Election law changes? Our legislation tracker’s got you. Check it out!

The Pell Grant

From Ballotpedia
Jump to: navigation, search
Education Banner Blue.png
See also: Higher education in the United States

The Pell Grant is a need-based federal program that provides eligible students with financial aid for postsecondary education expenses. The Pell Grant is not a loan program, and students do not need to repay funds received through it.[1]

It is the largest student aid program run by the federal government; it provided $31 billion to around 6.5 million undergraduate students in Fiscal Year (FY) 2023.[2]

Under the Pell Grant program, institutions of higher education reimburse students enrolled in approved coursework for the costs of attending the institution. The size of the award amount is calculated by financial need and course load. For the award year starting July 1, 2025, the maximum Federal Pell Grant award was $7,395.[1]

The Pell Grant was enacted as part of the Higher Education Act of 1965 and began awarding funds in 1973. It was originally called the Basic Educational Opportunity Grant, but was renamed the Pell Grant after Senator Claiborne Pell (D) in 1980. Congress has modified the program since its creation, including through the One Big Beautiful Bill Act of 2025, which, among other changes, created the Workforce Pell Grant.[3]


  • How it works
    This section details eligibility for the program, award amounts, how the program is funded, and more.
  • Historical changes to the Pell Grant
    This section details significant policy shifts to the program.
  • Background
    This section details the origins of the program.
  • Noteworthy events
    This section provides a timeline of noteworthy events related to the administration of the program.


How it works

Broadly, Pell Grant disbursement is as follows:

1. Students apply for the Pell Grant using the Free Application for Federal Student Aid (FAFSA).
2. The Office of Federal Student Aid (FSA) pays the university the grant award for the student.
3. The university applies the Pell Grant Award to tuition, fees, and housing costs. The university disburses any remaining grant money to the student.

Click the tabs below to see details about student eligibility, award amount calculations, the role of the university, and how the Pell Grant program is funded.

To receive a Pell Grant award, students must meet requirements for all federal student aid programs and those specifically for the Pell Grant, as implemented by Title IV of the Higher Education Act (HEA).

General HEA Title IV student aid requirements:[3]

  • Students must be accepted for enrollment or enrolled in an eligible program11 at an eligible IHE for the purpose of earning a certificate or degree.
  • Students must not be enrolled in an elementary or secondary school and must have a high school diploma (or equivalent).
  • Students must meet a citizenship requirement.
  • Students must maintain satisfactory academic progress while enrolled. Satisfactory academic progress requires a minimum grade point average (or its equivalent) and passing a minimum percentage of attempted credits or hours.
  • Students must not be in default on a Title IV student loan, or have failed to repay or make an arrangement to repay an overpayment on a Title IV grant or loan, or be subject to a judgment lien for a debt owed to the United States. Students must have repaid any Title IV funds obtained fraudulently.
  • Students may be disqualified for an unusual enrollment history—receiving HEA Title IV aid at multiple schools in the same semester, or receiving aid and withdrawing before earning any credit.


Pell Grant-specific eligibility requirements:[3]

  • Students must be enrolled in an undergraduate course of study.
  • Students must not have already completed the curriculum requirements of a bachelor's or higher degree.
  • Students must be enrolled in non-foreign institutions.
  • Students must be financially needy students as determined under the program's award rules.
  • Incarcerated students must be enrolled in a prison education program.
  • Students with a significant intellectual disability must be accepted for enrollment or enrolled in a comprehensive transition and postsecondary program.
  • An independent student (and spouse) who is not required to file a tax return(s) and a dependent student whose parent(s) is not required to file a tax return(s).
  • A child who is under age 33 and whose parent or guardian died in the line of duty while serving on active duty as a member of the U.S. Armed Forces on or after September 11, 2001.
  • A child who is under age 33 and whose parent or guardian died in the line of duty while actively serving as and performing the duties of a public safety officer.


