Fact Sheet | October 11, 2011

House FY12 Appropriations Bill’s Expanded Income Definition Hurts the Neediest Students

Currently, only certain forms of untaxed income are considered in determining eligibility for Pell Grants and other student financial aid. The House majority FY12 budget and Labor-HHS appropriations bill would expand the definition of untaxed income to include means‐tested benefits, refundable tax credits, and untaxed Social Security benefits. This would roll back changes from the College Cost Reduction and Access Act of 2007 (CCRAA), which passed with bipartisan support as well as support from numerous higher education and student groups. Expanding the definition of untaxed income would cut Pell Grants for needy students by an estimated $12 billion over the next 10 years, harming college access, completion, and economic growth.

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