Dive Brief:
- Over 60 higher education and advocacy organizations are calling on federal lawmakers to shore up funding for the Pell Grant program amid massive projected shortfalls and a new expansion of the grants.
- Congress should immediately cover the funding gap to “prevent any loss in student eligibility or aid, without cutting funding for any other education programs,” the organizations said Thursday in a letter to U.S. House and Senate leaders.
- They pointed to Congressional Budget Office numbers released last month showing a projected $5.5 billion shortfall in fiscal 2026 for the Pell program, which provides assistance to low-income college students. That gap could jump to $11.5 billion the next year.
Dive Insight:
For most of the past decade, Pell has run surpluses of billions of dollars per year as actual spending fell below the available budget authority of the program. But in fiscal 2025, Pell racked up a cumulative deficit of $6 billion, according to CBO, a nonpartisan agency tasked with providing economic and budget information to Congress.
And it could get worse in the coming years. By 2036, the program could face a cumulative shortfall of $104 billion on its current trajectory when adjusted for inflation, per CBO.
That’s largely in line with a December report from the nonprofit Committee for a Responsible Federal Budget, which projected up to a $97 billion gap over the next decade, with annual shortfalls between $6 billion to $11 billion.
One potential driver of the growing deficit is the most recent expansion of the program under Republicans’ big spending and tax bill enacted last summer. The new law, which takes effect in July, extends Pell Grants to certain workforce training programs as short as eight weeks.
Critics of the law voiced concerns amid its passage that the expansion, called Workforce Pell, could exacerbate financial pressures on the program.
In their letter Thursday, the groups pointed to Workforce Pell as well as other recent expansions that can raise spending, including raising the maximum award, increasing the number of recipients and extending eligibility to incarcerated students.
“These changes reflect a shared understanding that Pell Grants are a vital education policy tool that helps several different student populations gain essential skills and knowledge,” wrote the groups, which include EdTrust, NAACP and The Institute for College Access & Success. “The same bipartisan spirit that enabled those expansions should guide action to stabilize the program’s finances today.”
The letter pressed lawmakers to swiftly shore up Pell so that it can provide predictable aid to students making enrollment and borrowing decisions. Acting now would “protect students from sudden award reductions and possible severe delays or disruptions of their educational experiences,” the organizations wrote.
Longer term, they pointed to the Pell funding process — with Congress deciding specific appropriation numbers each year — as a “structural weakness” and likely source of future issues.
“Because the program relies predominantly on annual discretionary appropriations, it remains vulnerable to budgetary fluctuations and shifting fiscal priorities,” they wrote. “Moving the Pell Grant program to mandatory funding would provide long-term stability, ensure awards keep pace with eligible student demand, and prevent future crises that require emergency fixes.”
