Significant changes to federal student aid are included in the $1.4 trillion FY21 appropriations package passed by Congress and sent to President Trump.
Major changes to Pell Grants include:
- Maximum grant amount increases $150 to $6,495
- An additional 555,000 students will be eligible each year for Pell Grants
- Another 1.7 million Pell Grant recipients will be eligible for the maximum annual Pell award
- Income levels that automatically qualify students for the maximum Pell Grant award are significantly increased
- $7 billion total cost over 10 years associated with these changes
The Consolidated Appropriations Act of 2021 also includes modest increases in other federal student aid programs, including:
- Supplemental Educational Opportunity Grants: $880 million (an increase of $15 million)
- Federal Work Study: $1.19 billion (an increase of $10 million)
- TRIO: $1.097 billion (an increase of $7 million)
- GEAR UP: $368 million (an increase of $3 million)
- Strengthening Institutions Programs: $789 million (an increase of $29.5 million)
- Title VI International Education: $78 million (an increase of $2 million)
- Teacher Quality Partnership Grants: $52 million (an increase of $2 million)
Major revisions to federal student aid distribution are included in the appropriations bill.
The bill also rewrites how federal student aid is distributed (the first time in nearly 30 years), including simplification of FAFSA (Free Application for Federal Student Aid). Additionally, the bill forgives all outstanding loans for Historically Black Colleges and Universities (HBCUs) in the HBCU Capital Financing Loan program, totaling more than $1.3 billion.
The changes in federal student aid also create challenges for families – the new formula no longer considers the number of family members in college, which will hurt any family supporting more than one student in college at the same time.
These changes do not go into effect until 2023.