HEA 101: Pell Grants

Pell Grant Maximum Authorized in Higher Education Opportunity Act (HEOA) of 2008 and College Cost Reduction and Access Act (CCRAA) of 2007

Academic Year	Maximum Grant Authorized in HEOA 2008	Mandatory Add-on from CCRAA 2007	Total Authorized	Actual Appropriated Plus Add-on
2008-09	$5,800 (from 1998 HEA)	$490	$6,290	$4,731
2009-10	$6,000	$490	$6,490	$5,350
2010-11	$6,400	$690	$7,090	$5,550
2011-12	$6,800	$690	$7,490
2012-13	$7,200	$1,090	$8,290
2013-14	$7,600	--
2014-15	$8,000	--

 

Maximum Grant Authorized:  The Higher Education Act authorizes, or allows, Congress to fund maximum Pell Grants up to specified amounts.  When Congress increases the authorized levels for Pell Grants, it demonstrates its commitment to helping students pay for college, and indicates the highest levels it would like to achieve.

While these amounts function as the targets for appropriations, the actual maximum grant is set in the annual appropriations bill.   It is increasingly more difficult to reach these targets.  In fact, the last time Congress funded the maximum grant at its authorized level was in 1979 when it was $1,800. 

Appropriated Maximum Grant:  Congress sets the actual maximum grant level in the Labor-HHS-Education Appropriations bill each year.  Congress uses a formula to calculate how much the Pell Grant program will cost, based on the number of estimated recipients, the estimated amount of the grant they will qualify for, and the estimated maximum grant Congress wants to provide.  Appropriators use that estimate to decide how much they can afford to invest in the Pell Grant program each year. 

For example, for $14 billion in FY 2008, Congress was able to provide Pell Grants from $400 to $4,241, for over five million students.  

Mandatory Add-on:  The College Cost Reduction and Access Act of 2007 created a Mandatory Pell Grant Add-on, which provides every Pell Grant recipient with additional grant aid, stepping up from $490 to $1,090 over five years.  Funding for this add-on comes from cuts to the student loan programs, and is separate from the appropriated base grant. 

For example, a student qualifying for the lowest grant in FY 2008 of $400, would receive an add-on of $490 for a total Pell Grant of $890; and a student qualifying for the maximum grant in FY 2008 of $4,241, would receive an add-on of $490 for a total Pell Grant of $4,731.