Department of Education

STUDENT FINANCIAL ASSISTANCE

Fiscal Year 2017 Budget Request

CONTENTS

Page

Appropriations Language ........................................................................................................O-1

Analysis of Language Provisions and Changes.......................................................................O-4

Appropriation, Adjustments and Transfers ..............................................................................O-7

Summary of Changes .............................................................................................................O-8

Authorizing Legislation............................................................................................................O-9

Appropriations History...........................................................................................................O-10

Summary of Request ............................................................................................................O-11

Federal Pell grants ...........................................................................................................O-15

Federal supplemental educational opportunity grants.......................................................O-30

Federal work-study ...........................................................................................................O-35

Federal Perkins loans.......................................................................................................O-42

Iraq and Afghanistan service grants..................................................................................O-49
STUDENT FINANCIAL ASSISTANCE

Appropriations Language

For carrying out subparts 1[, 3, and 10] and 3 of part A, and part C of title IV of the HEA,

$24,198,210,000, which shall remain available through September 30, [2017] 2018:

1 Provided, 

That, of amounts provided under this heading, $6,553,408,000 shall be available for Pell Grants 

for award year 2018-2019.

2

The maximum Pell Grant for which a student shall be eligible during award year [2016-2017]

2017-20183 shall be $4,860. (Department of Education Appropriations Act, 2016).

TITLE III GENERAL PROVISIONS

SEC. 311. Section 487(a)(24) of the Higher Education Act of 1965 (20 U.S.C.

1094(a)(24)) is amended —

(1) by striking "ten percent" and inserting "fifteen percent";4

(2) by striking "In the" and inserting "(A) In the";

(3) by striking "funds provided under this title, as calculated in accordance with subsection 

(d)(1)" and inserting "Federal funds, as calculated in accordance with subparagraph (B) of this 

paragraph and subsection (d)(1)";5 and

(4) by adding at the end the following —

"(B) FEDERAL FUNDS.—In this paragraph, the term 'Federal funds' means any Federal 

financial assistance provided, under this Act or any other Federal law, through a grant, contract, 

subsidy, loan, guarantee, insurance, or other means to a proprietary institution, including 

Federal financial assistance that is disbursed or delivered to an institution or on behalf of a 

student or to a student to be used to attend the institution, except that such term shall not 

include any monthly housing stipend provided under chapter 33 of title 38, United States 

Code."6.

SEC. 312. Reappropriation of Mandatory Savings.—Section 401(b)(7)(A)(iv) of

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STUDENT FINANCIAL ASSISTANCE

the HEA (20 U.S.C. 1070a(b)(7)(A)(iv)) is amended to read as follows—

 ''(iv) to carry out this section—

 ''(I) $13,500,000,000 for fiscal year 2011;

 ''(II) $13,795,000,000 for fiscal year 2012;

 ''(III) $7,587,000,000 for fiscal year 2013;

 ''(IV) $588,000,000 for fiscal year 2014;

 ''(V) $0 for fiscal year 2015;

 ''(VI) $0 for fiscal year 2016;

 ''(VII) $1,574,000,000 for fiscal year 2017;

 ''(VIII) $1,397,000,000 for fiscal year 2018;

 ''(IX) $1,424,000,000 for fiscal year 2019;

 ''(X) $1,445,800,000 for fiscal year 2020; and

 ''(XI) $1,161,100,000 for fiscal year 2021 and each succeeding fiscal year.''

7

.

SEC. 314. Section 481 of the HEA (20 U.S.C. 1088) is amended by adding after

subsection (f) the following new subsection—

 "(g) DEFINITION OF ELIGIBLE VETERAN'S DEPENDENT.—For the purpose of any program 

under this title, the term 'eligible veteran's dependent' means a dependent or an independent 

student —

 (1) whose parent or guardian was a member of the Armed Forces of the United States and 

died as a result of performing military service in Iraq or Afghanistan after September 11, 2001; 

and

 (2) who, at the time of the parent or guardian's death, was —

 (A) less than 24 years of age; or

 (B) enrolled at an institution of higher education on a part-time or full-time basis."8.

