As the signature federal student aid program providing college access to low and middle-income Americans, the Pell Grant program is a vital bridge to higher education opportunity. Pell Grants have enabled millions of Americans to pursue higher learning by distributing need-based aid to students who otherwise would not be able to afford tuition.
Funding the Pell Grant program is a complex, sometimes confusing process. The Pell Grant funding mechanism can generate shortfalls and surpluses. In times of surplus, the Pell program gathers a “rainy day fund”, which can provide a cushion in case of future deficits or unexpected cost increases.
Unfortunately, the Senate Appropriations Committee recently passed a bill that proposed rescinding $600 million from the Pell Grant “rainy day fund.”
Our new 101 on the Pell Grant Rainy Day Fund provides a quick and easily-digestible summary of Pell Grant funding and how the rainy day fund works. This explainer resource from Higher Learning Advocates breaks down why leaving the surplus untouched is in the best interests of college affordability and the fiscally responsible thing to do.