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 | 2021 | 2022 | 2023 | 2024 | 2025 | 2026 | 2027 | 2028 | 2029 | 2030 | 2021– 2025 |
2021– 2030 |
|
| Lower the EFC Cutoff Point to 65 Percent of the Maximum Pell Grant Award | |||||||||||||
| Change in Discretionary Spending | |||||||||||||
| Budget authority | -0.4 | -0.4 | -0.4 | -0.4 | -0.4 | -0.4 | -0.4 | -0.4 | -0.4 | -0.4 | -2.1 | -4.2 | |
| Outlays | -0.1 | -0.4 | -0.4 | -0.4 | -0.4 | -0.4 | -0.4 | -0.4 | -0.4 | -0.4 | -1.8 | -3.9 | |
| Change in Mandatory Outlays | * | -0.1 | -0.1 | -0.1 | -0.1 | -0.1 | -0.1 | -0.1 | -0.1 | -0.1 | -0.4 | -0.8 | |
| Restrict Pell Grants to Students With an EFC of Zero | |||||||||||||
| Change in Discretionary Spending | |||||||||||||
| Budget authority | -6.0 | -6.2 | -6.6 | -6.9 | -7.1 | -7.3 | -7.4 | -7.5 | -7.5 | -7.6 | -32.8 | -70.0 | |
| Outlays | -1.6 | -6.0 | -6.3 | -6.7 | -6.9 | -7.2 | -7.3 | -7.4 | -7.5 | -7.5 | -27.5 | -64.3 | |
| Change in Mandatory Outlays | -0.6 | -2.1 | -2.2 | -2.3 | -2.4 | -2.5 | -2.6 | -2.6 | -2.7 | -2.7 | -9.7 | -22.8 | |
| Limit Pell Grants to Students in Families With Income Below 250 Percent of the Federal Poverty Level | |||||||||||||
| Change in Discretionary Spending | |||||||||||||
| Budget authority | -0.5 | -0.5 | -0.5 | -0.5 | -0.5 | -0.5 | -0.5 | -0.5 | -0.5 | -0.5 | -2.4 | -4.7 | |
| Outlays | -0.1 | -0.5 | -0.5 | -0.5 | -0.5 | -0.5 | -0.5 | -0.5 | -0.5 | -0.5 | -2.0 | -4.3 | |
| Change in Mandatory Outlays | -0.1 | -0.4 | -0.4 | -0.4 | -0.4 | -0.4 | -0.4 | -0.4 | -0.4 | -0.4 | -1.6 | -3.4 | |
This option would take effect in July 2021.
EFC = expected family contribution; * = between −$50 million and zero.
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 on the basis of a student’s expected family contribution (EFC)—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. Students with an EFC exceeding 90 percent of the maximum Pell grant award do not qualify for a grant. Funding for the Pell grant program has both discretionary and mandatory components.
This option would tighten eligibility for Pell grants and could be implemented in one of three ways: lower the EFC cutoff point from 90 percent to 65 percent of the maximum Pell grant award, restrict eligibility to students whose EFC is zero, or limit eligibility to students from families with adjusted gross income below 250 percent of the federal poverty level.