What This Bill Does
This bill changes how the federal government sets the maximum amount of Pell Grants (financial aid for college students). Instead of keeping the maximum grant amount fixed, the bill automatically increases it each year based on inflation (the rising cost of living). The bill aims to help lower-income students keep up with rising college costs.
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Who It Affects
- Students receiving Federal Pell Grants
- Colleges and universities administering Pell Grants
- The U.S. Department of Education
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Key Provisions
- For the 2023–2024 school year, the maximum Pell Grant amount increases and is calculated using a specific formula comparing $6,895 or the prior year's amount to $6,495, with the result rounded to the nearest $5 (Sec. 3(a))
- Starting in the 2024–2025 school year, the maximum Pell Grant increases by the annual adjustment percentage, which equals the percentage change in the Consumer Price Index (a government measure of inflation) for the most recent calendar year before that school year begins (Sec. 3(b))
- For the 2024–2025 school year specifically, the initial increase amount is $1,060, which then becomes the baseline for future automatic increases (Sec. 3(b))
- All maximum Pell Grant amounts are rounded to the nearest $5 each year (Sec. 3(b))
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What Changes
If this bill becomes law, Pell Grant maximum amounts will no longer stay the same year to year. Starting with the 2023–2024 school year, the government will automatically increase the maximum grant amount each year based on inflation. Previously, Congress had to pass new laws to increase Pell Grant amounts.
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Important Definitions
- **Annual adjustment percentage**: The estimated percentage change in the Consumer Price Index (a measure of inflation) for the most recent calendar year before the school year begins (Sec. 3(b))
- **Consumer Price Index**: Not defined in bill text
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Effective Date
The changes for 2024–2025 and beyond take effect under the conditions and date of section 701(b) of the FAFSA Simplification Act (Sec. 3(b)(2)).
I
118TH CONGRESS
1ST SESSION H. R. 1742
To index the maximum value of Federal Pell Grants to inflation.
IN THE HOUSE OF REPRESENTATIVES
MARCH 23, 2023
Mr. CASTEN (for himself, Mrs. LEE of Nevada, Mr. MOULTON, Mr. ALLRED,
Mr. THOMPSON of Mississippi, Ms. GARCIA of Texas, Mr. PETERS, Ms.
LEE of California, Mr. GARCI´A of Illinois, Mr. KILDEE, Ms. TLAIB, Ms.
TOKUDA, Mr. DESAULNIER, Mr. TRONE, Mr. CICILLINE, Ms. ADAMS,
Ms. BONAMICI, Ms. SEWELL, Mr. KRISHNAMOORTHI, Ms. JACOBS, and
Ms. SCHRIER) introduced the following bill; which was referred to the
Committee on Education and the Workforce
A BILL
To index the maximum value of Federal Pell Grants to
inflation.
Be it enacted by the Senate and House of Representa-
1
tives of the United States of America in Congress assembled,
2
SECTION 1. SHORT TITLE.
3
This Act may be cited as the ‘‘Pell Grant Sustain-
4
ability Act’’.
5
SEC. 2. FINDINGS.
6
Congress finds the following:
7
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•HR 1742 IH
(1) The purchasing power of the Federal Pell
1
Grant has declined rapidly since the 1970s. In aca-
2
demic year 1974–1975, the total maximum Federal
3
Pell Grant covered 80 percent of base educational
4
costs at public 4-year institutions of higher edu-
5
cation. By academic year 2020–2021, the maximum
6
Federal Pell Grant covered just 30 percent of those
7
base costs.
8
(2) The value of Federal Pell Grants must keep
9
pace with students’ costs in order to fulfill their mis-
10
sion of enabling lower-income students to attend col-
11
lege.
12
SEC. 3. INDEXING FEDERAL PELL GRANTS TO INFLATION.
