How We Can Double the Pell Grant

Doubling the Pell Grant has become an increasingly popular policy proposal over the past months, one that’s supported by many advocates as well as the Biden Administration. Such a change would be a huge win for students. Pell Grants are already an essential support for nearly seven million lower-income students, but the rising cost of higher education has outpaced the program. Founded in the 1970s to help any student, regardless of their income, attend college, the Pell Grant initially covered most of students’ expenses. In the 1979–1980 academic year, it covered more than three-quarters of the cost of college at the time. Today, things look a bit different. The maximum Pell Grant award for the 2021–2022 school year is $6,495, less than a quarter of the average cost of attending a four-year college. It’s clear that something has to change and doubling Pell would help lower-income students afford the rising costs of attending college. But when doubling Pell, we must act carefully. Such a change is more complicated than it seems and if not done right, could create lasting problems for future students.

To understand what makes doubling Pell tricky, it’s important to first look backward. In 2009, when I served as Senior Education Policy Advisor for the US House of Representatives Committee on Education and Labor, we tried to tackle a similar problem. To help Americans get back on their feet and pursue higher education so they could return to work after the Great Recession, policymakers looked to increase the Pell Grant as part of the American Recovery and Reinvestment Act. The stimulus package ultimately boosted the maximum Pell Grant by $500 for two years, from $4,850 to $5,350. This sounds like very little compared to todays’ calls for doubling Pell, but it was a big deal. And though this change certainly helped students, it also created a serious problem that had to be addressed a few years down the line.

Though Congress passed the $500 increase, it only had the funds to sustain this increase for two years. Because the stimulus funds were outside of the Pell Grant’s usual funding process (Pell Grants are funded largely through appropriations — funding is appropriated as a one-time sum that is estimated based on the grant amount), the $500 increase would not automatically continue. When funds ran out, Congress stepped in the following year with SAFRA (Student Aid and Fiscal Responsibility Act of 2009), which did three things. It expanded mandatory Pell Grants (entitlement spending for the purposes of increasing the Pell Grant maximum award) and tied the increase in Pell Grant maximum values to annual increases in the Consumer Price Index plus one percent. It also provided $13.5 billion to continue the $500 increase first provided in the stimulus. This meant that students, thankfully, didn’t see any disruption or decrease in their grants.

Doubling the current maximum Pell Grant ($6,495 per student) is not a small or inexpensive feat, and doing so for a short period of time is an understandable temptation with historical precedence. But, it’s risky to double Pell for a short time period or as an emergency measure. Changes to the program need to be made permanent and must be sustainable over the long term. Students do need that support now, but they also needed it before the pandemic, and they’ll need it for years down the road.

When doubling Pell, policymakers should keep the following principles in mind:

• Make sure it’s permanent, either through mandatory or discretionary appropriations, there must be a long-term plan for sustaining the increase.
• Consider making Pell an entitlement program. Right now, Pell is an anomaly when it comes to government programs — it’s funded mainly through appropriations but functions like an entitlement program in that if a student is eligible they receive the aid. Changing how Pell is funded could be a solution.
• Don’t cap eligibility for the maximum grant amount. Because a student’s eligibility for the Pell Grant is a function of the maximum Pell Grant minus their student aid index, doubling Pell will allow for “higher-income” students to receive the grant, but that’s not a reason to cap it. Those students are still struggling to meet the cost of college. And creating a cap (like was done when mandatory Pell grants were first created) will create confusion for students and families in addition to creating a cliff between the “double Pell” and “single Pell” students. This would create a lot of complexity that Congress just worked hard to eliminate.
• Index the increase to inflation. Doubling Pell is already a huge increase, but if the grant isn’t indexed to increase with inflation, we will find ourselves back in the same place in the not too distant future.
• Ensure Pell works for all students. While Congress is at it, they should make sure that Pell works for all of today’s students. Allowing Pell Lifetime Eligibility Usage (LEU) to be reset for students who have already reached the maximum amount of Pell Grants, already hold a degree or credential, and have been employed in the workforce for the majority of the past ten years would allow returning adult students a more affordable path back into higher education.

It’s essential that today’s students, especially lower-income Americans who rely on the Pell Grant, can afford college, even with the rising costs of higher education. Doubling the Pell Grant would absolutely be a step in the right direction and a huge help for many students. But if Congress and the Biden Administration move forward with doubling Pell, the changes must be sustainable. If not, we run the risk of leaving future students without the help they need.