GAO Finds Pell Grant Eligibility Surged After FAFSA Overhaul

A new Government Accountability Office (GAO) report shows significant increases in the number of students who qualified for the Pell Grant and who were eligible to receive the maximum award. The report, released earlier this week, provides the most comprehensive look yet at how the federal overhaul of the Free Application for Federal Student Aid (FAFSA) reshaped Pell Grant eligibility in its first year of implementation.

Key takeaways:

• About 570,000 more students in award year 2024-25 qualified for Pell eligibility compared to the prior year, an increase of 6%.
• Eligibility for the maximum Pell Grant jumped by roughly 1.9 million students, a 31% increase.
• The gains came despite a 2% drop in FAFSA completions (about 260,000 fewer students filed the form), meaning the share of applicants qualifying for a Pell Grant climbed from 65% to 71%.

Most of the increase in overall Pell eligibility was driven by students in the $60,001 to $125,000 household income range, which accounted for at least 61% (roughly 350,000) of the 570,000-student net increase. Within that band, the share of FAFSA filers qualifying for any Pell Grant jumped from 38% to at least 55%.

The numbers are even more dramatic for maximum Pell eligibility. GAO's analysis suggests the number of students with household incomes of $40,001 to $80,000 who qualified for the full $7,395 award more than doubled, rising from about 554,000 in AY 2023-24 to at least 1.3 million in AY 2024-25. GAO pointed to the new automatic maximum Pell criteria tied to percentages of the federal poverty level as a likely contributor to this surge.

Despite the middle-income gains, the fundamental targeting of the program held: at least 75% of all Pell-eligible students in AY 2024-25 had household incomes below $60,001, and the majority of maximum Pell recipients had incomes below $40,001.

Pell-eligible students reporting over $250,000 in assets more than tripled, from about 20,000 to about 69,000. Education officials told the GAO that the vast majority of these students had incomes low enough to trigger automatic maximum Pell eligibility and that some may reflect specific tax-filing scenarios producing low reported income alongside high assets. Still, only about 4% of high-asset FAFSA filers qualified for the maximum award.

The sibling discount vanished, but other changes compensated

One of the most contested elements of FAFSA simplification was the removal of the sibling discount, which had factored the number of family members simultaneously enrolled in college into the aid calculation. Stakeholders had warned that eliminating this provision could reduce eligibility for multi-student families. GAO’s data tell a more nuanced story: overall, 60% of students with other family members in college were Pell eligible in AY 2024-25 (up from 55%), and 77% of those qualified for the maximum award (up from 48%). Other formula changes, such as the increased income protection allowance and the new automatic eligibility criteria, appear to have more than offset the removal of the sibling discount for most families.

That said, GAO’s hypothetical analysis showed that a student in a family of four earning $95,000, with a sibling in college, would have been Pell eligible in AY 2023-24 but not in AY 2024-25, illustrating that individual families at higher income levels may have been negatively affected even as the group benefited overall.

Maximum Pell dominated the award distribution

The proportion of Pell-eligible students qualifying for the maximum award grew substantially, from 65% to 80%. This concentration at the top of the award scale pushed the average Pell award up by $278 (from $6,409 to $6,687), even as the median remained unchanged at the $7,395 maximum. Meanwhile, the share of students qualifying for the smallest Pell amounts ($740 to $1,000) more than doubled from about 1% to over 2%, which Education officials said likely reflects newly eligible students who would not have qualified at all under the old formula.

For more information, please contact:
Justin Monk