Amid all the chaos and upheaval for federal higher education policy, the Pell Grant program is running out of money. In January, the Congressional Budget Office projected a $2.7 billion budget shortfall for the program next fiscal year, its first shortfall in over a decade. By fiscal year 2026–27, the CBO projects that the program will be short $10 billion unless Congress puts more money toward the grants.
The Pell Grant provides need-based federal financial aid for more than 30 percent of American college students. College access advocates have worried for years about the program’s financial health and warn that without a funding increase, low-income students will lose essential funding that already fails to keep up with rising tuition costs and inflation...
While $3 billion is a small chunk of the total education budget, it would be a significant boost to the $34 billion currently in the budget proposal for next fiscal year. Michele Zampini, senior director of college affordability at the Institute for College Access and Success, said the newest Republican push for austerity in higher education funding bodes poorly for the chances of avoiding a Pell shortfall...
The “doomsday scenario,” [Sandy] Baum [of the Urban Institute] said, is that Pell Grants become overtly politicized, where the government bases colleges’ eligibility on things like adherence to new anti-DEI orders. On Feb. 14 the Education Department issued a letter threatening colleges with the loss of federal funding if they did not eliminate all race-conscious programs. “They could decide you don’t get Pell if you go to a school they don’t like,” she said. “It’s extremely unlikely, but it no longer seems out of the question.” ...
Full story at https://www.insidehighered.com/news/government/student-aid-policy/2025/02/24/projected-pell-shortfall-could-diminish-federal-aid.
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