Other eligible students include:[1]

  • Students enrolled in eligible workforce credential programs (beginning July 1, 2026).
  • In some circumstances, students enrolled in postbaccalaureate teacher certification programs.

Historical changes to the Pell Grant

Changes implemented by the One Big Beautiful Bill Act (2025)

The One Big Beautiful Bill Act (OBBBA), signed into law on July 4, 2025, by President Donald Trump (R), enacted the following changes to the Pell Grant program.[9]

  • Established the Workforce Pell Program. This program allowed students, beginning July 1, 2026, to receive a Pell Grant award for career-focused, short-term programs. Student eligibility was calculated the same for this program as for other undergraduate degrees. The bill required governors to approve Workforce Pell programs for their state that meet the following requirements:
    • Programs must run for between 150-600 hours and for more than 8 but less than 15 weeks.
    • Programs must meet the needs of employers in the state.
    • Meeting certain performance metrics
    • Having a completion rate of at or above 70%, and a job placement rate of at or above 70%.
    • The costs of the programs must not outweigh the value-added earnings of graduates after three years in the workforce.
    • Students must receive a certification upon graduating from the program.
    • Credits earned in these programs must be transferable to a higher degree program.
  • Provided $10 billion in mandatory funding. This didn't change any policy related to the program. It addressed a Congressional Budget Office estimate of a funding shortfall for Fiscal Year 2025-2026.
  • Included foreign income exclusions reported in a student's adjusted gross income calculation. This changed the FAFSA process by requiring students to report their own, their parents', or their spouse's foreign income. The amount must be included in the Pell Grant award calculation.
  • Prohibited Pell Grant awards for students receiving grant aid from non-Federal sources that covers all educational costs. This amendment specified that students are not eligible to receive Pell Grant awards if they are receiving non-federal grant money that equals or exceeds the cost of attending an eligible program.
  • Made applicants with a Student Aid Index (SAI) twice the amount of the maximum Pell Grant award ineligible for a grant award. This exclusion did not apply to students receiving the Pell Grant under special rules, as detailed above.Cite error: Invalid <ref> tag; invalid names, e.g. too many[9]
  • Excluded net worth of small businesses, family farms, and commercial fishing businesses from Student Aid Index (SAI) asset calculation. This change, found in Section 80001 of OBBBA, reinstituted an exclusion from SAI calculations that was removed by the FAFSA Simplification Act (2021).Cite error: Invalid <ref> tag; invalid names, e.g. too many[9]

The text of the Pell Grant section of OBBBA was as follows:[10]

SEC. 80001. EXEMPTION OF CERTAIN ASSETS.

(a) Exemption of Certain Assets.—Section 480(f)(2) of the Higher Education Act of 1965 (20 U.S.C. 1087vv(f)(2)) is amended—

(1) by striking “net value of the” and inserting the following: “net value of—
“(A) the”
(2) by striking the period at the end and inserting a semicolon; and
(3) by adding at the end the following:
“(B) a family farm on which the family resides;
“(C) a small business with not more than 100 full-time or full-time equivalent employees (or any part of such a small business) that is owned and controlled by the family; or
“(D) a commercial fishing business and related expenses, including fishing vessels and permits owned and controlled by the family.”

(b) Effective Date and Application.—The amendments made by subsection (a) shall take effect on July 1, 2026, and shall applywith respect to award year 2026–2027 and each subsequent award year, as determined under the Higher Education Act of 1965 (20 U.S.C. 1001 et seq.).

...

