Trump aims to slash Pell Grants, which may limit low-income students' college access

CNBC

5 hours ago

For many students and their families, federal student aid is key for college access.
And yet, the Trump administration's budget proposal for fiscal year 2026 calls for significant cuts to higher education funding, including reducing the maximum federal Pell Grant award to $5,710 a year from $7,395, as well as scaling back the federal work-study program. The proposed cuts would help pay for the landmark tax and spending bill Republicans in the U.S. Congress hope to enact.
Roughly 40% of undergraduate students rely on Pell Grants, a type of federal aid available to low-income families who demonstrate financial need on the Free Application for Federal Student Aid. Work study funds, which are earned through part-time jobs, often help cover additional education expenses.
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President Donald Trump's "skinny" budget request said changes to the Pell Grant program were necessary due to a looming shortfall, but top-ranking Democrats and college advocates say cuts could have been made elsewhere and students will pay the price.
"The money we invest in post-high school education isn't charity — it helps Americans get good jobs, start businesses, and contribute to our economy," Sen. Elizabeth Warren, D-Mass., told CNBC. "No kid's education should be defunded to pay for giant tax giveaways for billionaires."
Nearly 75% of all undergraduates receive some type of financial aid, according to the National Center for Education Statistics.
"Historically the Pell Grant was viewed as the foundation for financial support for low-income students," said Lesley Turner, an associate professor at the University of Chicago Harris School of Public Policy and a research fellow of the National Bureau of Economic Research. "It's the first dollar, regardless of other types of aid you have access to."
Under Trump's proposal, the maximum Pell Grant for the 2026-2027 academic year would be at its lowest level in more than a decade.
"The Pell reduction would impact the lowest-income families," said Betsy Mayotte, president of The Institute of Student Loan Advisors, a nonprofit.
More than 92% of Pell Grant recipients in 2019-2020 came from families with household incomes below $60,000, according to higher education expert Mark Kantrowitz.
If the president's cuts were enacted and then persisted for four years, the average student debt at graduation will be about $6,500 higher among those with a bachelor's degree who received Pell Grants, according to Kantrowitz's own calculations.
"If adopted, [the proposed cuts] would require millions of enrolled students to drop out or take on more debt to complete their degrees — likely denying countless prospective low- and moderate-income students the opportunity to go to college altogether," Sameer Gadkaree, president and CEO of The Institute for College Access & Success, said in a statement.
Already, those grants have not kept up with the rising cost of a four-year degree. Tuition and fees plus room and board for a four-year private college averaged $58,600 in the 2024-25 school year, up from $56,390 a year earlier. At four-year, in-state public colleges, the average was $24,920, up from $24,080, according to the College Board.
The Pell program functions like other entitlement programs, such as Social Security or Medicare, where every eligible student is entitled to receive a Pell award.
However, unlike those other programs, the Pell program does not rely solely on mandatory funding that is set in the federal budget. Rather, it is also dependent on some discretionary funding, which is appropriated by Congress.
The Congressional Budget Office projected a shortfall this year in part because more students now qualify for a Pell Grant due to changes to the financial aid application, and, as a result, more students are enrolling in college.
Although there have been other times when the Pell program operated with a deficit, slashing the award amount is an "extreme" measure, according to Kantrowitz.
"Every past shortfall has been followed by Congress providing additional funding," he said. "Even the current House budget reconciliation bill proposes additional funding to eliminate the shortfall."
However, the bill also reduces eligibility for the grants by raising the number of credits students need to take per semester to qualify for the aid. There's a concern those more stringent requirements will harm students who need to work while they're in school and those who are parents balancing classes and child care.
"These are students that could use it the most," said the University of Chicago's Turner.
"Single parents, for example, that have to work to cover the bills won't be able to take on additional credits," Mayotte said.
"If their Pell is also reduced, they may have to withdraw from school rather than complete their degree," Mayotte said.