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STUDENT FINANCIAL ASSISTANCE

SEC. 315. Subsection 401(b) of the HEA (20 U.S.C. 1070a) is amended by inserting

after paragraph (7), the following new paragraph:

 "(8) Eligible Veteran's Dependent. Notwithstanding paragraphs (2)(a)(iii) and

(3), the Secretary shall award the maximum Federal Pell grant for that year to each eligible 

veteran's dependent to assist in paying the eligible veteran's dependent's cost of attendance at 

an institution of higher education."9. (Department of Education Appropriations Act, 2016).

NOTE

Each language provision that is followed by a footnote reference is explained in the Analysis of Language 

Provisions and Changes document which follows the appropriation language.

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STUDENT FINANCIAL ASSISTANCE

Analysis of Language Provisions and Changes

Language Provision Explanation

1

For carrying out subparts 1[, 3, and 10] and 3

of part A, and part C of title IV of the HEA,

$24,198,210,000, which shall remain available 

through September 30, [2017] 2018:

This language sets the availability of funds 

provided under the account through the end of 

fiscal year 2018. It also removes Subpart 10, 

which refers to the Iraq and Afghanistan 

Service Grant program, which the 2017

President’s Budget proposes to move into the 

Pell Grant program.

2

Provided, That, of amounts provided under this 

heading, $6,553,408,000 shall be available for 

Pell Grants for award year 2018-2019.

This language recognizes that the funds

specified, appropriated in 2017, are available 

for award year 2018-2019.

3

The maximum Pell Grant for which a student 

shall be eligible during award year [2016-2017] 

2017-2018 shall be $4,860.

This language sets the maximum Pell Grant 

award for award year 2017-2018.

Title III GENERAL PROVISIONS

 4

SEC. 311. Section 487(a)(24) of the Higher 

Education Act of 1965 (20 U.S.C. 1094(a)(24)) 

is amended — (1) by striking "ten percent" and 

inserting "fifteen percent";...

This language changes the amount of revenue 

derived from non-Title IV sources from 

10 percent to 15 percent that a proprietary 

institution of higher education must calculate in 

order to participate in Title IV programs as part 

of the so-called 90/10 rule, effectively 

changing the proportion to 85/15.

5

(3) by striking "funds provided under this title, 

as calculated in accordance with subsection 

(d)(1)" and inserting "Federal funds, as 

calculated in accordance with subparagraph (B) 

of this paragraph and subsection (d)(1)"

This language changes the definition of Title IV 

funds that are not included in the 15 percent to 

a broader category of Federal funds.

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STUDENT FINANCIAL ASSISTANCE

Language Provision Explanation

6

(4) by adding at the end the following —

"(B) FEDERAL FUNDS.—In this paragraph, the 

term 'Federal funds' means any Federal 

financial assistance provided, under this Act or 

any other Federal law, through a grant, 

contract, subsidy, loan, guarantee, insurance, 

or other means to a proprietary institution, 

including Federal financial assistance that is 

disbursed or delivered to an institution or on 

behalf of a student or to a student to be used to 

attend the institution, except that such term 

shall not include any monthly housing stipend 

provided under chapter 33 of title 38, United 

States Code.".

This language defines the term “Federal 

Funds.” All Federal funds included in the HEA

or provided through any other Federal law 

would now be considered Federal funds in the 

85/15 calculation, with the exception of a 

monthly housing stipend provided to veterans 

for post-9/11 educational assistance programs.

 7

SEC. 312. Reappropriation of Mandatory 

Savings.—Section 401(b)(7)(A)(iv) of the HEA 

(20 U.S.C. 1070a(b)(7)(A)(iv)) is amended to 

read as follows—

‘'(iv) to carry out this section—

''(I) $13,500,000,000 for fiscal year 2011;

''(II) $13,795,000,000 for fiscal year 2012;

''(III) $7,587,000,000 for fiscal year 2013;

''(IV) $588,000,000 for fiscal year 2014;

''(V) $0 for fiscal year 2015;

''(VI) $0 for fiscal year 2016;

''(VII) $1,574,000,000 for fiscal year 2017;

''(VIII) $1,397,000,000 for fiscal year 2018;

''(IX) $1,424,000,000 for fiscal year 2019;

''(X) $1,445,800,000 for fiscal year 2020; and

''(XI) $1,161,100,000 for fiscal year 2021 and 

each succeeding fiscal year.''.