SEC. 83001. ELIGIBILITY.
(a) Foreign Income and Federal Pell Grant Eligibility.—

(1) Adjusted gross income defined.—Section 401(a)(2)(A) of the Higher Education Act of 1965 (20 U.S.C. 1070a(a)(2)(A)) is amended to read as follows:

“(A) the term ‘adjusted gross income’ means—
“(i) in the case of a dependent student, for the second tax year preceding the academic year—
“(I) the adjusted gross income (as defined in section 62 of the Internal Revenue Code of 1986) of the student’s parents; plus
“(II) for Federal Pell Grant determinations made for academic years beginning on or after July 1, 2026, the foreign income (as described in section 480(b)(5)) of the student’s parents; and
“(ii) in the case of an independent student, for the second tax year preceding the academic year—
“(I) the adjusted gross income (as defined in section 62 of the Internal Revenue Code of 1986) of the student (and the student’s spouse, if applicable); plus
“(II) for Federal Pell Grant determinations made for academic years beginning on or after July 1, 2026, the foreign income (as described in section 480(b)(5)) of the student (and the student’s spouse, if applicable);”

(2) Sunset.—Section 401(b)(1)(D) of the Higher Education Act of 1965 (20 U.S.C. 1070a(b)(1)(D)) is amended—

(A) by striking “A student” and inserting “For each academic year beginning before July 1, 2026, a student”; and

139 STAT. 350

(B) by inserting “, as in effect for such academic year,” after “section 479A(b)(1)(B)(v)”.

(3) Conforming amendments.—

(A) In general.—Section 479A(b)(1)(B) of the Higher Education Act of 1965 (20 U.S.C. 1087tt(b)(1)(B)) is amended—
(i) by striking clause (v); and
(ii) by redesignating clauses (vi) and (vii) as clauses (v) and (vi), respectively.
(B) Effective date.—The amendment made by subparagraph (A) shall take effect on July 1, 2026.

(b) Federal Pell Grant Ineligibility Due to a High Student Aid Index.—
(1) In general.—Section 401(b)(1) of the Higher Education Act of 1965 (20 U.S.C. 1070a(b)(1)) is amended by adding at the end the following:

“(F) Ineligibility of students with a high student aid index.—Notwithstanding subparagraphs (A) through (E), a student shall not be eligible for a Federal Pell Grant under this subsection for an academic year in which the student has a student aid index that equals or exceeds twice the amount of the total maximum Federal Pell Grant for such academic year.”

(2) Effective date.—The amendment made by paragraph (1) shall take effect on July 1, 2026.

SEC. 83002. WORKFORCE PELL GRANTS.

(a) In General.—Section 401 of the Higher Education Act of 1965 (20 U.S.C. 1070a) is amended by adding at the end the following:

“(k) Workforce Pell Grant Program.— "(1) In general.—For the award year beginning on July 1, 2026, and each subsequent award year, the Secretary shall award grants (to be known as ‘Workforce Pell Grants’) to eligible students under paragraph (2) in accordance with this subsection.

“(2) Eligible students.—To be eligible to receive a Workforce Pell Grant under this subsection for any period of enrollment, a student shall meet the eligibility requirements for a Federal Pell Grant under this section, except that the student—

“(A) shall be enrolled, or accepted for enrollment, in an eligible program under section 481(b)(3) (hereinafter referred to as an ‘eligible workforce program’); and
“(B) may not—
“(i) be enrolled, or accepted for enrollment, in a program of study that leads to a graduate credential; or
“(ii) have attained such a credential.

“(3) Terms and conditions of awards.—The Secretary shall award Workforce Pell Grants under this subsection in the same manner and with the same terms and conditions as the Secretary awards Federal Pell Grants under this section, except that—

“(A) each use of the term ‘eligible program’ (except in subsection (b)(9)(A)) shall be substituted by ‘eligible workforce program under section 481(b)(3)’;
“(B) the provisions of subsection (d)(2) shall not be applicable to eligible workforce programs; and
“(C) a student who is eligible for a grant equal to less than the amount of the minimum Federal Pell Grant because the eligible workforce program in which the student is enrolled or accepted for enrollment is less than an academic year (in hours of instruction or weeks of duration) may still be eligible for a Workforce Pell Grant in an amount that is prorated based on the length of the program.

“(4) Prevention of double benefits.—No eligible student described in paragraph (2) may concurrently receive a grant under both this subsection and—

“(A) subsection (b); or
“(B) subsection (c).

