	Introduction

The Federal Pell Grant program, authorized by Title IV-A-1 of the Higher Education Act of 1965, (HEA; P.L. 89-329), as amended, is the single largest source of federal grant aid supporting undergraduate students. The program provided approximately $29 billion in aid to approximately 7.2 million undergraduate students in FY2017. Pell Grants are need-based aid that is intended to be the foundation for all federal need-based student aid awarded to undergraduates. When the FAFSA is processed, the individual's expected family contribution (EFC) is calculated. The EFC is the amount expected to be contributed by the student and the student's family toward postsecondary education expenses for the upcoming academic year. In addition, the Pell Grant program is often referred to as a quasi-entitlement because for the most part eligible students receive the Pell Grant award level calculated for them without regard to available appropriations (for more on program funding, see the " Program Funding " section). Among the requirements generally applicable to the HEA Title IV student aid programs for award year (AY) 2018-2019 are the following:
Students must be accepted for enrollment or enrolled in an eligible program at an eligible institution for the purpose of earning a certificate or degree. Academic Year

The HEA Title IV academic year is an IHE-determined instructional unit. Total Maximum Award

The total maximum award amount is the maximum Pell Grant amount that a student may receive in an academic year. The total maximum award is the sum of the discretionary base maximum award and the mandatory add-on award. In accordance with the HEA, the scheduled award is the least of (1) the total maximum Pell Grant minus the student's EFC, or (2) Cost of Attendance (COA) minus EFC. Most students are awarded Pell Grant aid based on the first condition of this rule (i.e., Pell Grant Award = Total Maximum Pell Grant – EFC), since the total maximum Pell Grant award available to a student in an award year is typically less than the student's COA at the attending institution. Annual Award Rule

The annual award is the maximum Pell Grant aid a full-academic-year student can receive at the student's enrollment rate. Year-Round (Summer) Pell Grants

Since award year 2017-2018, qualified students may receive up to 1½ scheduled Pell Grants, or up to 150% of the scheduled award, in each award year. Over her lifetime, a student may receive the value of no more than 12 full-time semesters (or the equivalent) of Pell Grant awards or six scheduled awards. Income of Recipients

Since Pell Grant awards are heavily dependent on EFC levels and the complex EFC formula can yield different EFCs for students with similar incomes, there is no absolute income threshold that determines who is eligible or ineligible for a Pell Grant award. In AY2016-2017, an estimated 95% of Pell Grant recipients had a total family income at or below $60,000. Receipt of Pell Grants and Other Aid

The Pell Grant is intended to be the foundation of federal need-based student aid from Title IV of the HEA. The smaller mandatory funding stream augments the discretionary appropriations to fund the discretionary award level. This multiyear availability allows the discretionary appropriation to operate at a surplus or shortfall in any given year. Permanent, Indefinite Mandatory Appropriations for the Add-On Award

The SAFRA Act also established permanent, indefinite mandatory appropriations for the program to provide for the mandatory add-on award amount in FY2010 and beyond. An appropriated entitlement is a program that receives mandatory funding in the annual appropriations acts, but the level of spending is not controlled through the annual appropriations process. The Pell Grant program is not an entitlement because the program is primarily funded through discretionary appropriations. The discretionary maximum award level has been reduced or not increased. Supplementary mandatory appropriations have been provided for general use in the program, often by generating savings in the Direct Loan program that is funded by mandatory budget authority. There are several approaches for investing the surplus into the program. Student eligibility for Pell Grants may be expanded.
The federal Pell Grant program, authorized by Title IV of the Higher Education Act of 1965, as amended (HEA; P.L. 89-329), is the single largest source of federal grant aid supporting postsecondary education students. Pell Grants, and their predecessor, Basic Education Opportunity Grants, have been awarded since 1973. The program provided approximately $29 billion in aid to approximately 7.2 million undergraduate students in FY2017. Pell Grants are need-based aid that is intended to be the foundation for all need-based federal student aid awarded to undergraduates.
To be eligible for a Pell Grant, an undergraduate student must meet several requirements. One key requirement is that the student and his or her family demonstrate financial need. Financial need is determined through the calculation of an expected family contribution (EFC), which is based on applicable family financial information provided on the Free Application for Federal Student Aid (FAFSA). Although there is no absolute income threshold that determines who is eligible or ineligible for Pell Grants, an estimated 95% of Pell Grant recipients had a total family income at or below $60,000 in academic year 2015-2016. Other requirements include, but are not limited to, the student not having earned a bachelor's degree and being enrolled in an eligible program at an HEA Title IV-participating institution of higher education for the purpose of earning a certificate or degree.
The maximum annual award a student may receive during an academic year is calculated in accordance with the Pell Grant award rules. The student's scheduled award is the least of (1) the total maximum Pell Grant minus the student's EFC, or (2) Cost of Attendance (COA) minus EFC. For a student who enrolls on a less-than-full-time basis, the student's maximum annual award is the scheduled award ratably reduced. For FY2019 (academic year 2019-2020), the total maximum Pell Grant is $6,195. The COA is a measure of a student's educational expenses for the academic year. Qualified students who exhaust their scheduled award and remain enrolled beyond the academic year (e.g., enroll in a summer semester) during an award year receive a year-round or summer Pell Grant. With year-round Pell Grants, qualified students may receive up to 1½ scheduled grants in each award year. Finally, a student may receive the value of no more than 12 full-time semesters (or the equivalent) of Pell Grant awards over a lifetime.
The program is funded primarily through annual discretionary appropriations, although in recent years mandatory appropriations have played an increasing role in the program. The total maximum Pell Grant is the sum of two components: the discretionary maximum award and the mandatory add-on award. The discretionary maximum award amount is funded by discretionary appropriations enacted in annual appropriations acts, and augmented by permanent and definite mandatory appropriations provided for in the HEA. For FY2019, the discretionary appropriation is $22.475 billion and the augmenting mandatory funds total $1.370 billion. The mandatory add-on award amount is funded entirely by a permanent and indefinite mandatory appropriation of such sums as necessary, as authorized in the HEA. The mandatory add-on is estimated to require $6.077 billion in FY2019. Funding provided for the Pell Grant program is exempt from sequestration.
The Pell Grant program is often referred to as a quasi-entitlement because for the most part eligible students receive the Pell Grant award level calculated for them without regard to available appropriations. In a given year, the discretionary appropriation level may be smaller or larger than the actual cost to fund the discretionary maximum award, despite the augmenting mandatory appropriation. When the discretionary appropriation is too small, the program carries a shortfall into the subsequent fiscal year. When the discretionary appropriation is too large, the program carries a surplus into the following fiscal year. Since FY2012, the program has maintained a surplus. The surplus has variably been used to increase Pell Grant awards, expand eligibility, and either fund other programs or reduce the national deficit.