13
(a) AWARD YEAR 2023–2024.—Section 401 of the
14
Higher Education Act of 1965 (20 U.S.C. 1070a) is
15
amended—
16
(1) in subsection (a)(1), by striking ‘‘through
17
fiscal year 2017’’ and inserting ‘‘through fiscal year
18
2023’’; and
19
(2) in subsection (b)(7)(C), by amending clause
20
(iii) to read as follows:
21
‘‘(iii) SUBSEQUENT AWARD YEARS.—
22
‘‘(I) AWARD
YEARS
2018–2019
23
THROUGH 2022–2023.—For each of the
24
award
years
2018–2019
through
25
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•HR 1742 IH
2022–2023, the amount determined
1
under this subparagraph for purposes
2
of subparagraph (B)(iii) shall be equal
3
to the amount determined under
4
clause (ii) for award year 2017–2018.
5
‘‘(II) AWARD YEAR 2023–2024.—
6
For award year 2023–2024 and each
7
subsequent award year, the amount
8
determined under this subparagraph
9
for purposes of subparagraph (B)(iii)
10
shall be equal to—
11
‘‘(aa)(AA) $6,895 or the
12
total
maximum
Federal
Pell
13
Grant for the preceding award
14
year (as determined under clause
15
(iv)(II)), whichever is greater, in-
16
creased by a percentage equal to
17
the annual adjustment percent-
18
age for the award year for which
19
the amount under this subpara-
20
graph is being determined; re-
21
duced by
22
‘‘(BB) $6,495 or the max-
23
imum Federal Pell Grant for
24
which a student was eligible for
25
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•HR 1742 IH
the preceding award year, as
1
specified in the last enacted ap-
2
propriation Act applicable to that
3
year, whichever is greater; and
4
‘‘(bb) rounded to the nearest
5
$5.’’.
6
(b) AWARD YEAR 2024–2025, AND EACH SUBSE-
7
QUENT AWARD YEAR.—
8
(1) IN GENERAL.—Section 401(b) of the High-
9
er Education Act of 1965 (20 U.S.C. 1070a(b)), as
10
amended by section 703 of the FAFSA Simplifica-
11
tion Act (title VII of division FF of Public Law
12
116–260), is further amended—
13
(A) by amending paragraph (5) to read as
14
follows:
15
‘‘(5)
TOTAL
MAXIMUM
FEDERAL
PELL
16
GRANT.—
17
‘‘(A) AWARD
YEAR
2024–2025
AND
EACH
18
SUBSEQUENT AWARD YEAR.—For award year
19
2024–2025, and each subsequent award year,
20
the total maximum Federal Pell Grant award
21
per student shall be equal to the sum of—
22
‘‘(i)(I) in the case of award year
23
2024–2025, $1,060; or
24
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•HR 1742 IH
‘‘(II) in the case of award year 2025–
1
2026 and each subsequent award year, the
2
amount determined under this clause for
3
the preceding award year, increased by a
4
percentage equal to the annual adjustment
5
percentage for the award year for which
6
the amount under this clause is being de-
7
termined; and
8
‘‘(ii) the amount specified as the max-
9
imum Federal Pell Grant in the last en-
10
acted appropriation Act applicable to that
11
award year.
12
‘‘(B) ROUNDING.—The total maximum
13
Federal Pell Grant for any award year shall be
14
rounded to the nearest $5.
15
‘‘(C) ANNUAL ADJUSTMENT PERCENTAGE
16
DEFINED.—In this paragraph, the term ‘annual
17
adjustment percentage’, as applied to an award
18
year, is equal to the estimated percentage
19
change in the Consumer Price Index (as deter-
20
mined by the Secretary, using the definition in
21
section 478(f)) for the most recent calendar
22
year ending prior to the beginning of that
23
award year.’’;
24
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•HR 1742 IH
(B) in paragraph (6)(A)(ii), by striking
1
‘‘each of the fiscal years 2024 through 2034’’
2
and inserting ‘‘fiscal year 2024 and each subse-
3
quent fiscal year’’; and
4
(C) in paragraph (8)(A), by striking
5
‘‘through fiscal year 2034’’.
6
(2) EFFECTIVE DATE.—The amendments made
7
by paragraph (1) shall take effect as if included in
8
section 703 of the FAFSA Simplification Act (title
9
VII of division FF of Public Law 116–260) and sub-
10
ject to the effective date of section 701(b) of such
11
Act.
12
Æ
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