Pell Grants

Pell Grants

Each year, the Pell Grant program enables more than 9 million of our financially needy students to pay for tuition, books, transportation, and living expenses. Over 3 million of these grants go to community college students, providing them with a pathway to higher education. The Pell Grant remains a valuable investment in a better-educated workforce, higher wages, and a stronger economy. Through these hard economic times, community colleges are leading the way to allow millions of students and workers to gain the valuable education and workforce training they need to meet the demands of the 21st Century. Continued funding for the Pell Grant program is a vital component to our nation’s long-term economic strength and global competitiveness.

 

Community College Facts About Pell Grants

  • 8.36 million credit students attend community colleges (half of all U.S. undergrads).
  • 3.45 million community college students receive a Pell Grant.
  • $11.3 billion in Pell funds awarded annually to community colleges.
  • One-third of all Pell recipients attend community colleges.
  • 78% of Pell recipients at community colleges are working students.

Pell Grants play a much more prominent role in community college student financing than in other sectors for two primary reasons. Community college students, on average, have the lowest incomes, and they also pay the lowest average tuitions—in the fall of 2010, $2,713 for a full-time, full-year student. This means that Pell Grants cover more expenses for community college students than for those attending other types of institutions. This helps to minimize student borrowing; just 10% of all community college students take out federal loans.

Keeping the Pell Grant program whole and maintaining eligibility for needy students remains a priority for ACCT. During consideration of the fiscal year (FY) 2012 omnibus appropriations package, Congress opted to make several eligibility changes to the Pell Grant program to address a financial shortfall.

 

Pell Eligibility Changes

Factsheet on Eligibility Changes

During the summer of 2011, the Pell Grant program was facing an $18.3 billion shortfall over the next two academic years. Congress opted to infuse the program with $17 billion during the debt ceiling negotiations, leaving a more manageable $1.3 billion shortfall for AY 2012 - 2013. In order to maintain the $5,550 maximum and address the $1.3 billion shortfall for AY 2012 - 2013, Congress implemented the four following changes to Pell Grant eligibility in the final FY 2012 omnibus funding package:

  1. Elimination of Ability-to-Benefit Students: Ability-to-Benefit students are those who have not received a high school diploma or GED but have demonstrated their capacity to benefit from college access through testing or course completion. As of July 1, 2012, new students lacking a GED or high school diploma will no longer be eligible for federal student aid. Consequently, 65,000 students who would have received an average grant of $3,932 will not be eligible to receive any Pell Grant funding in 2012 - 2013.
  2. Changes to Income Levels for Zero Expected Family Contribution (EFC): The Expected Family Contribution (EFC) is the amount a student or family is expected to contribute toward college costs. Generally, the lower the EFC, the more financial aid a student is eligible to receive. Under the omnibus, the maximum income for automatic zero EFC students has been reduced from $32,000 to $23,000. This will eliminate 12,000 students from eligibility for an average Pell Grant of $4,098. An additional 274,000 recipients will receive an average of $715 less in Pell funding, but remain in the program, as a result of this change.
  3. Elimination of Students Qualifying for Less than 10% of the Maximum Award: Students eligible for less than the minimum Pell Grant award of $555 no longer qualify to receive Pell as of July 1, 2012. In 2012 - 2013, this means about 3,000 recipients will not receive an average grant of $506.
  4. Reduction in the Maximum Number of Semesters: Students currently may receive a maximum of 18 full-time semesters of Pell Grant awards. Starting on July 1, 2012, this will be reduced to 12 full-time semesters, and it will retroactively impact students currently exceeding 12 full-time semesters. For students who are less than full-time, the cap is applied proportionally to their enrollment. As a result, about 63,000 recipients will not receive an average award of $3,905 in Pell grants in award year 2012 - 2013.

These changes will generate $11 billion in savings over the next 10 years, but they will also knock hundreds of thousands of students out of the program in the coming decade. In the short term, 145,000 recipients will not receive awards in AY 2012 - 2013. For community colleges, elimination of the Ability-to-Benefit (ATB) students represents the greatest impact. However, it is important to note that other proposed changes, such as elimination of less than half-time students and changes to the income protection allowance, were avoided during this round of cuts.