Pell Grant Eligibility Changes Bring Savings for the Program

When Congress passed the fiscal year 2012 appropriations for education programs last month, it managed to eke out sufficient funds to maintain the maximum Pell award at $5,550 for the 2012-13 school year. But lawmakers also cut the cost of the program to make their budget task a bit easier. They did so by making a number of changes to the eligibility rules for Pell Grant recipients, starting with the 2012-13 school year. These changes will reduce the grant awards students will receive in the upcoming school year, Ceteris paribus, though some students will not be affected by the changes at all.

The eligibility changes Congress made in the 2012 funding bill – raising eligibility requirements for a minimum Pell award, reducing the number of semesters for which awardees can receive Pell Grants, lowering the income level for a zero expected family contribution, and altering eligibility for non-high school graduates – represent only a portion of the changes (and cost savings) proposed by House lawmakers earlier last year.

But that probably isn’t the last anyone will see of the eligibility changes sought by House lawmakers. As we’ve noted before, Congress has been providing the Pell Grant program with supplemental funding a year or two at a time, and those funds are set to run out by fiscal year 2014.

That’s why we’ve made up the attached side-by-side chart showing Pell Grant eligibility rules. It  compares prior law, eligibility changes proposed by the House Appropriations Committee, one-year and five-year cost savings as projected by the Congressional Budget Office, and the final changes enacted in the fiscal year 2012 omnibus appropriations bill (H.R. 2055).