The federal Pell Grant program is projected to have a $2.7 billion funding shortfall later this year, potentially leading to eligibility or funding cuts for students. This comes despite efforts to simplify the FAFSA application and increase Pell Grant access. The shortfall is partly attributed to a surge in college enrollment, especially among low-income students, and the Pell program's reliance on both mandatory and discretionary funding.
New projections for the federal Pell Grant program now estimate a $2.7 billion funding shortfall later this year."If program funding is not shored up, students could face eligibility or funding cuts for the first time in more than a decade," said Michele Zampini, senior director of College Affordability at The Institute for College Access & Success.
Now data from the Department of Education shows that many more students are on track to receive Pell Grants this year: As of Dec. 31, more than 9.3 million 2024–25 FAFSA applicants were eligible for a Pell Grant. Among recent high school graduates attending college for the first time, the number of Pell recipients is up 3.3% compared to a year earlier, an increase of approximately 30,000 students.
The Congressional Budget Office's projected change from a surplus to a deficit is due in part to that shift in enrollment figures from a decrease to an increase, according to Kantrowitz.The Pell program functions like other entitlement programs, such as Social Security or Medicare, where every eligible student is entitled to receive a Pell award.
Pell Grants Funding Shortfall College Affordability FAFSA Enrollment Increase
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