A Rare Bit of Good News for Pell Grants: A Surplus

Here’s some good news for Pell Grants. Budget analysts expect the program to run a small surplus in fiscal year 2012. It turns out that Congress overfunded the program ever so slightly over the past few years, and as lawmakers look to finalize fiscal year 2012 funding in the coming days, they are likely to overshoot just a bit on Pell Grant funding. This is particularly good news because for the past few years Congress has done just the opposite—lawmakers have knowingly underfunded the program, throwing fuel on the Pell Grant funding fire.

Because Pell Grants operate like an entitlement, but one for which Congress has to actually appropriate funding (real entitlements don’t need annual appropriations, they are automatically funded), Congress has to estimate how much the program will cost at least a year in advance. That estimate changes throughout the year as new data on student enrollment, income, etc. become available.

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