Pell Grant Program Faces a Potential Budget Crisis, Fiscal Policy Group Says

The federal Pell Grant program will see a significant funding shortfall over the next decade unless changes are made, according to an analysis from the Committee for a Responsible Federal Budget, a fiscal policy think tank. Closing the shortfall will require increased federal spending, smaller awards, tighter eligibility rules or a combination of the three, researchers said. They predict benefits would need to be reduced by 10% or funding raised by 12% in order to close the budget gap under their best-case scenario, a $35 million shortfall over the next decade. Many higher education experts have championed expanding the Pell Grant program by doubling the maximum award or expanding eligibility to short-term programs. Although the latter policy is still before Congress, other expansions could be a difficult sell to lawmakers due to the predicted costs.