How the Pell Grant Program is Funded and Why It Matters for Students

The Pell Grant program helps more than seven million students attend and complete college each year. It is the federal government’s foundational investment in college affordability and enjoys strong, long-standing bipartisan support. There is clear evidence that need-based grant aid increases college enrollment and completion among low- and moderate-income students.

However, the program’s unique and complex funding structure leads to an inevitable annual mismatch between how much the program costs and how much funding is available. When the program faces a funding shortfall, students are at risk of losing critical financial aid.  

Our latest fact sheet explains how the Pell Grant program is funded, how its funding structure puts students at risk, and how Congress can make changes to ensure the future viability of this essential program.