Overview
- The Committee for a Responsible Federal Budget now projects Pell costs will exceed funding by $6–$11 billion each year, leaving a 10‑year shortfall of $61–$97 billion despite July’s $10.5 billion infusion that likely buys about two years.
- The Congressional Budget Office had warned of a $2.7 billion deficit in fiscal 2025 with the gap nearing $10 billion by the end of fiscal 2026.
- New Workforce Pell benefits for short programs starting July 2026 add uncertainty, with CBO estimating about $2 billion over a decade versus CRFB’s $6 billion‑plus expectation depending on take‑up and enforcement.
- By law, Pell can only run a shortfall for one year before automatic award cuts kick in, a risk for roughly 7 million students who rely on the grants annually.
- Options under debate include tightening eligibility and excluding less‑than‑half‑time students, stricter accountability for Workforce Pell, shifting Pell to mandatory funding, or reallocating federal dollars, as the Education Department negotiates rules that would phase in in‑field job placement requirements after 2027‑28.