The federal Pell Grant program has provided grant aid to low- and moderate-income students since the mid-1970s. With a maximum award of $5,815 in 2016-17, the program makes it possible for many students for whom college would have been out of reach to continue their education. The program is popular on both sides of the aisle but depends on annual appropriations from Congress and is constantly under threat in budget negotiations. Sandy Baum, senior fellow at the Income and Benefits Policy Center at the Urban Institute, puts the program in context.
Is it important to know how many students on campus receive Pell Grants?
About one-third of all undergraduate students receive Pell Grants. But the percentages vary widely across campuses. On some open-admission campuses serving low-income communities, more than 70 or 80 percent of students may receive Pell Grants. On some highly selective private nonprofit campuses, less than 10 percent of students qualify. The public pressure on selective campuses to enroll more low-income students is growing, and the easiest way to measure this is in terms of Pell Grants. For example, the New York Times Upshot created a College Access Index based on this metric combined with the net prices low-income students pay.
On one hand, Pell Grant recipients bring those funds to campus and can put them toward tuition bills. Any institution concerned with socioeconomic diversity and improving educational opportunities will have to pay attention to this indicator.
On the other hand, these students have very limited funds of their own and are likely to need significant amounts of institutional aid if they are not to face high levels of unmet need and rely heavily on borrowing.
How much does the federal government spend on Pell Grants?
Total Pell Grant expenditures increased from $16 billion (in 2015 dollars) in 2005-06 to $39 billion in 2010-11. Congress increased the maximum Pell Grant in the face of rising tuition levels and declining family incomes—both outgrowths of the Great Recession. By design, raising the maximum award automatically increases the income levels at which students are eligible.
Since 2010-11, college enrollment has declined—particularly among low-income older students seeking labor market opportunities— and family resources have rebounded. In 2015- 16, students received about $28 billion in Pell Grants.
Who receives Pell Grants?
In 2015-16, 7.6 million undergraduate students received Pell Grants, up from 5.2 million a decade earlier. But the number of Pell Grant recipients peaked at 9.4 million in 2011-12 and has declined each year since then.
People tend to think of Pell Grant recipients as recent high school graduates from low-income families. But 55 percent of these students are independent for purposes of financial aid. They are either age 24 or older or they are married, have children of their own, are veterans, or have other characteristics making their parents irrelevant for determining their financial need. More than 40 percent of Pell Grant recipients are age 24 or older, and about one-quarter are age 30 or older.
Among younger Pell Grant recipients, 30 percent come from families with incomes less than $15,000, and 75 percent have family incomes below $40,000. Most are first-generation college students.
What should we be watching for as Congress debates Pell Grant policies?
There is strong support now in Congress for modifying the program to allow students additional funding if they want to accelerate their degrees by enrolling over the summer. But there is always tension between pressure to increase the maximum Pell Grant as college prices rise and pressure to find ways to reduce expenditures for the program. We will know more after the election about how these forces are likely to play out.
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