approach that recognizes fiscal realities,\u201d he said. \u201cWe will continue to advocate for concrete solutions to ensure Pell remains strong and focused on students with the greatest need.\u201d<\/p>\n
Rep. Bobby Scott, a Virginia Democrat and ranking member of the House education committee, declined to comment.<\/p>\n
Still, Cook remains hopeful. The Pell Grant has always been a bipartisan program that represents the core beliefs of American democracy, she said, and that should be the kind of leverage that\u2019s needed to get lawmakers on board. <\/p>\n
\u201cWe have a fundamental belief in this country that we should help everyone who wants to pursue higher education be able to afford it,\u201d Cook said. \u201cAnd I think every lawmaker\u2014many of whom have been Pell Grant recipients like me\u2014will look at the need for an educated workforce in their districts and their states and see that this is absolutely a program that demands their support.\u201d<\/p>\n","protected":false},"excerpt":{"rendered":"
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