House Republicans Propose Slashing Pell Grants

On April 29, the House Committee on Education and Workforce advanced a higher education proposal as part of the Republican party’s broader effort to pass a reconciliation package to implement President Trump’s domestic policy agenda. This piece examines how the proposal would impact the Pell Grant program. 

Update: May 19, 2025 

On May 15, the Congressional Budget Office (CBO) released its cost estimates for the higher education provisions in the House Republican proposal. 

By making eligibility for Pell benefits more difficult, the bill would effectively cut Pell Grants by about $67 billion through 2034, reducing grants to low-income students by more than one-fifth from 2027 through 2034. CBO estimates than more than half of Pell students would have their aid reduced in some way, according to an internal analysis by the Center on Budget and Policy Priorities.¹i Only a fraction of the proposed Pell cuts appear in CBO’s cost estimate. That’s because about one-sixth of Pell costs are financed as an entitlement—known as the mandatory supplement—while the remaining five-sixths are financed as annual, regular, non-entitlement appropriations, even though the two methods fund the same benefits. (To its credit, the Appropriations Committees have fully funded Pell benefits for decades.) CBO carefully explains that its formal scoring shows only the cuts to the mandatory supplement even though the bill cuts both types of financing. Bottom line: five-sixths of the cuts are not shown in CBO’s cost estimate, even though students will lose all that aid, but the cited $67 billion figure includes both parts. In addition, the bill provides extra funding to help future discretionary appropriations. CBO shows it because it is technically mandatory funding (just like the extra defense and extra Homeland Security funding elsewhere in the reconciliation bill). But the extra funding doesn’t increase Pell eligibility or benefits; it does not offset any of the bill’s cuts in eligibility and benefits; it just helps the Appropriations Committees hit whatever overall funding targets that may be imposed in future years.

As part of their reconciliation package, House Republicans proposed a set of conflicting changes to the Pell Grant program that would simultaneously cut Pell eligibility for existing students while also expanding the program to cover very short-term workforce training programs. 

Despite strong evidence that grant aid improves student outcomes, the proposal would instead make short-sighted, harmful changes to the Pell Grant program. 

While the proposal claims to address the looming Pell funding shortfall, it would do so not by fully shoring up the program, but by making a one-time increase in mandatory funds while cutting off access to the grant for entire categories of students. 

To actually reduce borrowing, increase completion rates, and make the Pell program truly sustainable, lawmakers should reject the reconciliation proposals and instead: 

1. Increase the maximum award (and index it to inflation) so students don’t need to borrow as much; and
2. Fix the program’s funding structure by shifting it fully to the mandatory side of the budget. 

Slashing Aid for Working Students Would Lower Completion Rates 

Currently, students taking 12 credit hours per term are considered “full-time” and are eligible for the maximum Pell award. The House Republican proposal would increase this “full-time” definition to 15 credit hours. It would also cut off Pell aid entirely for students enrolled less than half-time. Together, these changes will likely decrease enrollment and degree attainment for millions of students.  

Changing the full-time definition from 12 to 15 credits would result in a $1,479 cut to the maximum Pell award for any student taking 12 credits, representing approximately a quarter of Pell recipients, according to an initial analysis published by the National College Attainment Network. For example, a student receiving the current maximum award of $7,395 would see their award drop to $5,916. 

By cutting aid, these proposals would do the opposite of what the evidence says works to improve student outcomes. Numerous studies over the last 20+ years show that grant aid has a positive effect on student outcomes, including college enrollment, credit accumulation, persistence, and degree completion—and the positive effects of grants increase with the average annual amount of grant aid.  

For students attending community colleges, receiving a maximum Pell award (versus a smaller award) “affects enrollment decisions of individuals on the margin” and pushes them to attend. Pell Grants reduce drop-out rates and increase college persistence. 

For some students, taking more credits can lead to completing their degree more quickly. However, if lawmakers were truly looking to incentivize students to take more credits, they would propose to increase supports to enable students to take on more courses, rather than cut aid and make it harder for students to stay enrolled and finish their program.  

Nearly 75 percent of Pell recipients work while enrolled, and working too many hours while in school can make it harder for students to finish their degree.²TICAS calculations using data from the National Postsecondary Student Aid Study for 2019-20 (NPSAS:20 UG). Grant aid helps reduce the number of hours a student needs to work, giving them more time and flexibility to focus on their classes and schoolwork. Unsurprisingly, there is evidence that increased grant aid drives increased completion rates by enabling students to work fewer hours and instead focus on their studies.  

For some students, taking more credits to keep the same amount of aid would come at too steep a cost, as they have work and family commitments that would make it impossible for them to take more classes without losing critical income or leaving those they’re responsible for without a caregiver. Cutting their Pell award would only further impede their academic progress, not incentivize them to take on more classes they cannot manage. The proposal also leaves students little room to maneuver if they need to change their course load unexpectedly and their credits drop below the threshold for aid.  

Alarmingly, these proposals would disproportionately harm student populations that already face higher barriers to college attainment:  

• Black students, Latino students, American Indian or Alaska Native students, students with dependent children, students at public two-year institutions, and students working full-time are more likely to enroll in fewer than 15 credits per term.³TICAS calculations using data from the 2012/2017 Beginning Postsecondary Students Longitudinal Study (BPS:12/17).

• Latino students, American Indian or Alaska Native students, students with dependent children, students at public two-year institutions, and students who work full-time are more likely to be enrolled less than half-time.⁴TICAS calculations using data from the National Postsecondary Student Aid Study for 2019-20 (NPSAS:20 UG).

Making Major Pell Program Changes Without Sufficient Rationale Could Put Program at Risk  

In addition to the cuts to Pell eligibility above, the House Republican proposal would expand the program to cover very short-term programs without sufficient evidence demonstrating that these programs are a sound investment—and without sufficient funding to cover the expansion over time. Before authorizing such an expansion, we have long urged lawmakers to ensure the existing program is on solid financial footing. This proposal would do the opposite.  

The House proposal would also re-write the existing Pell formula to cut off Pell eligibility for students with a student aid index that equals or exceeds twice the amount of the maximum Pell award. We agree that the Pell Grant should be targeted to students with high financial need, but re-opening the financial aid formula is a major policy decision that should not be undertaken without careful consideration of potential unintended consequences, including administrative burden that may outweigh possible incremental benefits to taxpayers. 

The Pell Grant program is the federal government’s most successful and popular investment in college affordability. We urge lawmakers to reject proposed program cuts and instead make long-overdue investments in the existing program—and to ensure any expansion will benefit students and not put the program at risk.