“(5) Duration limit.—Any period of study covered by a Workforce Pell Grant awarded under this subsection shall be included in determining a student’s duration limit under subsection (d)(5).”

(b) Program Eligibility for Workforce Pell Grants.—Section 481(b) of the Higher Education Act of 1965 (20 U.S.C. 1088(b)) is amended—
(1) by redesignating paragraphs (3) and (4) as paragraphs (4) and (5), respectively; and

(2) by inserting after paragraph (2) the following:“(3)(A) A program is an eligible program for purposes of the Workforce Pell Grant program under section 401(k) only if—

“(i) it is a program of at least 150 clock hours of instruction, but less than 600 clock hours of instruction, or an equivalent number of credit hours, offered by an eligible institution during a minimum of 8 weeks, but less than 15 weeks;
“(ii) it is not offered as a correspondence course, as defined in 600.2 of title 34, Code of Federal Regulations (as in effect on July 1, 2021);
“(iii) the Governor of a State, after consultation with the State board, determines that the program—
“(I) provides an education aligned with the requirements of high-skill, high-wage (as identified by the State pursuant to section 122 of the Carl D. Perkins Career and Technical Education Act (20 U.S.C. 2342)), or in-demand industry sectors or occupations;
“(II) meets the hiring requirements of potential employers in the sectors or occupations described in subclause (I);
“(III) either—
“(aa) leads to a recognized postsecondary credential that is stackable and portable across more than one employer; or
“(bb) with respect to students enrolled in the program—
“(AA) prepares such students for employment in an occupation for which there is only one recognized postsecondary credential; and
“(BB) provides such students with such a credential upon completion of such program; and
“(IV) prepares students to pursue 1 or more certificate or degree programs at 1 or more institutions of higher education (which may include the eligible institution providing the program), including by ensuring—
“(aa) that a student, upon completion of the program and enrollment in such a related certificate or degree program, will receive academic credit for the Workforce Pell program that will be accepted toward meeting such certificate or degree program requirements; and
“(bb) the acceptability of such credit toward meeting such certificate or degree program requirements; and
“(iv) after the Governor of such State makes the determination that the program meets the requirements under clause (iii), the Secretary determines that—
“(I) the program has been offered by the eligible institution for not less than 1 year prior to the date on which the Secretary makes a determination under this clause;
“(II) for each award year, the program has a verified completion rate of at least 70 percent, within 150 percent of the normal time for completion;
“(III) for each award year, the program has a verified job placement rate of at least 70 percent, measured 180 days after completion; and
“(IV) for each award year, the total amount of the published tuition and fees of the program for such year is an amount that does not exceed the value-added earnings of students who received Federal financial aid under this title and who completed the program 3 years prior to the award year, as such earnings are determined by calculating the difference between—
“(aa) the median earnings of such students, as adjusted by the State and metropolitan area regional price parities of the Bureau of Economic Analysis based on the location of such program; and
“(bb) 150 percent of the poverty line applicable to a single individual as determined under section 673(2) of the Community Services Block Grant Act (42 U.S.C. 9902(2)) for such year.

“(B) In this paragraph:

“(i) The term ‘eligible institution’ means an eligible institution for purposes of section 401.
“(ii) The term ‘Governor’ means the chief executive of a State.
“(iii) The terms ‘in-demand industry sector or occupation’, ‘recognized postsecondary credential’, and ‘State board’ have the meanings given such terms in section 3 of the Workforce Innovation and Opportunity Act.”

(c) Effective Date; Applicability.—The amendments made by this section shall take effect on July 1, 2026, and shall apply with respect to award year 2026–2027 and each succeeding award year.

SEC. 83003. PELL SHORTFALL.

Section 401(b)(7)(A)(iii) of the Higher Education Act of 1965 (20 U.S.C. 1070a(b)(7)(A)(iii)) is amended by striking “$2,170,000,000” and inserting “$12,670,000,000”.

