In January, the Congressional Budget Office (CBO) projected a $2.7 billion budget shortfall for the Pell Grant program next fiscal year, its first shortfall in over a decade which was not expected until 2029. 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; without a funding increase, low-income students will lose essential funding to assist with rising tuition costs and inflation. The Pell Grant which relies on mandatory and discretionary funds, increases enrollment and completion rates as well as assists with college affordability. The Pell shortfall isn’t in the official spending baseline yet however, Congress will need to act sometime before Sept. 30, the start of fiscal year 2026.
