Amid all the chaos and upheaval for federal higher education policy, the Pell Grant program is running out of money.
In January, the Congressional Budget Office projected a $2.7 billion budget shortfall for the program next fiscal year, its first shortfall in over a decade. By fiscal year 2026–27, the CBO projects that the program will be short $10 billion unless Congress puts more money toward the grants.
The Pell Grant provides need-based federal financial aid for more than 30 percent of American college students. College access advocates have worried for years about the program’s financial health and warn that without a funding increase, low-income students will lose essential funding that already fails to keep up with rising tuition costs and inflation.
Because the Pell shortfall isn’t in the official spending baseline yet, it won’t need to be addressed by the March 14 deadline to pass a federal budget.