New Bill Would Double Maximum Pell Grant, Introduce SAP Reset
By Maria Carrasco, NASFAA Staff Reporter
A new bill backed by a group of Democrats would increase the maximum federal Pell Grant award to $10,000 for the 2025-26 award year, and nearly double the maximum Pell Grant over a period of five years after, to $14,000, among other things, such as shifting the Pell Grant program to fully mandatory congressional funding and making changes to institutional Satisfactory Academic Progress (SAP) policies.
The Pell Grant Preservation and Expansion Act was reintroduced by Democratic Sens. Mazie K. Hirono (Hawaii), Patty Murray (Wash.), Jack Reed (R.I.), and Sheldon Whitehouse (R.I.), and Reps. Mark Pocan (Wisc.) and Bobby Scott (Va.), ranking member of the House Committee on Education and the Workforce. The bill was previously introduced in 2021.
“Pell Grants help to make postsecondary education more affordable for thousands of students in Hawaii and millions across the country,” said Hirono in a statement. “However, as the cost of attending college has continued to rise over the years, the purchasing power of the Pell Grant has steadily declined. I’m proud to reintroduce this legislation to restore the value of Pell Grants and enable more students to access higher education.”
Specifically, the bill aims to stabilize federal Pell Grant funding by making the federal program a fully mandatory program that grows with inflation. For example, for award year 2025-26, the total maximum federal Pell Grant award would be $10,000, and would increase by $1,000 each year until reaching $14,000 for 2029-30. In each subsequent year, the total maximum federal Pell Grant award would be increased to account for inflation.
The bill would make funding for the federal Pell Grant fully mandatory, which the lawmakers say would ensure students can count on their Pell Grants being fully funded into the future and protect the program from funding shortfalls.
The proposal would expand Title IV aid eligibility to Dreamers — undocumented students who are not currently eligible for federal student aid due to their citizenship status — and would allow means-tested federal benefit program recipients to automatically qualify for a Student Aid Index equal to -$1,500 if they received those benefits at any time in the previous two years.
Students with negative SAIs could receive up to an extra $1,500 from the Pell Grant — equal to the amount their SAI falls below zero — for a total of $11,500 for 2025-26 and increasing annually.
The legislation seeks to broaden access to the Pell Grant for part-time students by setting the minimum award level at 5% of the maximum award, rather than the current 10%, which the lawmakers argued would ensure part-time students are able to retain access to aid as the maximum award grows.
Additionally, this provision would help prevent “the creation of a cliff effect” since the 10% minimum award threshold would otherwise deny Pell funds to any student eligible for less than $1,400 once the doubled Pell Grant is fully phased in. Instead, when the maximum Pell Grant doubles to $14,000, a student would still be able to receive an award of $700 to support their education, the lawmakers wrote in the bill’s fact sheet.
The bill would also reinstate Pell Grant lifetime eligibility to 18 semesters, up from the current 12 semesters.
The Pell Grant Preservation and Expansion Act also aims to reduce financial aid penalties from Satisfactory Academic Progress (SAP) determinations, and would establish new mandates for an institution's SAP policy for students receiving Title IV aid. For example, it would require that an institution create a SAP policy for Title IV eligibility that is not more burdensome than the policy the institution may already apply to a student who is not receiving Title IV aid. The policy must also be applied consistently to all students, regardless of level in school, enrollment status or educational program.
The bill would also dictate that institutional need-based aid satisfactory progress limitations could not be stricter than the institution’s federal SAP rules, unless the institution could demonstrate stricter standards led to improvements in student completion rates.
Institutions would no longer have the option to review SAP annually and would instead be required to review SAP each payment period, as well as to provide one payment period of financial aid warning. Institutions would still have the option as to whether to provide a payment period of financial aid probation based on an approved appeal or after developing an academic plan.
Students who leave school after failing to meet SAP standards following the mandatory warning and optional probation period, and who do not re-enroll at any other institution for two years would qualify for a SAP reset under the bill. Under the provisions of the reset, courses that were attempted and earned would factor into their SAP calculation moving forward, but unearned credits — whether due to withdrawal, a failing grade — or an incomplete, would not. Students would be eligible to take advantage of this new SAP reset policy only twice.
On top of the SAP policy changes, the bill would require ED to notify each student who left school and did not re-enroll at any institution after failing to meet SAP standards that they are now eligible to receive Title IV aid again. As SAP information is not something that is currently reported to ED by institutions, this would require a significant increase in reporting for institutions.
ED would also be responsible for submitting a report to Congress annually that would detail the outcomes of students who took advantage of the reset policy. The report would include the number of students who re-enroll after the two years to receive the reset, the top 250 institutions with the highest number of enrolled students receiving federal aid after the reset, the top 250 institutions with the highest share students receiving federal aid the rest, and the average rate and time to completion for students who re-enroll. This information would need to be provided to ED by institutions on an annual basis, as they currently do not have access to this kind of data.
Publication Date: 6/28/2024
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