Top Democrats Release Plan to Double Pell Grant, Expand Access to DACA Recipients

By Owen Daugherty and Jill Desjean, NASFAA Communications and Policy Staff

Top Democrats from the House and Senate unveiled legislation on Wednesday that would gradually double the maximum federal Pell Grant award over a five-year period and extend eligibility to those enrolled in the Deferred Action for Childhood Arrivals (DACA) program, commonly known as “Dreamers.”

The proposal is the first step in making President Joe Biden’s campaign pledge to double the key financial aid award for low-income students a reality.

The plan calls for immediately increasing the maximum Pell Grant, currently set at $6,495, by $1,475 for the 2022-23 award year. The grant would then see gradual annual increases, eventually reaching $13,000 by the 2028-29 school year, with subsequent automatic increases based on inflation in the years that follow. Students with a negative Student Aid Index (SAI) would be eligible for a maximum grant equal to the annual maximum award plus the amount by which their SAI falls below zero, and means-tested benefits recipients would receive an automatic SAI of -1500. The Pell lifetime eligibility limit would also be increased to 18 semesters, an increase from the current 12-semester cap.

Additionally, the Pell Grant Preservation and Expansion Act would make congressional funding of the Pell Grant program mandatory so recipients “can count on their Pell Grants being fully funded now and into the future” and so program funding can avoid shortfalls, a release outlining the legislation stated. Transitioning the Pell Grant to fully mandatory funding to align the program’s structure with how it operates — as an entitlement — is a change long supported by NASFAA.

The bill would also enact a minimum Pell Grant award of 5% of the maximum award, rather than the current 10%, a change recommended by NASFAA in a recently published issue brief. Permitting students who qualify for at least 5% of the maximum award to receive a Pell Grant would allow more students to receive a Pell award, including those who attend part-time, and would mitigate the possibility of a steep eligibility cliff for students whose SAIs fall just outside of the Pell-eligible range.

NASFAA — along with hundreds of other higher education institutions and groups — has called on Congress to use this session to double the maximum Pell Grant award to $13,000, arguing such an investment will drive economic recovery, help address racial and economic inequities in college completion rates, and increase overall educational attainment.

“NASFAA has long supported the substantial investment this bill provides to strengthen the Pell Grant program and improve access to higher education for our country’s lowest income students. Doubling the maximum Pell Grant is not only a matter of access and economic mobility, but also of social and racial justice, and the financial aid community stands ready to support this effort,” NASFAA President and CEO Justin Draeger said in a statement.

“We have questions regarding provisions in the bill that would dictate new, stricter standards on how often institutions measure and report on Satisfactory Academic Progress (SAP) and provisions that may impact how institutions use their own funds, and we look forward to working with lawmakers on those proposals,” said Draeger, referring to several proposed changes that would remove the flexibility institutions currently have to review SAP either at the end of every payment period or annually. Instead, it would require all institutions to conduct SAP reviews at the end of each payment period, with students failing SAP receiving one payment period of Title IV eligibility on warning status before losing eligibility.

The bill provides for up to two SAP “resets” by which students who leave postsecondary enrollment for two years after failing to meet SAP standards can re-enroll and receive Title IV student aid without the prior failure to meet SAP standards factored into their eligibility. The bill imposes a requirement on the secretary of education to communicate with students who have failed SAP about the availability of the SAP reset. Such a provision would presumably require an additional reporting requirement for institutions, since SAP status is not presently reported to ED.

For some schools, these provisions may be unworkable. While the bill permits institutions with shorter payment periods to review SAP at the end of each semester or equivalent period of 12 to 18 weeks instead of at the end of each payment period, that still does not account for programs that have very short gaps between payment periods. Those institutions will likely be challenged to complete SAP reviews in as short a timeframe as a few days in order to comply with the new rules, leaving students little time to appeal.

Another concern is a provision that would dictate how institutions spend some of their own financial aid. The bill prohibits academic progress standards for institutional need-based aid from being more stringent than federal SAP standards unless the institution could demonstrate to ED the effectiveness of those limitations on improving student persistence in, and completion of, postsecondary study. Finally, the bill imposes a requirement on the secretary of education to communicate with students who have failed SAP about the availability of the SAP reset, which would presumably require an additional reporting requirement for institutions, since SAP status is not presently reported. NASFAA will be meeting with Congressional staff to better understand the concerns these provisions are meant to address and is also reaching out to financial aid administrators to learn more about their potential impacts.

Sponsored by Sens. Patty Murray (D-Wash.), the chair of the Senate Senate Health, Education, Labor, and Pensions (HELP) Committee, and Mazie Hirono (D-Hawaii), along with Reps. Bobby Scott (D-Va.), chairman of the House Committee on Education and Labor, and Mark Pocan (D-Wisc.), the legislation marks the largest proposed investment to the Pell Grant program in years.

“The Pell Grant is the most important tool we have to help students afford college. Unfortunately, due to the rising cost of college, the purchasing power of Pell Grants has severely eroded over time,” Scott said in a statement. “By doubling the maximum Pell award, and adjusting future awards for inflation, the Pell Grant Preservation & Expansion Act will go a long way to restore the purchasing power and help millions of students earn a quality degree, without being forced to take on excessive debt.”

Rep. Virginia Foxx (R-N.C.), the ranking member on the House Committee on Education and Labor, argued the current maximum award is sufficient as it already covers tuition at most community colleges.

"Moreover, doubling the maximum award ignores the root causes of ballooning college costs," Foxx said in a statement. "Congress must first hold colleges accountable for student outcomes before funneling more money into a broken higher education system. Accountability will discourage administrative bloat, reverse skyrocketing tuition rates, and help borrowers take on manageable debt loads."

The bill comes on the heels of a proposed $1,875 combined boost to the Pell Grant for the 2022-23 school year from the Biden administration between the Fiscal Year 2022 budget request and the sweeping American Families Plan. The White House has described the proposed boost as a down payment on the administration’s goal of ultimately doubling the maximum award.

While there is bipartisan support in Congress for the Pell Grant program in general — including incremental increases — it is less clear whether there is support from Republicans for the type of investment from Congress that doubling the Pell Grant would require.


Publication Date: 6/17/2021

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