Mandatory Spending

Function 500 - Education, Training, Employment, and Social Services

Eliminate the Add-On to Pell Grants That Is Funded With Mandatory Spending

CBO periodically issues a compendium of policy options (called Options for Reducing the Deficit) covering a broad range of issues, as well as separate reports that include options for changing federal tax and spending policies in particular areas. This option appears in one of those publications. The options are derived from many sources and reflect a range of possibilities. For each option, CBO presents an estimate of its effects on the budget but makes no recommendations. Inclusion or exclusion of any particular option does not imply an endorsement or rejection by CBO.

Billions of dollars 2015 2016 2017 2018 2019 2020 2021 2022 2023 2024 2015-2019 2015-2024
Change in Outlays -1.7 -6.5 -7.4 -8.1 -8.2 -8.4 -8.6 -8.7 -8.9 -9.1 -32.1 -75.8

Note: This option would take effect in July 2015. Estimates are relative to CBO’s August 2014 baseline projections.

The Federal Pell Grant Program is the single largest source of federal grants to low-income students for postsecondary undergraduate education. Pell grants are funded through a combination of discretionary spending (which must be appropriated by the Congress every year) and mandatory spending (which is authorized in law permanently). This option would eliminate the add-on to Pell grants, which is the portion of the Pell grant funded by mandatory spending.