New Pell Legislation Would Help Low-Income Students Meet Financial Needs

By Lauren Walizer and Wayne Taliaferro

On May 19, 2017, the U.S. House and Senate introduced the Pell Grant Preservation and Expansion Act, which would modernize the Pell Grant program for today’s students.

Pell is the largest source of federal financial support for postsecondary education for students who demonstrate the greatest need. In addition to economic constraints, Pell Grant recipients are often caring for dependents, returning to school to build their skills, and/or working while enrolled. These students are disproportionately people of color.

The new bill includes reforms that would reduce unmet financial need, an historical barrier to college completion. It would accomplish this by expanding student eligibility to important populations who are currently ineligible or whose eligibility is limited. The bill would also provide higher amounts and more robust calculations of aid as well as a stable, permanent funding source so that students are guaranteed to receive the Pell Grants for which they qualify. CLASP has long supported these reforms, which were included in our recommendations for the Higher Education Act (HEA).

Expands Pell Eligibility to More Students and Makes Other Eligibility Improvements

The bill would make millions of low-income individuals newly eligible for Pell Grants, expanding access to undocumented individuals who came to the United States as children (typically called Dreamers) as well as individuals involved in the justice system. In many states, Dreamers who are residents are charged out-of-state tuition at public institutions. Many of these Dreamers are also ineligible for state aid. Undocumented youth tend to live in low-income families, with more than a third living below federal poverty.

Another overlooked population, incarcerated people, would also regain access to Pell Grants. In 1994, the HEA was amended to exclude this group from Pell, effectively eliminating their postsecondary access. The new bill would restore their eligibility. This aligns with strong evidence that inmates who receive quality postsecondary education in correctional facilities are less likely to recidivate and more likely to secure jobs when they re-enter society. Additionally, the bill would remove questions about prior drug convictions from the application for federal student aid (FAFSA). Further, it would remove eligibility penalties associated with drug convictions.

Previous Pell students who reached their lifetime limit of 12 semesters would become eligible for 2 further semesters. In addition, the bill would restore eligibility for students who were defrauded by an institution while receiving Pell. Extending the lifetime limit is a common-sense proposal that better aligns with the Satisfactory Academic Progress requirement for student aid. However, it would also help students who burn through their eligibility without realizing it. This occurs when they receive poor or no advising, leading them to take irrelevant courses, lose time through credit transfer when they change institutions, or spend time taking remedial education courses. A staggering 40 percent of community college students take remedial courses.

The bill would also provide eligibility for students enrolled in short-term career and technical education programs that are part of a career pathway. CLASP endorsed this approach in our HEA recommendations as well as our commentary on Senator Tim Kaine’s (D-VA) JOBS Act. We are sensitive to concerns that this could lead to abuse by unscrupulous institutions, but the bill would mitigate this potential by:

  • Requiring that the institution be an Eligible Training Provider, as determined by state workforce development officials;
  • Ensuring the program meets the definition of a career pathway under both  HEA and the Workforce Innovation and Opportunity Act (WIOA), including its seven criteria for rigorous, high-quality education, training, and other services; and
  • Placing institutional accreditors in a crucial oversight role.

Provides More Money to Students by Increasing Pell and Expanding Aid Calculations

For all students, both newly and currently eligible, the bill would establish a new maximum Pell award of $6,420 starting in July 2018. This award amount would be permanently indexed to inflation. Indexing the award is essential to maintain its relevance in addressing college affordability. According to estimates, the 2017-2018 Pell award will cover less than 30 percent of the cost of college. Meanwhile, college costs are increasing much faster  than hourly wages, which rose just 9 percent for non-supervisory employees between 1973 and 2009.

For families and working students, the bill would protect more income from the need analysis calculation that determines Expected Family Contribution (EFC). Currently, under the Income Protection Allowance (IPA), very low-income students are able to exclude some earnings from Pell’s calculation of their share of the cost of college expenses. The IPA directly impacts the Pell amount for which students are eligible. Proposals to increase this allowance are gaining momentum. Along with the Pell Grant Preservation and Expansion Act, Senator Tammy Baldwin (D-WI) has proposed increasing the IPA in the Working Students Act. CLASP strongly supports this important reform.

The new Pell bill would also increase the automatic zero EFC income threshold to $34,000. The automatic zero designation allows students and families to complete a significantly shorter FAFSA because it excludes all questions considered unnecessary given their low incomes. When the automatic zero EFC was lowered to $24,000 in 2012, those most impacted were students and families between 150 percent and 190 percent of poverty.

Provides Permanent Stability to Pell Grant Funding

Finally, the bill proposes to fund Pell through mandatory spending, showing strong recognition of the program’s realities. Unlike the current hybrid of discretionary and mandatory funding, fully mandatory funding would ensure students receive the awards for which they’re eligible. It would remove the threat of cutting student eligibility or reducing awards whenever program estimates fall short of demand.


The Pell Grant Preservation and Expansion Act makes student-focused reforms that would support college achievement for low-income and underserved populations. CLASP is glad to see the House and Senate working together on these important changes. We strongly urge Congress to pass this legislation.