This language provides for the reappropriation 

of mandatory funding levels in the Pell Grant 

program beginning in fiscal year 2018 through 

2021 and succeeding years. These changes 

are required to reflect the 2017 President’s 

Budget proposal to use mandatory funding 

previously provided in the HEA for the Pell 

Grant program to fund policy proposals 

included in the fiscal year 2017 President’s 

Budget for which legislative language is not 

included.

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STUDENT FINANCIAL ASSISTANCE

Language Provision Explanation

 8

SEC. 314. Section 481 of the HEA (20 U.S.C. 

1088) is amended by adding after subsection (f) 

the following new subsection—

"(g) DEFINITION OF ELIGIBLE VETERAN'S 

DEPENDENT.—For the purpose of any 

program under this title, the term 'eligible 

veteran's dependent' means a dependent or an 

independent student—

(1) whose parent or guardian was a member of 

the Armed Forces of the United States and died 

as a result of performing military service in Iraq 

or Afghanistan after September 11, 2001; and 

(2) who, at the time of the parent or guardian's 

death, was —

(A) less than 24 years of age; or 

(B) enrolled at an institution of higher education 

on a part-time of full-time basis.”.

This language adds a new definition of an 

eligible veteran’s dependent to section 481 of 

the HEA resulting from the fiscal year 2017 

President’s Budget proposal to eliminate 

Subpart 10, which refers to the Iraq and 

Afghanistan Service Grant program and 

includes the definition of an eligible veteran’s 

dependent.

 9

SEC 315. Subsection 401(b) of the HEA (20

U.S.C. 1070a) is amended by inserting after 

paragraph (7), the following new paragraph: 

(8) Eligible Veteran's Dependent. 

Nothwithstanding paragraphs (2)(a)(iii) and (3), 

the Secretary shall award the maximum Federal 

Pell grant for that year to each eligible veteran's 

dependent to assist in paying the eligible 

veteran's dependent's cost of attendance at an 

institution of higher education.".

This language moves the current eligibility 

requirements for the Iraq and Afghanistan 

Service Grant program (IASG) to the Pell 

Grant program in section 401(b) as part of the 

2017 President’s Budget proposal to move

IASG and into the Pell Grant program.

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STUDENT FINANCIAL ASSISTANCE

Appropriation, Adjustments and Transfers

(dollars in thousands)

Appropriation/Adjustments/Transfers 2015 2016 2017

Discretionary:

Discretionar y Appropriation........................................................ $24,198,210 $24,198,210 $24,198,210

Mandatory:

Mandator y Appropriation ........................................................ 5,153,302 5,804,894 7,629,000

Total, discretionary and 

mandatory appropriation ............................... 29,351,512 30,003,104 31,827,210

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STUDENT FINANCIAL ASSISTANCE

Summary of Changes

(dollars in thousands

2016.................................................................................................. $30,003,104

2017................................................................................................. 31,827,210

Net change ................................................................ +1,824,106

Increases: 2016 base

Change 

from base

Program:

Increase in mandatory funding provided to support the Pell Grant 

program including the Iraq and Afghanistan Service Grant 

program. $5,804,441 +$1,824,559

Subtotal, increases +1,824,559

Decreases: 2016 base

Change 

from base

Program:

Decrease in mandatory funding to reflect the move of Iraq and 

Afghanistan Service Grants to Pell Grants. 453 -453

Subtotal, decreases -453

Net change +1,824,106

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STUDENT FINANCIAL ASSISTANCE

Authorizing Legislation

(dollars in thousands)

Activity 2016 

Authorized Footnote

2016 

Estimate

Footnote

2017 

Authorized Footnote

2017

Request

Footnote

Federal Pell grants (HEA-IV-A-1):

Career and T echnical: Federal Pell grants (discretionary) ....................................... Indefinite $22,475,352 Indefinite $22,475,352

Career and T echnical: Federal Pell grants (mandatory)........................................... Indefinite 5,804,441 Indefinite 7,629,000

Federal supplemental educational opportunity grants (HEAIV-A-3)................................................................................ 01 733,130 To be determined1 733,100

Federal Work-Study (HEA-IV-C) .............................................. 01 989,728 To be determined1 989,728

Iraq and Afghanistan Service Grants (HEA-IV-A-10)2.............. Indefinite 453 Indefinite 0

Federal Perkins loans (HEA-IV-E)............................................ Indefinite 0 Indefinite 0

