Pell Grant
A Pell Grant is a subsidy the U.S. federal government provides for students who need it to pay for college. Federal Pell Grants are limited to students with exceptional financial need, who have not earned their first bachelor's degree, or who are enrolled in certain post-baccalaureate programs, through participating institutions. Originally known as a Basic Educational Opportunity Grant, it was renamed in 1980 in honor of Democratic U.S. Senator Claiborne Pell of Rhode Island to honor his central role in creating the program. A Pell Grant is generally considered the foundation of a student's financial aid package, to which other forms of aid are added. The Federal Pell Grant program is administered by the United States Department of Education, which determines the student's financial need and through it, the student's Pell eligibility. The U.S. Department of Education uses a standard formula to evaluate financial information reported on the Free Application for Federal Student Aid for determining the student's Expected Family Contribution.
Pell Grants were created by the Higher Education Act of 1965. These federal funded grants are not loans, and need not be repaid. Students may use their grants at any one of approximately 5,400 participating postsecondary institutions. These federally funded grants help about 5.4 million full-time and part-time college and vocational school students nationally. As of the 2017–2018 academic year, the top three funded universities by total grant money were CUNY, SUNY, and the University of Phoenix ; three of the top ten funded colleges were for-profit colleges.
History
Today, the Pell Grant program assists undergraduates of low-income families, who are actively attending universities and or other secondary institutions. However, before the Pell Grant became what it is today, it went through numerous changes.In 1965, Congress passed the Higher Education Act of 1965. President Lyndon B. Johnson implemented the HEA as a part of his administration's agenda to assist and improve higher education in the United States. It was the initial legislation to benefit lower- and middle-income students. The HEA program included not only grants but also low-interest loans to students who did not qualify for grants. Universities and other institutions, such as vocational schools, benefited as well from the HEA program, by receiving federal aid to improve the quality of the education process. Student aid programs administered by the US Department of Education are contained in Title IV of the HEA and so are called "Title IV Programs."
In 1972, Title IX Higher Education Amendments were a response to the distribution of aid in the current grant. Senator Claiborne Pell set forth the initial movements to reform the HEA. Lois Rice, an American corporate executive, scholar and education policy expert is known as the "mother of the Pell Grant" for her work lobbying for its creation. The Opportunity Grant Program was intended to serve as the "floor" or "foundation" of an undergraduate student's financial aid package. Other financial aid, to the extent that it was available, would be added to the Basic Grant up to the limit of a student's financial need. Most changes to the federal student aid program result from a process called reauthorization. Through the process of reauthorization, Congress examines the status of each program and decides whether to continue that program and whether a continued program requires changes in structure or purpose. Congress has reauthorized campus-based programs every five or six years, beginning in 1972.
In 1994, Congress passed the Violent Crime Control and Law Enforcement Act, a provision of which revoked Pell Grant funding "to any individual who is incarcerated in any federal or state penal institution." A provision of this Act overturned a section of the Higher Education Act of 1965, which created the Pell Grant for postsecondary education. The provision reads, "No basic grant shall be awarded under this subpart to any individual who is incarcerated in any Federal or State penal institution." Prisoners first became eligible for basic grant funding in 1972. As the principal design of the Pell Grant was to help low-income individuals attain post-secondary education, including prisoners was consistent with the goal. The grant aimed to reach those who might not otherwise have an opportunity to enroll in college study or vocational training programs. Including prisoners for funding was based on the notion that higher education improved the lives of inmates, reduced recidivism, and contributed to a more orderly institution.
There has been some advocacy for reinstating Pell Grant funding for all prisoners who would qualify, despite their incarceration status, by members of the House of Representatives who introduced the Restoring Education and Learning Act in the spring of 2014. At the executive level, the Obama administration backed a program at the Department of Education that would have allowed for a limited lifting of the ban for some prisoners called the Second Chance Pell Pilot.
The ban was lifted by the Consolidated Appropriations Act, 2021.
