When the Pell Grant Program Faces a Funding Gap, Students Pay the Price. Here’s How Congress Can Fix It.

Note: We published an updated version of this fact sheet in March 2026, which can be found here.

The Pell Grant program is the federal government’s foundational investment in college affordability, helping more than seven million low- and moderate-income students attend and complete college annually. 

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.  

This 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.