Unfunded authorizations

Academic achievement incentive scholarships (HEA-IV-A, 

Chapter 3).......................................................................... Indefinite 0 Indefinite 0

Total discretionary appropriation .............................................. 24,198,210 24,198,210

Portion of the discretionary request subject to 

reauthorization.............................................................. 1,722,858 1,722,858

Total mandatory appropriation ................................................. 5,804,894 7,629,000

Total appropriation ................................................................... 30,003,104 31,827,210

1

The GEPA extension expired September 30, 2015; the program was authorized in 2016 through appropriations language. Reauthorizing legislation is sought 

for fiscal year 2017. 2

Legislation is sought in fiscal year 2017 to make the Iraq and Afghanistan Service Grants program a non-sequesterable program by moving it into the Pell 

Grant program.

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STUDENT FINANCIAL ASSISTANCE

Appropriations History

(dollars in thousands)

Year

 Budget

 Estimate

 to Congress

House 

Allowance

Senate 

Allowance Appropriation

2008 $16,419,492 $17,464,883 $18,409,883 $16,111,136

2008 Mandatory 0 0 0 2,011,0001

2009 19,921,551 19,201,1362 18,761,8092 19,156,973

2009 Mandatory 0 2,090,0001 2,090,0001 2,090,0001

Recovery Act 

Supplemental 

(P.L. 111-5) 0 17,600,000 13,930,000 17,314,000

2010 1,801,8093 19,634,905 19,296,8094 19,296,809

2011 1,737,9573 18,475,4925 24,899,9574 24,670,517

2012 30,338,016 22,367,5216 24,670,5176 24,535,281

2013 24,685,281 24,535,2817 24,535,2817 24,400,122

2014 24,685,281 N/A8 24,536,2104 24,486,210

2015 24,486,210 N/A8 24,233,2109 24,198,210

2016 24,198,210 23,828,21010 24,129,35210 24,198,210

2017 24,198,210

1

Mandatory funding is provided for Pell Grants pursuant to the College Cost Reduction and Access Act of 2007 

(P.L. 109-084). 2

The levels for the House and Senate allowance reflect action on the regular annual 2009 appropriations bill, 

which proceeded in the 110th Congress only through the House Subcommittee and the Senate Committee. 3

Reflects Budget proposal to shift funding for Pell Grants and Perkins Loans to their own, separate accounts. 4

The level for the Senate allowance reflects Committee action only. 5

The level for the House allowance reflects the House-passed full-year continuing resolution. 6

The level for the House allowance reflects an introduced bill; the level for the Senate allowance reflects Senate 

Committee action only. 7

The level for the House and Senate allowances reflect action on the regular annual 2013 appropriations bill, 

which proceeded in the 112th Congress only through the House Subcommittee and the Senate Committee. 8

The House allowance is shown as N/A because there was no Subcommittee action. 9

The level for the Senate allowance reflects Senate Subcommittee action only.

10The levels for House and Senate allowances reflect action on the regular annual 2016 appropriations bill, which 

proceeded in the 114th Congress only through the House Committee and Senate Committee.

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STUDENT FINANCIAL ASSISTANCE

Summ

DEPARTMENT OF EDUCATION FISCAL YEAR 2017 PRESIDENT'S BUDGET

(in thousands of dollars)

Click here for accessible version 

Amount Percent

Student Financial Assistance

1. Federal Pell grants (HEA IV-A-1):

(a) Discretionary Pell grants D 22,475,352 22,475,352 22,475,352 0 0.00%

(b) Mandatory Pell grants 1 M 5,152,933 5,804,441 6,306,000 501,559 8.64%

(c) Mandatory Funding for Discretionary Program Costs M 0 0 1,323,000 1,323,000 ---

Subtotal, Federal Pell grants 27,628,285 28,279,793 30,104,352 1,824,559 6.45%

Discretionary D 22,475,352 22,475,352 22,475,352 0 0.00%

Mandatory M 5,152,933 5,804,441 7,629,000 1,824,559 31.43%

Federal Pell Grants Program Information (memorandum entry):

