The Pell Grant

- 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 worksThis section details eligibility for the program, award amounts, how the program is funded, and more.
- Historical changes to the Pell GrantThis section details significant policy shifts to the program.
- BackgroundThis section details the origins of the program.
- Noteworthy eventsThis 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
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- 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
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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—
(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. (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:
(2) Sunset.—Section 401(b)(1)(D) of the Higher Education Act of 1965 (20 U.S.C. 1070a(b)(1)(D)) is amended—
139 STAT. 350
(3) Conforming amendments.—
(b) Federal Pell Grant Ineligibility Due to a High Student Aid Index.—
(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—
“(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—
“(4) Prevention of double benefits.—No eligible student described in paragraph (2) may concurrently receive a grant under both this subsection and—
“(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— (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—
“(B) In this paragraph:
(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]
See also
- Higher education in the United States
- Work requirements policies in the 2025 budget reconciliation bill (One Big Beautiful Bill Act)
- Supplemental Nutrition Assistance Program work requirements
- Federalism-related policies in the 2025 budget reconciliation bill (One Big Beautiful Bill Act)
- Implementation of Supplemental Nutrition Assistance Program provisions from the One Big Beautiful Bill Act (2025)
Footnotes
- ↑ 1.0 1.1 1.2 1.3 Federal Student Aid, "Federal Pell Grants," accessed January 27, 2026
- ↑ Congress.gov, "Pell Grant Program: Major Congressional Proposals, accessed January 27, 2026
- ↑ 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
- ↑ Federal Student Aid, "Indpenedent Student, accessed January 28, 2026
- ↑ The Office of Federal Student Aid, "2025-2026 Federal Student Aid Handbook - Calculating Pell Grants," accessed February 9, 2026
- ↑ Congress.gov, "Eligibility for Participation in Title IV Student Financial Aid Programs," accessed January 27, 2026
- ↑ New America, "Pell Financing Explained," accessed February 9, 2026
- ↑ New America, "Pell Financing Explained," accessed February 9, 2026
- ↑ 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
- ↑ Congress.gov, "H.R.1 - An act to provide for reconciliation pursuant to title II of H. Con. Res. 14." accessed February 10, 2026
- ↑ Note: This text is quoted verbatim from the original source. Any inconsistencies are attributable to the original source.
- ↑ Congress.gov, "Consolidated Appropriations Act, 2021," accessed February 10, 2026
- ↑ Office of Federal Student Aid, "(GEN-23-11) FAFSA Simplification Act Changes for Implementation in 2024-25," accessed February 10, 2026
- ↑ 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
- ↑ 15.0 15.1 15.2 15.3 Congressional Budget Office, "Pell Grants: The Effect of the Higher Education Amendments of 1992," accessed February 10, 2026
- ↑ Congress.gov, "H.R.9567 - Higher Education Act of 1965," accessed February 13, 2026
- ↑ Congress.gov, "Education Amendments of 1972," accessed February 13, 2026
- ↑ Congress.gov, "Higher Education Amendments of 1992," accessed February 13, 2026
- ↑ Congress.gov, "H.R.3355 - Violent Crime Control and Law Enforcement Act of 1994," accessed February 13, 2026
- ↑ Congress.gov, "CONSOLIDATED APPROPRIATIONS ACT, 2021," accessed February 13, 2026