SEC. 83004. FEDERAL PELL GRANT EXCLUSION RELATING TO OTHER GRANT AID.

Section 401(d) of the Higher Education Act of 1965 (20 U.S.C. 1070a(d)) is amended by adding at the end the following:

“(6) Exclusion.—Beginning on July 1, 2026, and notwithstanding this subsection or subsection (b), a student shall not be eligible for a Federal Pell Grant under subsection (b) during any period for which the student receives grant aid from non-Federal sources, including States, institutions of higher education, or private sources, in an amount that equals or exceeds the student’s cost of attendance for such period.”[11]

FAFSA Simplification Act (2021)

The FAFSA Simplification Act was signed into law on December 27, 2020, as part of the Consolidated Appropriations Act of 2021. It made the following changes to the Pell Grant, among others:[12][13]

  • Replaced Expected Family Contribution (EFC) with Student Aid Index (SAI). This amended the need analysis formula used to calculate grant awards, switching to the SAI formula.
  • Established automatic maximum Pell Grant for students with AGI below 175% or 225% of poverty guidelines. Though dependent on dependency or marital status, this change established automatic maximum awards for students under a certain income threshold. It also expanded Pell eligibility based on family size and federal poverty level, comparing the number of dependents (either for an independent applicant, or for the parents of a dependent applicant) to AGI.
  • Restored Pell eligibility for incarcerated students enrolled in Prison Education Programs. The Violent Crime Control and Law Enforcement Act of 1994 removed Pell Grant eligibility for incarcerated students.
  • Changed how part-time enrollment affects awards. This replaced enrollment categories of full-time, three-quarter-time, half-time, and less-than-half-time with a measure of enrollment intensity calculated through a formula.

Student Aid and Fiscal Responsibility Act (2010)

The Student Aid and Fiscal Responsibility Act (SAFRA) was signed into law on March 30, 2010, by President Barack Obama (D) as part of the Health Care and Education Reconciliation Act of 2010. It made the following changes to the Pell Grant, among others:[14]

  • Created a mandatory add-on award. This change required Pell Grant awards to include a mandatory add-on amount, funded by the mandatory appropriation. The add-on supplemented the award amount calculated by financial need and course load, which is funded by the discretionary appropriation.
  • Indexed award amounts to inflation. This required the Pell Grant award to automatically adjust with inflation annually.
  • Changed eligibility rules related to drug offenses. This change removed penalties for possession of controlled substances and increased penalties for the sale of controlled substances.

Higher Education Act amendments of 1992

President George H.W. Bush (R) signed the Higher Education Amendments of 1992 into law on July 23, 1992. It included the following changes related to the Pell Grant program, among others.[15]

  • Repealed the Secretary's authority to reduce awards due to funding shortfalls. This established the program as a quasi-entitlement program, meaning the award amount a student is eligible for does not change, regardless of the Pell Grant Program's funding status.[15]
  • Removed home and farm equity from a family's income calculation in determining award amount. This expanded the number of students with award amounts calculated by a simplified needs test.[15]
  • Created the Free Application for Federal Student Aid (FAFSA) as the single federal application. This streamlined all the federal student aid applications into one.[15]

Historical statistics

This section contains historical statistics about the Pell Grant.


Below is a map depicting the percentage of students in each state receiving a Pell Grant.

  • New Hampshire has the highest percentage of students receiving an award at 43.6%. Louisiana had the second highest with 41.7%, and Mississippi had the third highest at 41.6%.
  • North Dakota had the lowest percentage of students receiving an award at 20.6%, and Wyoming had the second lowest with 22.7%.



Below is a pie chart representing the percentage of students receiving Pell Grants by family annual income.

  • Students with family income between $6,000 and $20,000 annually accounted for 48.26% of students receiving a Pell Grant.
  • Students with family income over $60,000 accounted for 6.51% of students receiving a Pell Grant


Noteworthy events

This section contains a timeline of events that changed Pell Grant policy. Several bills that make significant appropriations for the program are not included in the timeline.

