Pell Grant Preservation and Expansion Act would permanently index Pell Grants to inflation, increasing their purchasing power

WASHINGTON, DC – U.S. Senators Jack Reed (D-RI) and Sheldon Whitehouse (D-RI) teamed up with Senators Mazie K. Hirono (D-HI) and Patty Murray (D-WA) to reintroduce the Pell Grant Preservation and Expansion Act, legislation that would double the Pell grant award, index the award to inflation, and make other changes to expand the award for working students and families. The bill also makes Pell grant funding fully mandatory to protect it from funding shortfalls, expands the program to include DREAMers, and restores lifetime eligibility for the program to 18 semesters, among other changes that will benefit students.

Established by Congress in 1972 and named after former U.S. Senator Claiborne Pell (D-RI), Pell grants offer federal financial aid to help students and families afford college.  Pell grants are awarded based on a student’s financial need and are dependent on the students’ expected family contribution; the cost of attendance; the student’s enrollment status; and whether the student attends a full academic year or less.  Unlike a loan, Pell grants do not have to be repaid.

“Pell grants have opened a world of opportunity to millions of students, and our nation is stronger for it.  Today, keeping the doors of higher education open to all is even more critical as most new jobs require at least some education beyond high school.  These grants can be the difference between students staying in school and getting their degree or dropping out.  This legislation would double Pell grants and help reduce student debt for future generations,” noted Senator Reed, who succeeded Claiborne Pell in the U.S. Senate.  “The Pell grant is the cornerstone of our federal financial aid programs.  But over the years, the grant has covered a shrinking percentage of the actual cost of college, requiring students to take on more debt or, even worse, not continue their education. This legislation would help expand access to Pell grants, lower student debt, strengthen our workforce and economy, and help deserving students achieve their full potential.”

“Higher education can be life-changing, and the Pell Grant program has helped millions of Americans invest in their futures without taking on mountains of debt,” said Senator Whitehouse. “Fifty years ago, Rhode Island’s Claiborne Pell set a course for a generation of Americans to build better lives. Now, we should honor his legacy by modernizing the program, expanding eligibility, and increasing funding to reflect today’s cost of education.”

The Pell Grant Preservation and Expansion Act would:

Double the maximum Pell grant to restore its purchasing power: The scheduled maximum Pell grant for 2021-2022 is $6,495. Under current law, the maximum Pell grant will also remain fixed at this level in Fiscal Year 2022, absent additional discretionary appropriations to the program. This bill would increase the maximum Pell grant by $1,475 for the 2022-2023 award year, and double the maximum Pell grant over a period of five years thereafter, to $13,000, restoring the purchasing power of the Pell grant.

Shift the Pell grant program to fully mandatory funding: By making Pell grant funding fully mandatory, this bill ensures that students can count on their Pell grants being fully funded now and into the future and protects the program from funding shortfalls. In the past, these funding shortfalls have led to eligibility restrictions that have reduced access for students and could lead to cuts in the maximum award. Shifting to fully mandatory funding will ensure that the Pell grant program is stable even during tough economic times.

Help DREAMers afford college: Undocumented students are unfairly restricted from accessing federal financial aid. This bill would extend Pell grant eligibility to DREAMers, help these hardworking students continue their education, and allow our diverse country and society to benefit from the enormous talent and potential of all students.

Reform “Satisfactory Academic Progress” (SAP) requirements: Approximately 40 percent of first-year Pell grant recipients risk losing access to Pell grants due to confusing SAP requirements. Under current law, these penalties have become increasingly strict and disproportionately harm students of color. The consequences are also permanent, denying students with low incomes the opportunity to succeed in higher education with the support of financial aid. This bill promotes student success by providing academic progress warnings to students before they lose financial aid eligibility and resetting Pell grant eligibility two years after a student is enrolled at an institution of higher education.

Help students and families with low incomes: The bill builds on recent improvements to the financial aid formulas to allow students and families who receive a federal benefit program like SNAP or Medicaid to automatically qualify for the maximum aid, and to receive an extra award of up to $1,500 in addition to the maximum Pell grant ($14,500 in total).

Broaden access to Pell for part-time students: The bill sets the minimum award level at 5 percent of the maximum award, rather than 10 percent, to ensure part-time students, such as returning adults who may only be able to take a few classes at a time, are able to retain access to aid as the maximum award grows. This change also prevents the creation of a cliff effect, as the current-law minimum award threshold would otherwise deny aid to any student eligible for less than $1,300 once the doubled Pell grant is fully phased in. Under the bill, as the maximum Pell grant doubles to $13,000, a student will still be able to receive an award of $650 to support their education.

A similar version of this legislation was introduced during the 115th Congress.  Last year, several provisions from that bill were included in the year-end spending package, which restored Pell Grant eligibility for incarcerated individuals, students who have been defrauded, and students with drug-related offenses; raised the “auto-zero” threshold for the program; and increased the income protection allowance—improving the program for students.

The legislation has been endorsed by a diverse coalition that includes: American Association of University Professors (AAUP), American Federation of Teachers (AFT), APIA Scholars, National Association for College Admission Counseling (NACAC), National Education Association (NEA), State Higher Education Executive Officers Association (SHEEO), Student Debt Crisis, Thurgood Marshall College Fund (TMCF), Council for Higher Education Accreditation (CHEA), NASPA - Student Affairs Administrators in Higher Education, Council for Opportunity in Education (COE), American Association of State Colleges and Universities (AASCU), American Association of Community Colleges (AACC), Association of Young Americans (AYA), The Institute for College Access & Success (TICAS), Third Way, Young Invincibles, College and University Professional Association for Human Resources (CUPA-HR), Institute for Higher Education Policy (IHEP), National Association of Independent Colleges and Universities (NAICU), National Association of College and University Business Officers (NACUBO), American Council on Education (ACE), JFF, PIRG, Council for Advancement and Support of Education (CASE), Association of Jesuit Colleges and Universities (AJCU), American Indian Higher Education Consortium (AIHEC), Association of American Universities (AAU), Association of Community College Trustees (ACCT), The Hope Center for College, Community, and Justice, National College Attainment Network (NCAN), Council for Christian Colleges & Universities (CCCU), American Association of Collegiate Registrars and Admissions Officers (AACRAO), Hispanic Association of Colleges and Universities (HACU), Association of Public and Land-grant Universities (APLU), The Education Trust, UnidosUS, and the University of California System.