President’s Budget Maintains Pell but Cuts Other Student Aid

The President’s Budget Request for FY 2027 was submitted to Congress last week and called for a roughly 4% decrease in spending for the Department of Education, allotting $75.5 billion to the agency. The proposed budget is in keeping with the president’s goal of eliminating the department all together.

The president’s proposed education budget prioritizes an increase of $10.5 billion for the Pell Grant program to pay for maintaining the maximum grant at $7,395, without making changes to the student eligibility criteria.

Addressing the Pell Grant shortfall with additional funding comes at the cost of eliminating most other student aid and higher education programs. Programs proposed for elimination include Supplemental Educational Opportunity Grants, TRIO, GEAR UP, Teacher Quality Partnership Grants, Strengthening Institutions Programs (including the minority-serving institutions), Hispanic Serving Institutions, International Education, FIPSE, and others. The administration proposed similar program eliminations in its FY 2026 budget, which Congress ultimately rejected by enacting level funding across all programs.

The budget proposes approximately $15 billion in program eliminations, with the bulk of those funds redistributed to cover the projected funding shortfall in the Pell Grant program, and to increase Special Education and Charter Schools. The only other programs funded in higher education are Federal Work-Study, albeit at a 90% reduction, and Historically Black Colleges and Universities and Tribally Controlled Colleges and .

According to Office of Management and Budget (OMB) estimates, the infusion of $10.5 billion avoids a funding shortfall in the Pell Grant program. The Congressional Budget Office’s (CBO) estimate of the cumulative Pell Grant shortfall is currently $16.9 billion, significantly higher than the $10.5 billion estimated by the Office of Management and Budget (OMB). Often, OMB and CBO have different estimates for the cost of the Pell Grant program because they use different methodologies to project program costs. However, when Congress writes its appropriations bill, it must use the CBO estimate. An updated estimate could be released prior to congressional appropriators writing their bills.

The submission of the President’s Budget Request signals the beginning of the budget and appropriations process each season. The next steps are for Congress to hold budget hearings and draft House and Senate spending bills to enact by October 1, the beginning of the fiscal year.

For more information, please contact:
Stephanie Giesecke