Higher Education Amendments of 1972
The Higher Education Amendments of 1972 reauthorized the three campus-based programs, leaving the Economic Opportunity Grant Program with the same name, but renaming the two others: the National Defense Student Loan Program became the National Direct Student Loan or Federal Direct Student Loan Program and the Federal Supplemental Educational Opportunity Grant Program. In addition, for-profit schools became eligible to use Title IV Funds. Also, the Educational Opportunity Grant Program was changed to no longer function as a stand-alone program of gift aid but instead was linked with the Basic Grant Program.In 1978, the Middle Income Student Assistance Act of 1978 was signed into act by President Jimmy Carter. This bill provides more generous Basic Educational Opportunity Grants to low-income students, and makes students from families with incomes up to about $25,000 eligible. An additional 1.5 million students from middle-income families became eligible for the Basic Grants program.
Education Amendments of 1978
Starting in 1978, families were able to borrow $300 a year for each dependent child in school regardless of income.Recent legislation
Several changes to the program occurred in 2011. The maximum award amount for the 2011–2012 award year was $5,500. Despite a shortened application process, fewer funds for the 2011–2012 program could lead to financial problems for many students. The government funded the program at $17.1 billion from 2008 to 2010, as part of the American Recovery and Reinvestment Act of 2009. However, the additional funding does not match the needs of increasing numbers of students who enroll in college and qualify for aid through the recession. The Pell Grant program was subject to a $5.7 billion decrease in funding as part of a continuing resolution, which cleared the House in February 2011 and cut about $60 billion from the federal budget. The changes would take effect for the 2011–2012 school year, decreasing the maximum amount of aid for the most needy students from $5,550 to $4,705 a year; in addition, about 1.7 million students who receive smaller Pell Grants would become ineligible for the program. Approval for the cuts is not certain because of long-standing bipartisan support from the Senate. As of April 6, 2011, funds have not been approved, as the Senate has not voted to pass this legislation. The program provided grants ranging from $555-$5,550 to over 9 million students in 2011–2012, with awards totaling $33,575,066,024.In August 2022, President Joe Biden announced that up to $20,000 of debt would be canceled for Pell Grant recipients.
In 2023 and 2024, legislators in both houses of Congress introduced legislation to update, alter, or expand the Pell Grant Program.
- Promoting Employment and Lifelong Learning Act: Introduced in July 2023 by senator Ted Budd , this act seeks to expand Pell Grant eligibility by establishing a sub grant in the “Workforce Pell Grants Program”. The program is designed to support students enrolled in short-term educational programs. It would cover programs that offer 150 to 600 hours of instructional time over an 8 to 15 week period. The legislation’s aim is to provide financial assistance to those pursuing a quick entry to the job market or wish to enhance their skills. As of July 20, 2023 this bill has been introduced to the Senate Committee on Health, Education, Labor, and Pensions.
- Pell Grant Preservation and Expansion Act of 2024: Introduced in mid-2024 by Senator Mazie K. Hirono, this bill proposes an increase in the maximum Pell Grant award. Under this legislation, the maximum would increase from $7,395 to $10,000 for the 2025-2026 award year, alongside increases up to $14,000 over the next five years. After the 2025-2026 award year, the Pell Grant would be increased alongside inflation “…to make sure its purchasing power remains strong in future years.” As of June 20, 2024 this bill has been introduced to the Senate Committee on Health, Education, Labor, and Pensions.
- Degrees Not Debt Act of 2024: Introduced in February 2024 by Representative Salud O. Carbajal , this act set the maximum Pell Grant award for the 2024-2025 and 2025-2026 award years at $14,800. It also has a provision to adjust the maximum award annually based on inflation starting for the 2026-2027 award year. As of February 29, 2024 this bill has been introduced to the House Committee on Education and the Workforce.
One provision, which would have expanded Pell Grants to cover workforce-training programs, was cut from the final bill.