The federal Pell Grant Program serves students from very poor families, according to a new report by the Congressional Budget Office (CBO). However, the ability of the Pell Grant to cover the cost of higher education has declined over time and will continue to in the years ahead. This student aid program was created in 1972 to help improve the access of low-income students to postsecondary education and is the largest federal student aid grant program. For 2012-13, nearly 9 million students across the United States received Pell grants at a cost of $32.4 billion dollars.
The report presents Congress with a range of options for potentially making changes to the federal Pell Grant Program. Eligibility and Pell grant award amounts are determined using various formulas and thresholds. Simply put, the program determines how much a family is expected to contribute towards the cost of a student’s postsecondary education – the estimated family contribution (EFC) – and based on this (EFC), a student may qualify for a Pell grant. The maximum Pell grant award is $5,645 for the 2013-2014 academic year.
The CBO report includes an abundance of data and information regarding the Pell Grant Program; however, the big takeaways highlight the type of students the program serves and the ability of the program to promote college affordability. Read more