Lawmakers don’t need to decide between increasing Pell Grants for lower-income students or expanding eligibility to more middle-income students, because boosting the maximum award would accomplish both, according to a new report by the National Association of Student Financial Aid Administrators.
“The simplest, most predictable method of expanding Pell Grant eligibility further into the middle class is to increase the maximum Pell Grant award,” the report says. “The concomitant effect of increasing Pell Grant awards to needier students is a feature, not a bug, and reflects the intended design of the Pell Grant program.”
Pell Grant eligibility is determined by subtracting a student’s expected family contribution (EFC) from the maximum Pell Grant award amount, so if the maximum amount is increased, students in higher EFC ranges would become eligible for the award. At the same time, the majority of current Pell recipients would receive an increase in their award equal to the amount of the maximum increase.
The report also suggests changing the federal formula — which determines a student’s EFC — to expand Pell eligibility. It notes that increasing the award and changing the formula aren’t mutually exclusive, but the former lends itself to more predictable and consistent impacts on Pell eligibility.