New CBO Data Pushes Back Potential Pell Shortfall to 2025

By Brittany Hackett, Communications Staff

More than $22 billion in discretionary funding will have been spent on the federal Pell Grant Program in fiscal year (FY) 2016, according to new data from the Congressional Budget Office (CBO).

Pell Grant funding is comprised of both discretionary and mandatory spending. When only discretionary spending is accounted for, the maximum award is $4,860. However, the addition of mandatory spending increased that grant amount to $5,815.

According to the data, the Pell Grant Program cost just over $22 billion in discretionary funding in FY 2016. When mandatory spending is factored in, the cost of the program for FY 2016 jumps to roughly $28 billion, serving 7.8 million students.

The program will also run on a projected surplus of approximately $7.8 billion for FY 2016. . According to an analysis by the Committee for Education Funding (CEF), the Pell Grant Program will not face a shortfall until FY 2025, assuming Congress level-funds the discretionary funding portion of Pell at $4,860 with continued mandatory supplements. This is positive news for a program that was projected to have a funding shortfall in FY 2017 as recently as 2014.

While the surplus is certainly good news for the financial health of the program, many higher education groups, including NASFAA, have cautioned Congress against redistributing that money among other programs, rather than reinvesting it in the Pell Grant Program.

“Nearly 8 million students are depending on Pell Grants to help them afford and complete college, now and in the coming years. We urge Congress not to undermine Pell Grants by raiding the temporary Pell Grant surplus to fund other programs. Using Pell Grant funds for any other purpose would jeopardize access to college when our nation and economy need a more educated workforce,” Lauren Asher, president of The Institute for College Access & Success (TICAS), said in a statement.

According to the Washington Post, the projected surplus has boosted interest in reinstating the year-round Pell Grant, a move NASFAA has long supported through the Pell Well and Flex Pell concepts we put forth in the Reimagining Aid Design and Delivery (RADD) project funded by the Bill & Melinda Gates Foundation and NASFAA’s Reauthorization Task Force.

 

Publication Date: 3/28/2016


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