Pell Grants: Overall Student Eligibility Increased After Free Application for Federal Student Aid Simplification

What GAO Found

GAO found that about 570,000 more students were eligible for Pell Grants after the Department of Education implemented the simplified Free Application for Federal Student Aid (FAFSA) for school year (SY) 2024-25 compared with SY 2023-24. In addition, about 1.9 million more students were eligible for the maximum Pell Grant award of $7,395 that year. The increases GAO found occurred even though fewer students completed the FAFSA for SY 2024-25. GAO previously reported that delays and barriers associated with the new FAFSA rollout contributed to fewer students submitting a FAFSA for SY 2024-25.

FAFSA Applicants and Pell Grant Eligibility in School Year 2024-25 Compared with School Year 2023-24

Much of the overall increase in Pell Grant eligibility from SY 2023-24 to SY 2024-25 occurred for students in the household income ranges between $60,001 and $125,000, according to GAO's analysis of Education data. Examining eligibility for the maximum Pell Grant award, GAO's analysis suggests that the most substantial change was the increase in eligible students in the household income ranges between $40,001 and $80,000. This number more than doubled in SY 2024-25 compared with SY 2023-24.

Overall, Pell Grant eligibility also increased among students with other family members in college. Sixty percent of these students were eligible for a Pell Grant in SY 2024-25, compared with 55 percent in SY 2023-24. In addition, 77 percent of Pell-eligible students with other family members in college were eligible for the maximum Pell in SY 2024-25, compared with 48 percent in SY 2023-24. However, GAO found that there may have been circumstances in which some of these students were negatively affected after FAFSA simplification. For example, a student in a family of four with another family member in college and a household income of $95,000 may have been eligible for a Pell Grant in SY 2023-24 but not in SY 2024-25.

In addition, the vast majority (more than 90 percent) of students in vulnerable populations, such as those who were homeless or were in foster care, were eligible for a Pell Grant in SY 2024-25. Most of these Pell-eligible students were also eligible for the maximum Pell.

Why GAO Did This Study

The federal Pell Grant program is the largest source of federal grant aid supporting students' access to higher education. Pell Grants are a type of need-based aid that help primarily undergraduate students from lower-income families pay for college expenses. Eligibility for Pell Grants is determined when students complete and submit the FAFSA. Congress passed the FUTURE Act in 2019 and the FAFSA Simplification Act in 2020 to make it easier for students to apply for federal aid. Education rolled out the simplified FAFSA in late 2023 for aid applications submitted for SY 2024-25. Education announced that accompanying changes to eligibility criteria and aid calculations were expected to expand Pell Grant access to more students.

GAO was asked to examine how student eligibility for Pell Grants changed after FAFSA simplification. This report provides information on changes in Pell Grant eligibility overall and by a variety of student or family characteristics after FAFSA simplification. To conduct this work, GAO reviewed relevant federal laws and Education policies, procedures, and guidance to understand how changes to the FAFSA form and student aid formula could affect students' eligibility for Pell Grants. GAO also analyzed aggregated federal financial aid data from Education on FAFSA completions and Pell Grant eligibility for SY 2023-24 (the last under the old formula) and SY 2024-25 (the first under the new formula). This analysis also examined Pell Grant eligibility by household income and assets, number of other family members in college, and race and ethnicity. GAO also interviewed Education officials and representatives of five organizations with expertise on student aid issues.

For more information, contact Melissa Emrey-Arras at [email protected].