Discretionary Spending
Function 500 - Education, Training, Employment, and Social Services
Tighten Eligibility for Pell Grants
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 | 2023 | 2024 | 2025 | 2026 | 2027 | 2028 | 2029 | 2030 | 2031 | 2032 | 2023– 2027 |
2023– 2032 |
|
| Restrict Pell Grants to Students Eligible for the Maximum Award | |||||||||||||
| Change in Discretionary Spending | |||||||||||||
| Budget authority | -5.8 | -2.6 | -2.7 | -2.8 | -2.9 | -3.1 | -3.2 | -3.2 | -3.2 | -3.3 | -16.8 | -32.8 | |
| Outlays | -1.5 | -4.9 | -2.6 | -2.7 | -2.8 | -2.9 | -3.1 | -3.2 | -3.2 | -3.2 | -14.5 | -30.1 | |
| Change in Mandatory Outlays | -0.5 | -1.7 | -1.1 | -1.1 | -1.1 | -1.2 | -1.3 | -1.3 | -1.3 | -1.3 | -5.5 | -11.9 | |
| Limit Pell Grants to Students From Families With Income Below 250 Percent of Federal Poverty Guidelines | |||||||||||||
| Change in Discretionary Spending | |||||||||||||
| Budget authority | -0.8 | -1.3 | -1.3 | -1.3 | -1.3 | -1.7 | -1.7 | -1.8 | -1.8 | -1.8 | -6.0 | -14.8 | |
| Outlays | -0.2 | -0.9 | -1.3 | -1.3 | -1.3 | -1.4 | -1.7 | -1.8 | -1.8 | -1.8 | -5.0 | -13.5 | |
| Change in Mandatory Outlays | -0.1 | -0.5 | -0.6 | -0.6 | -0.6 | -0.6 | -0.8 | -0.8 | -0.8 | -0.8 | -2.4 | -6.2 | |
This option would take effect in July 2023.
The estimates for this option are relative to the Congressional Budget Office's May 2022 baseline, which does not reflect the effects of the Administration's recent proposed changes to student loans.
The Federal Pell Grant Program is the largest source of federal grant aid to low-income students for undergraduate education. Eligibility for Pell grants is chiefly determined by an individual's student aid index—the amount, calculated using a formula established under federal law, that the government expects a family to contribute toward the cost of the student's postsecondary education. Funding for the Pell grant program has both discretionary and mandatory components.
This option consists of two alternatives that would tighten eligibility for Pell grants. The first alternative would restrict eligibility to students eligible for the maximum award, based on the student's financial need and enrollment status. The second would limit eligibility to students from families with adjusted gross income below 250 percent of the federal poverty guidelines (commonly known as the federal poverty level).