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Dive Brief: 

  • The maximum Pell Grant for fiscal year 2024 would increase by $250 — to $7,645 — under a bipartisan spending proposal passed by the Senate Appropriations Committee last week. 
  • The committee voted 26-2 to recommend a total budget of $79.6 billion for the U.S. Department of Education, which would provide the agency with flat funding in line with current spending levels. 
  • Meanwhile, the House Appropriations Committee two weeks earlier proposed just $67.4 billion for the Education Department, representing a roughly $12 billion reduction from current spending levels. The cuts would include keeping funding for the Pell Grant program flat and eliminating certain student aid programs. 

Dive Insight: 

Although the House and Senate proposals for Education Department funding differ widely, they both fall well short of President Joe Biden’s proposed budget. In March, he had pitched $90 billion for the agency, including boosting the maximum Pell Grant award to $8,215. 

That plan didn’t have much chance of getting through a deeply divided Congress, where Republicans dominate the House, and Democrats hold only a narrow majority in the Senate. 

But hopes for elements of Biden’s blueprint to pass were further dashed when congressional lawmakers cut a deal in June to raise the debt ceiling limit, averting a potential economic disaster. Under that agreement, lawmakers flat-funded federal education spending for fiscal 2024 and limited increases to 1% for fiscal 2025. 

Although the Senate’s plan includes a Pell Grant increase, the proposed hike would be smaller than recent expansions. The maximum award grew by $400 in fiscal 2022 and $500 in fiscal 2023. 

Even with those increases, the Pell Grant — designed to help low- and moderate-income students afford college — has much less purchasing power than it once did. 

In the 2023-24 academic year, the Pell Grant is expected to cover around 32% of average tuition, fees, and room and board at public four-year colleges, a huge drop from the 79% covered in the 1975-76 academic year, according to one recent analysis

For student aid administration, the Senate plan would set aside $150 million in part to help the Education Department support borrowers who are reentering repayment. A roughly three-year freeze on federal student loan payments lifts in October. 

Meanwhile, the Republican-controlled House is hoping for deep cuts to the Education Department. 

That chamber’s plan includes a proposal to eliminate Federal Work-Study, which funds part-time employment for students, and the Federal Supplemental Educational Opportunity Grant, which provides up to $4,000 to the lowest-income students.