In the next part of this series, we will take a closer look at the other changes made to the Pell Grant program made in the One Big Beautiful Bill Act.
Addressing the Looming Pell Shortfall
Beyond short-term Pell, the bill also tackles the projected shortfall in the Pell Grant program’s funding. The Congressional Budget Office (CBO) has estimated a significant gap beginning in fiscal year (FY) 2026 or roughly $70 billion over the next decade.
To help close part of this gap, the reconciliation bill provides $10.5 billion in mandatory funding as a stopgap measure. While this will not fully eliminate the projected shortfall, it represents a critical down payment to help stabilize the program for the near term and protect students from unexpected funding cuts.
Eliminates Pell Eligibility for Certain Students
The bill would eliminate eligibility for students and their families with high enough incomes and assets that their Student Aid Index (SAI) is twice the amount of the maximum Pell Grant.
For students receiving other non-Title IV grant aid, the bill would also restrict Pell eligibility. Specifically, for “any period” that the student receives grant aid from other federal programs, institutional aid, state aid, or a private source that together equals or exceeds the student’s cost of attendance (COA), the student would not be eligible to receive a Pell Grant.
This could exclude institutional merit scholarship recipients and students receiving grants from free college programs, private foundations, or other entities so long as those funds fully cover the student’s COA (i.e., not just tuition, but also housing, transportation, books, childcare, etc.). Additionally, these periods would count against a student’s 12 semesters of Pell eligibility even though students would not receive Pell grants.
ACTE will continue to post about the various provisions included in the One Big Beautiful Bill Act. If you have any questions or would like to discuss this more in-depth, please contact ACTE’s Government Relations Manager, Jimmy Koch (jkoch@acteonline.org).