  • July 4, 2025

    President Donald Trump (R) signed the One Big Beautiful Bill Act, enacting changes to the Pell Grant program, including establishing the Workforce Pell Program.

  • December 27, 2020

    President Donald Trump (R) signed the FAFSA Simplification Act as part of the Consolidated Appropriations Act of 2021. It replaced Expected Family Contributions (EFCs) with the Student Aid Index (SAI) to calculate awards, restored Pell eligibility for incarcerated students, created an automatic Pell award for students with an AGI below a certain threshold, and reduced the number of questions asked by the FAFSA form.[20]

  • September 13, 1994

    President Bill Clinton (D) signed the Violent Crime Control and Law Enforcement Act of 1994, which removed Pell eligibility for incarcerated students.[19]

  • July 23, 1992

    President George H.W. Bush (R) signed the Higher Education Amendments of 1992 into law, creating the Free Application for Federal Student Aid (FAFSA) form, changing how Pell awards were calculated, and prohibiting the Education Secretary from reducing Pell awards due to program funding shortfalls.[18]

  • June 23, 1972

    President Richard Nixon (R) signed the Higher Education Amendments of 1972 into law, establishing eligibility criteria, award structure, and participation requirements for institutions of higher education (IHEs).[17]

View all

See also

Footnotes

  1. 1.0 1.1 1.2 1.3 Federal Student Aid, "Federal Pell Grants," accessed January 27, 2026
  2. Congress.gov, "Pell Grant Program: Major Congressional Proposals, accessed January 27, 2026
  3. 3.0 3.1 3.2 3.3 3.4 3.5 3.6 3.7 Congress.gov, "Federal Pell Grant Program of the Higher Education Act: Primer," accessed January 27, 2026
  4. Federal Student Aid, "Indpenedent Student, accessed January 28, 2026
  5. The Office of Federal Student Aid, "2025-2026 Federal Student Aid Handbook - Calculating Pell Grants," accessed February 9, 2026
  6. Congress.gov, "Eligibility for Participation in Title IV Student Financial Aid Programs," accessed January 27, 2026
  7. New America, "Pell Financing Explained," accessed February 9, 2026
  8. New America, "Pell Financing Explained," accessed February 9, 2026
  9. 9.0 9.1 9.2 [National Association of Student Financial Aid Administrators, "Federal Student Aid Changes from the One Big Beautiful Bill Act ," accessed February 8, 2026
  10. Congress.gov, "H.R.1 - An act to provide for reconciliation pursuant to title II of H. Con. Res. 14." accessed February 10, 2026
  11. Note: This text is quoted verbatim from the original source. Any inconsistencies are attributable to the original source.
  12. Congress.gov, "Consolidated Appropriations Act, 2021," accessed February 10, 2026
  13. Office of Federal Student Aid, "(GEN-23-11) FAFSA Simplification Act Changes for Implementation in 2024-25," accessed February 10, 2026
  14. The United States Congress, "S.Con.Res.13 - An original concurrent resolution setting forth the congressional budget for the United States Government for fiscal year 2010, revising the appropriate budgetary levels for fiscal year 2009, and setting forth the appropriate budgetary levels for fiscal years 2011 through 2014." accessed April 2, 2026
  15. 15.0 15.1 15.2 15.3 Congressional Budget Office, "Pell Grants: The Effect of the Higher Education Amendments of 1992," accessed February 10, 2026
  16. Congress.gov, "H.R.9567 - Higher Education Act of 1965," accessed February 13, 2026
  17. Congress.gov, "Education Amendments of 1972," accessed February 13, 2026
  18. Congress.gov, "Higher Education Amendments of 1992," accessed February 13, 2026
  19. Congress.gov, "H.R.3355 - Violent Crime Control and Law Enforcement Act of 1994," accessed February 13, 2026
  20. Congress.gov, "CONSOLIDATED APPROPRIATIONS ACT, 2021," accessed February 13, 2026