Discretionary appropriation D 22,475,352 22,475,352 22,475,352 0 0.00%

Prior year surplus/(shortfall) D 9,010,352 7,952,704 7,463,056 (489,648) -6.16%

Mandatory appropriation M 5,152,933 5,804,441 6,306,000 501,559 8.64%

Prior year surplus/(shortfall) M (567,374) (448,441) 0 448,441 -100.00%

Mandatory funding for discretionary program costs M 0 0 1,323,000 1,323,000 ---

Total resources 36,071,263 35,784,056 37,567,408 1,783,352 4.98%

Discretionary program costs D 23,533,000 22,965,000 24,708,000 1,743,000 7.59%

Mandatory program costs M 5,034,000 5,356,000 6,306,000 950,000 17.74%

Total, program costs 28,567,000 28,321,000 31,014,000 2,693,000 9.51%

Discretionary program current year surplus/(shortfall) D 7,952,704 7,463,056 6,553,408 (909,648) -12.19%

Mandatory program current year surplus/(shortfall) M (448,441) 0 0 0 ---

Total, surplus/(shortfall) 7,504,263 7,463,056 6,553,408 (909,648) -12.19%

Maximum award (in whole dollars)

Base award $4,860 $4,860 $4,860 0 0.00%

Mandatory add-on $915 $955 $1,075 120 12.57%

Total maximum award $5,775 $5,815 $5,935 120 2.06%

Recipients (in thousands) 7,670 7,679 7,719 40 0.52%

NOTES: D = discretionary program; M = mandatory program; FY = fiscal year 

For most mandatory programs, the levels shown in the 2015 Appropriation column reflect the 7.3 percent sequester that went into effect October 1, 2014, and the levels shown in the 

2016 Appropriation column reflect the 6.8 percent reduction that went into effect on October 1, 2015, pursuant to the Budget Control Act of 2011 (P.L. 112-25). 

Detail may not add to totals due to rounding. 

1 The 2017 President's Budget column reflects the budget proposal to end the current Iraq and Afghanistan Service Grant program and consolidate it into the Pell Grant program. 

2017 President's Budget

2016 Compared to 2016 Appropriation

 Account, Program and Activity Appropriation

Category 

Code

2015 

Appropriation

2017 President's 

Budget

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STUDENT FINANCIAL ASSISTANCE

t

DEPARTMENT OF EDUCATION FISCAL YEAR 2017 PRESIDENT'S BUDGET

(in thousands of dollars)

Amount Percent

Student Financial Assistance (continued)

2. Campus-based programs:

(a) Federal supplemental educational opportunity grants (HEA IV-A-3) D 733,130 733,130 733,130 0 0.00%

(b) Federal work-study (HEA IV-C) D 989,728 989,728 989,728 0 0.00%

Subtotal, Campus-based programs 1,722,858 1,722,858 1,722,858 0 0.00%

3. Iraq and Afghanistan service grants (P.L. 111-39) 1 M 369 453 0 (453) -100.00%

Total 2 29,351,512 30,003,104 31,827,210 1,824,106 6.08%

Discretionary D 24,198,210 24,198,210 24,198,210 0 0.00%

Mandatory M 5,153,302 5,804,894 7,629,000 1,824,106 31.42%

Federal Perkins Loan Program 

1. New loan subsidies (proposed legislation) M 0 0 0 0 ---

2. New net loan subsidies (non-add) M 0 0 (640,312) (640,312) ---

Total, Federal Perkins loan program amount 0 0 0 0 ---

NOTES: D = discretionary program; M = mandatory program; FY = fiscal year 

For most mandatory programs, the levels shown in the 2015 Appropriation column reflect the 7.3 percent sequester that went into effect October 1, 2014, and the levels shown in the 

2016 Appropriation column reflect the 6.8 percent reduction that went into effect on October 1, 2015, pursuant to the Budget Control Act of 2011 (P.L. 112-25). 

Detail may not add to totals due to rounding. 

1 The 2016 Appropriation and 2017 President's Budget columns reflect the budget proposal to end the current Iraq and Afghanistan Service Grant program and consolidate it into the Pell Grant program. 

2 The 2015 Appropriation does not reflect a $8,500 thousand transfer, using the Department’s transfer authority, to Program Administration.

