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By CCW research  /  
2013 February 6 - 12:00 am

The Federal Pell Grant Program: A Quick Primer

The Federal Pell Grant Program is the bipartisan result of the landmark Education Amendments of 1972, signed by President Richard Nixon. Pell is the foundation of federal student aid, providing access to higher education for low-income undergraduate students seeking for-credit degrees and certificates.

In 1976, the maximum Pell Grant paid for about 72 percent of college costs, while today it only covers about one-third of the cost.

AP Photo

U.S. Sen. Claiborne Pell, a Rhode Island Democrat who served six terms in the Senate, is responsible for creation of the Pell Grant Program. He died in 2009. 
Academically qualified students with demonstrated ability to benefit from attending an eligible college or university may apply for a Federal Pell Grant to help defray costs, based upon a formula established by Congress. Award amounts depend upon financial need, attendance costs, status as a full- or part-time student, and plans to attend college for a full academic year or less.

Two consecutive two-term presidents of both political parties promised a $5,000 maximum Pell award in their campaigns, yet as of the 2008-2009 award year (July 1-June 30), the maximum Pell Grant was $4,731. Investments starting in FY2008 raised the maximum Pell to $5,350 in 2009-2010 and $5,550 in 2010-2011. Students must demonstrate satisfactory academic progress toward a degree or certificate each term to maintain eligibility. It is limited to undergraduates without baccalaureate degrees.

Before the summer of 2010, students could only apply Pell to tuition in order to fund their summer course-taking if they had not depleted funding for which they qualified in the previous academic year. The Higher Education Opportunity Act of 2008 made it possible for some students to qualify for a second summer Pell Grant, with the policy goal of encouraging more students to accelerate and complete their programs more quickly. If a student had a maximum Pell Grant of $5,350 in the Fall 2009 and Spring 2010 terms, that student could qualify for an additional $2,675 of maximum Pell Grant funding in Summer 2010.

To fund a maximum Pell Grant of $5,550 in 2011-2012 cost nearly $40 billion; 3 million more students received Pell in 2012 than in 2009. Increasing Pell requires Congress to appropriate funds; Pell is not an entitlement, so if the number of students exceeds the amounts budgeted, a supplemental appropriation from Congress is needed. In part due to the widespread popularity of the new summer Pell Grant, a $5 billion shortfall caused lawmakers to propose eliminating the new summer Pell Grant funding in their budget request for FY2012, and to pass additional restrictions in June 2012 effective for the fall term of 2012.

Source: The Education Policy Center at the University of Alabama

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