Increases Access and Affordability: Doubling the Pell Grant maximum to $13,000 would help restore the purchasing power of the grant. In FY 1975, the grant covered 79% of the average cost of a 4-year public college, all costs to attend a community college, and 38% of the cost of 4-year private non-profit college. Doubling Pell would cover 59% of the average cost to attend a 4-year public college; all costs to attend community college; and 26% of the average cost to attend a 4-year private, nonprofit college.
Reduces Student Debt: The most direct way for the federal government to improve college affordability is to provide increased grant aid directly to students from low and middle income families. Students and families are borrowing more and more to pay for college each year. Doubling Pell would make it possible to narrow the affordability gap for low-income students by reducing the need for them to borrow to pay for college.
Over 20 years, the average amount Pell Grant recipients borrow has increased by 16 percent. In academic year 1995-96, the average amount borrowed among Pell Grant recipients was $5,922 (in 2015-16 dollars, for comparison). The average amount borrowed for community college recipients was $4,038, $6,149 for four-year public recipients, and $6,755 four-year private, nonprofit college recipients. Twenty years later in academic year 2015-16, the average amount borrowed among Pell Grant recipients was $6,863 (16% increase). The average amount borrowed for community college recipients was $4,766 (18% increase), $6,930 for four-year public recipients (13% increase), and $7,397 for four-year private recipients (10% increase)iv.
Helps Meet Student “Basic Needs”: Additional direct grant aid for students to cover cost of attendance, not just tuition, is important because low-income students struggle to meet basic needs like food, housing, health care and childcare, even with tuition assistance. According to the most recent data available, 72 percent of Pell Grant recipients do not live with their parents. A newly released report by the Hope Center on College, Community and Justice found that three out of five college students experienced basic needs insecurity going into the fall 2020 semester.
Increases access and completion: Doubling the Pell Grant will encourage more students to pursue higher education and apply for financial aid. Changes in the FAFSA Simplification Act, passed in December 2020, will result in an additional 1.7 million students qualifying for the maximum grant in 2023. But now, freshman enrollment is down 13 percent across all institution types (19 percent at community colleges), and FAFSA submissions for low-income students are down 6 percent because of the pandemic. Knowing they could receive a substantial grant of $13,000 would motivate more students to apply.
Post-COVID economic recovery: With the COVID-19 pandemic, students need financial aid now more than ever before. The grant's purchasing power is not what it used to be, and students need an updated grant amount to help cope with the financial hardship they have experienced in the last year.
The pandemic has hit low-income families and students especially hard, and how their educational and financial needs are addressed now will affect generations to come. Data from the National College Attainment Network show that, between March 15 and April 15, 2021, there were 24.3 percent fewer Pell Grant-eligible returning FAFSA applicants from families earning less than $25,000 per year, and 20.3 percent fewer from families earning between $25,000 and $50,000 annually, compared to 2019-20.
A report from Third Way may have put it best by noting that "we don't need to reinvent the wheel: Pell Grants already have a track record of helping students both access and complete education beyond high school." The Pell Grant has enjoyed bipartisan support throughout its existence. Students need assistance that is both fair and efficient, and expanding an already existing program is the fastest and most efficient way to achieve that goal.
