New CBO Pell Grant Estimate Finds Shortfall Postponed With Fewer Students Projected to Receive Grant

By Hugh T. Ferguson, NASFAA Managing Editor

According to a new analysis, the Pell Grant program is no longer estimated to be in a shortfall for fiscal year 2026, but the positive projections come at the expense of nearly a million fewer students estimated to receive the grant for 2024 and 2025 due to complications with the FAFSA.

The recent analysis from the Congressional Budget Office (CBO) predicts that the Pell Grant program will not face a budget shortfall until fiscal year 2029. This new projection assumes that no new costs are added and that Congress provides the same amount of funding per year through the annual appropriations cycle and does not rescind any funding from the program’s reserve fund. 

In March, President Joe Biden’s budget request provided a supplemental analytical perspectives document, where the administration – seeking to boost the award – predicted a $1.3 billion shortfall in Pell Grant funding in fiscal year 2025, and a $7.8 billion shortfall in 2026 if discretionary Pell Grant funding remains at a baseline.

However, citing issues with the FAFSA rollout, CBO estimates there will be 1.1 million fewer students who receive a Pell Grant for fiscal year 2024 than the Biden administration had projected.

Before issues with the FAFSA were widely reported, the Biden administration projected that 7 million students would receive the grant. CBO now estimates that, due to the barriers to complete the form and significant delays, 5.9 million students will receive Pell.

As a result of the CBO analysis, congressional appropriations, facing stricter budget caps for the upcoming fiscal year, may not be under pressure to cut funding for the program in fiscal year 2025, but the revised expected estimates of the program’s financial health comes at the expense of fewer Pell Grant recipients.


Publication Date: 6/24/2024

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