30 Jun Could Proposed Pell Grant Changes Affect Your College Choices?
Many changes are anticipated concerning the way college-bound students apply for, and receive, financial aid. Although families have been seeking reform for years, changing a process as entrenched as this can take time.
Hopeful signs of change are on the horizon, however. As part of the Consolidated Appropriations Act of 2021, there will be changes to the Free Application for Federal Student Aid (FAFSA), as well as the federal methodology used for determining aid. The statutory deadline for the changes is the 2023-24 award year, but the Department of Education is already advising that some rollout components may be delayed. One area being watched closely involves the federal Pell Grant program.
What the Federal Pell Grant Program is Today
Federal Pell Grants are usually awarded only to undergraduate students with exceptional financial need. Current eligibility factors include:
- In some cases, students enrolled in a post-baccalaureate teacher certification program might be eligible to receive a Pell Grant.
- Students in federal or state penal institutions, and other specified forms of incarceration. are not eligible to receive Pell Grants.
- Most Pell Grants do not have to be repaid, except in certain circumstances.
- The first step in determining Pell Grant eligibility is to complete the FAFSA.
- Amounts can change yearly. For the academic year from July 1, 2021 through June 30, 2022, the maximum Federal Pell Grant amount is $6,495.
- Award amounts are based on Expected Family Contribution, Cost of Attendance, full- or part-time student status, and plans to attend for a full academic year.
- In certain situations, an eligible student can receive up to 150 percent of his or her scheduled Pell Grant award for an award year.
- Students may not receive Federal Pell Grant funds from more than one school at a time.
- You can only receive Pell Grants for up to 12 terms, or about six years of college education.
- The amount of any other student aid for which you qualify does not affect the amount of your Federal Pell Grant.
Anticipated Changes to the Federal Pell Grant Program
The Pell Grant program has come under pressure to serve as a mechanism to increase college financial aid eligibility. Critics say grant amounts do not keep up with inflation, eligibility is too restricted, and lower-income students do not receive sufficient support to attend college. Anticipated changes from the new legislation include:
- The new law could enable an additional 1.7 million students to qualify for the maximum tuition-aid award each year, and make another 555,000 students newly eligible.
- Federal aid will be calculated based on a family’s adjusted gross income as compared to the federal poverty level for their family size. This two-factor formula gives students earlier awareness of the aid they could receive.
- The law also expands eligibility for the maximum Pell award and creates a new minimum Pell award designation. Families making less than 175%, and single parents making less than 225%, of the federal poverty level will receive the maximum award.
- Lower income students will have their federal student aid eligibility calculated without their assets (or their parents’, for dependent students) being taken into consideration. Eligibility to fill out a no-asset FAFSA will be calculated using filtering based on improved tax return information that comes directly from the IRS.
- The law restores federal financial aid eligibility for incarcerated students and students who were convicted of drug-related offenses.
Some discourse has also been held on whether the Pell Grant should be doubled to better keep up with inflation, and further equalize access to a college education. Nothing has been approved yet, but stay tuned for further developments!
These changes have not yet been fully implemented, and are not planned to be part of the FAFSA that will be introduced on October 1, 2021. In the meantime, set up a CFAA new client free strategy session to learn more about financial aid and finding ways to pay for college. To get the latest financial aid information and college application to-do lists, look for my weekly JustAskJodi emails and check out my monthly CFAA e-newsletter.
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