2017 President's Budget

Compared to 2016 Appropriation

 Account, Program and Activity

Category 

Code

2015 

Appropriation

2016

Appropriation

2017 President's 

Budget

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STUDENT FINANCIAL ASSISTANCE

The United States has long been a global leader in postsecondary education, but recently this 

advantage has slipped. According to the Organisation for Economic Co-operation and 

Development (OECD) in its annual “Education at a Glance,” the U.S. ranks 6th among OECD 

and partner countries in terms of the proportion of 25–64 year olds with postsecondary 

attainment, but ranks 13th in the same category among those aged 25–34. There is a significant 

opportunity gap as well. While half of Americans from high-income families have a bachelor’s 

degree by age 25, just one in 10 people from low-income families attain that level of education. 

Moreover, regardless of income status, high-school graduates who enroll in college too often fail 

to finish: barely half will complete their degree in a reasonable time at 4-year institutions; and at 

2-year schools, it’s only about a third.

Since 2009, the Obama Administration has made historic investments in student financial aid 

that have helped ensure college stays within the reach of American families. It has increased 

the maximum Pell Grant by more than $1,000, and created and extended the American 

Opportunity Tax Credit, worth $10,000 over 4 years of college. It has cut student loan interest 

rates, saving students up to $1,000 this year, and allowed more borrowers to cap their loan 

payments at 10 percent of their income through the President's Pay As You Earn and related 

income-driven repayment plans. In total, the Obama Administration has increased total aid 

available to students by over $50 billion from 2008 to 2016, and selected tax benefits by over 

$12 billion, which has helped our Nation ensure more students are graduating from college than 

ever before.

The 2017 Budget continues on the path of helping to ensure that students can attain a 

postsecondary credential without taking on more debt than they and their families can afford. It 

also supports an ongoing shift toward focusing on student outcomes in higher education, and, in 

particular, completion, so that both students and the Nation can thrive in the global economy. 

Accordingly, the fiscal year 2017 Budget includes proposals to address college access, 

affordability, and completion.

The total fiscal year 2017 Budget proposed for the Student Financial Assistance (SFA) account 

is $31.8 billion, $1.8 billion higher than the fiscal year 2016 level. The Budget request includes 

a discretionary request of $24.2 billion: $22.5 billion for Pell grants, with the remainder of the 

request for Supplemental Educational Opportunity Grants and Federal Work-Study. Over

$7.6 billion in mandatory funds is provided in the 2017 Budget for the Pell Grant program.

The 2017 Budget provides access to additional campus-based funds through an expanded 

Federal Perkins Loan program. This proposed expansion and reform of the current program

means an estimated 714,000 additional students will be able to receive Perkins Loans, as the 

program will serve a greater number of institutions (up to 2,900 more than the existing program). 

The reformed Perkins program will also provide additional funds at eight and a half times the 

current volume.

Funds requested for all programs in the Student Financial Assistance account would provide 

$38 billion in aid to help students pursue a postsecondary education. (Total aid available is 

based on new budget authority and any required matching funds, less allowable administrative 

costs.) Overall, these programs would provide more than 11 million student aid awards.

The fiscal year 2017 budget request for programs in the Student Financial Assistance account is 

best understood in the context of the Administration’s proposals for the student aid programs as 

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STUDENT FINANCIAL ASSISTANCE

a whole. Accordingly, program-specific funding information and policy proposals, as well as 

program performance information that applies to all student assistance programs, are discussed 

in the Student Aid Overview.

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STUDENT FINANCIAL ASSISTANCE

Federal Pell grants

(Higher Education Act of 1965, Title IV, Part A, Subpart 1)

(dollars in thousands)

FY 2017 Authorization: Indefinite

Budget authority1

Period of fund availability: 

2016 2017 Change

Program funds:

Discretionary appropriation $22,475,352 $22,475,352 0

Mandatory appropriation 5,804,441 6,306,000 +501,559

Mandatory appropriation for 

discretionary program costs2 0 1,323,000 +1,323,000

Subtotal, current year funding 28,279,793 30,104,352 +1,824,559

Pell Grant program costs 28,321,000 31,014,000 +2,693,000

1

Table reflects discretionary budget appropriations and mandatory budget authority in support of program costs 

for each fiscal year. 2

The Higher Education Act (HEA) provides $1,574,000 thousand in mandatory funding to be used for 

discretionary program costs in FY 2017. The budget proposes to use $251,000 thousand of this funding to support 

increases to the mandatory add-on award associated with new Pell policies included in the budget.

