Here’s How Biden Could Double Pell Grant Financial Aid for College Students
Credit: Anna Moneymaker / Staff / Getty Images News / Getty Images- Biden has already made sizable investments in the Pell Grant federal financial aid program.
- Nearly 7 million low- and middle-income students rely on Pell Grants to afford college.
- For years, advocates have pressed presidents to double the maximum award.
President Joe Biden, at last, has a plan to fulfill his campaign promise to double the maximum Pell Grant award.
Advocates lauded the president’s promise to double the award by 2029 in his latest budget proposal.
As the first step in that process, Biden’s budget would increase the award to $8,670 in 2023, a 25.7% increase from what Congress recently approved for the 2022 fiscal year and a 33.5% increase from the 2021 maximum award. Nearly 7 million low- and middle-income students rely on Pell Grants to help pay for college.
Advocates like Rachel Gentry, director of government relations at the National Association of Student Financial Aid Administrators (NASFAA), walk a fine line between expressing gratitude and wanting more robust action.
“I think a lot of advocates will both want to push to double it as soon as possible because we know the needs of students are so great,” Gentry told BestColleges, “but, at the same time, I think [we] recognize this is a step in the right direction.”
There is also the problem of the timetable. A seven-year window to reach doubling would include another presidential election and two midterm elections.
“We don’t know what the political dynamics are going to look like a year from now, let alone 2029.”
— Rachel Gentry, director of government relations at the National Association of Student Financial Aid Administrators
“We don’t know what the political dynamics are going to look like a year from now, let alone 2029,” she added.
Still, there are pathways for the president to reach his goal.
Here’s How Pell Grants Are Funded
To understand how Pell Grants might get doubled, it’s helpful to understand how the federal government funds the program in the first place.
Julie Peller, executive director of Higher Learning Advocates, explained that the Pell Grant program is one of the few federal programs that uses both discretionary and mandatory funds.
Discretionary funds are subject to change year to year through appropriations bills, while mandatory funds will stay consistent unless there is a separate government action, like a standalone law.
Congress has made changes to mandatory spending without a separate process in recent years. Lawmakers have instead baked changes into appropriations bills, although this isn’t supposed to be how it is done, she said.
Only about a sixth of the overall Pell Grant funds come from the mandatory pool of money.
Biden’s 2023 budget proposal aims to increase the discretionary award by $900 and the mandatory award by $1,275.
Mandatory Funding Requires Congressional Action
Peller said it would be possible for Biden to push for a separate bill that lays out a year-by-year process to double the max Pell Grant.
Something similar has been done with Pell Grants before.
President Barack Obama implemented a plan that expanded mandatory spending on Pell Grants to keep up with inflation. From 2013-2017, Congress didn’t need to manually increase mandatory spending on the program; spending rose automatically.
Something similar is logistically possible for Biden, Peller said. He could, for example, plan each year’s increase so that they would go into effect even if he is not reelected in 2024.
However, there are a few reasons Congress may not seek to increase spending this way, she said.
First, putting more money into mandatory spending makes Pell Grants more in line with an entitlement program, which some lawmakers will avoid for political reasons. Second, it will complicate future budget scoring from the Congressional Budget Office and make it more difficult to release a balanced budget.
Discretionary Funding May Not Reach Biden’s Goal
Instead, Biden’s plan will likely have to go through year-by-year increases through future appropriations bills.
The Pell Grant program is generally a bipartisan initiative, said Gentry of NASFAA. It’s not a program fiscal conservatives have looked to cut recently, and Biden’s 2022 omnibus budget bill, which included a $400 increase to the max Pell Grant, passed with bipartisan support.
“The fact that we’re seeing a $400 increase included and [it is] something members of both sides of the aisle are supporting is encouraging,” she said.
So it is possible, if Biden wins reelection or another supporter of the program is his successor, that his goal to double the maximum award by 2029 is reached.
The problem, however, lies in how long the timeline is. The purchasing power of the Pell Grant has already declined significantly since its introduction nearly five decades ago, Gentry said.
“The maximum Pell Grant covered nearly 80% of the cost of a four-year college degree in the early 1970s. Now, it covers less than 30% of that cost.”
The maximum Pell Grant covered nearly 80% of the cost of a four-year college degree in the early 1970s. Now, it covers less than 30% of that cost.
“I think in a world where we’re thinking about what students need,” she said, “we would love to see the maximum Pell Grant doubled all at once.”