Members Of Congress Introduce Bills To Reinstate Year-Round Pell, Make Funding Automatic

By Megan McClean, Policy & Federal Relations Staff 

Sen. Mazie Hirono (D-HI) and Rep. Ruben Hinojosa (D-TX) introduced Wednesday a college affordability package of bills aimed at strengthening the Federal Pell Grant Program by making its funding automatic and effectively reinstating year-round Pell. The package includes three bills that together would increase the maximum Pell Grant award, move all Pell Grant funds to the mandatory side of the federal budget, and restore the ability for students to receive Pell Grants year-round, while granting institutions the discretion to determine the assignment of crossover periods.

“There is a compelling need to modernize our student aid programs to be flexible to better meet the needs of today’s students,” said NASFAA President Justin Draeger. "The financial aid community is grateful for Sen. Hirono and Rep. Hinojosa’s continuing interest in strengthening the Pell program and we're proud to support those efforts. The financial aid community will be working hard to ensure this program continues to meet the changing needs of students, while continuing to be a fully funded cornerstone of the student aid programs.”

Making Pell Flexible

Introduced first in the 113th Congress, the Year-Round Pell Grant Protection Act would effectively reinstate year-round Pell by allowing continuously enrolled students to receive more than one scheduled award in an award year. While still maintaining the 12-semester or equivalent limit, the bill would allow students to draw down from a “well” of Pell funds at their own pace. Under this format eligible students could, for example, enroll full-time continuously for fall-spring-summer-fall-spring-summer and not experience an interruption in their access to Pell funds. The provision is similar to the previous version of year-round Pell, but with two important distinctions. First, the bill does not include an acceleration clause, which was the basis for the previous regulations on year-round Pell that were widely considered to be overly complicated and burdensome. Second, the bill includes language that requires the Department of Education (ED) to permit institutions to determine the award year to which a summer crossover period would be assigned. 

NASFAA worked with Hirono’s office to develop this bill, with particular attention toward avoiding the complications and burdens that were associated with the last iteration of year-round Pell. In addition, the provisions in this bill closely mirror the Pell Well and Flex Pell concepts NASFAA put forth in the Reimagining Aid Design and Delivery (RADD) project funded by the Bill & Melinda Gates Foundation and NASFAA’s Reauthorization Task Force.

Making Pell 'Mandatory'

The second bill, the Pell Grant Protection Act, would mandate that all Pell Grant funding come from the mandatory spending stream. The Pell Grant currently operates as a quasi-entitlement program, relying on a bifurcated funding stream split between the discretionary and mandatory sides of the budget. The discretionary portion of Pell funding represents the bulk of the program’s funds and is subject to the annual appropriations process. As long as appropriators fund Pell to its authorized discretionary maximum, a mandatory (automatic) amount is added to the discretionary amount, together yielding the total maximum award. The Pell Grant Protection Act would eliminate Pell’s split (and therefore complicated) funding process and move all funds to the mandatory side, thus eliminating the need for Pell to be subject to annual appropriations each year. This essentially provides a guarantee of funds. 

For example, the maximum Pell Grant for the upcoming 2015-16 award year will be $5,775, consisting of $4,860 in discretionary funds and $915 from the mandatory add-on. This bill would make all of those funds mandatory, shielding Pell from yearly funding battles and making it possible to know final Pell awards earlier.

Indexing Pell to Inflation

The third bill, the Pell Grant Cost of Tuition Adjustment Act, assumes that Pell would be fully funded by mandatory funds and calls for an annual increase to the Pell Grant based on the Consumer Price Index for Urban Workers (CPI-W). The bill would also increase the maximum award to match the national average tuition and fees for in-state students at four-year public schools. If this were currently in effect, it would yield a maximum Pell Grant award of $9,139 for award year 2014-15.

NASFAA is encouraged that these bills place a focus on making sure that the Pell program meets the needs of current college students. As lawmakers continue to work to reauthorize the Higher Education Act, these efforts on the part of Hirono and Hinojosa should be an important part of that conversation.


Publication Date: 4/23/2015

Raymond G | 4/29/2015 11:39:40 AM

Although the acceleration clause has been removed it's the flexibility that has me worried. The last time we had year round pell it wasn't just the acceleration clause that was an issue. We noticed many students coming from proprietory schools with cross over payments that also were very manual to calculate and adjust. If the databases like Banner cannot compute or efficiently calculate these amounts then it will be an added administrative burden. In my years in financial aid I've noticed anytime more flexibility is granted to students it adds increased burdens for adminstrators. We should counsel and guide students more than processing for better customer service, loans, etc.

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