PROGRAM DESCRIPTION

The Federal Pell Grant program helps ensure access to postsecondary education for low- and 

moderate-income undergraduate students by providing grants that help meet postsecondary 

education costs. The program also promotes lifelong learning by providing resources so that

low- and moderate-income adults now in the workplace can return to school to upgrade their 

skills.

The Department provides funds to participating institutions to provide aid to all students at the 

institution who are eligible for a Pell Grant—a student’s eligibility is not dependent on the 

availability of funds awarded to the institution as in the Campus-Based Programs:

Supplemental Education Opportunity Grants, Work-Study, and Perkins Loans.

A Pell Grant is considered to be the foundation of a student’s financial aid package, to which 

other forms of aid are added. The amount of a student’s Pell Grant is dependent on the 

student’s “expected family contribution” (EFC), cost of education, whether the student attends 

school full time or part time, and whether the students’ program is a full academic year in length

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STUDENT FINANCIAL ASSISTANCE

Federal Pell Grants

or less. Pell Grant disbursements are made to a student at least once every term during the 

award year or at the beginning and mid-point for programs without terms.

Budget authority in the Pell Grant program is available for 2 fiscal years; for example, funds 

become available for obligation on October 1 of the fiscal year in which they are appropriated 

and remain available through September 30 of the following fiscal year. Funds proposed for

fiscal year 2017 would be used for grants in the 2017-2018 award year, which runs from July 1, 

2017, through June 30, 2018. If Pell Grant costs for a given academic year exceed the 

corresponding appropriation, the Department uses the next fiscal year’s appropriation to cover 

the full cost.

Recent and projected funding: The Pell Grant program is the single largest source of grant aid 

for postsecondary education—the centerpiece of President Obama’s strategy to ensure that

students can afford higher education and successfully attain a postsecondary credential. 

Thanks to the landmark investments in Pell Grants since the beginning of the Administration, in 

2016, more than 7.6 million students will receive Pell Grants worth up to $5,815. The program 

operates as an entitlement to eligible students once the maximum grant, award rules, and 

payment schedule are established. The Higher Education Act does not provide for the denial of 

an award to any student who meets the qualifying conditions, nor does it allow the Secretary to 

reduce any student’s award level.

Mandatory funding: The College Cost Reduction and Access Act (CCRAA) authorized 

mandatory funding to support increases to the Pell maximum award set in each fiscal year’s 

appropriations act. The Health Care and Education Reconciliation Act (HCERA) amended that 

provision and increased the maximum award by $690 for award years 2010-2011 through 2012-

2013, and by the Consumer Price Index (CPI) from 2013 to 2017. The maximum Pell Grant is 

expected to increase from the 2015-2016 award year level of $5,775 to $5,815 for the 2016-

2017 award year, as a result of the CPI provision.

Pell Grant program scoring rule: The congressional budget resolution for fiscal year 2006 

included a rule under which appropriations bills for the Pell Grant program are scored by the 

Congressional Budget Office for the estimated budget authority needed to fund the program for 

that year, or the requested budget authority, whichever is greater. If the appropriation exceeds 

the program cost as estimated at the beginning of the subsequent fiscal year, any surplus is 

available to reduce the appropriation needed to support that subsequent year’s program costs. 

Conversely, if the appropriation is lower than the updated estimated program cost, the 

difference is automatically scored against the subsequent year’s appropriation.

Given the nature of the program, it is reasonable to consider Pell Grants an individual 

entitlement for purposes of budget analysis and enforcement. Congress has chosen to continue 

treating the portion funded in annual appropriations acts as discretionary, continuing the scoring 

of budget authority for Pell Grants against the appropriations allocations established annually 

under section 302 of the Congressional Budget Act. Like the 2016 Budget, this Budget presents 

the portion of Pell Grants provided in the annual appropriations act as discretionary funding.

O-16
STUDENT FINANCIAL ASSISTANCE

Federal Pell Grants

Need analysis formula: The need analysis formula for the Title IV need-based student aid

programs, stipulated in the Higher Education Act, determines financial eligibility for Pell Grants 

and is applied uniformly to all applicants. This formula determines a student’s EFC. The 

fundamental elements in the formula are the student’s (and in the case of dependent students,

their parents’) income and assets (excluding the value of the family’s home or farm), the family’s

household size, and the number of family members (excluding the student’s parents) attending 

postsecondary institutions. The EFC is the sum of (1) a percentage of net income (remaining 

income after subtracting allowances for taxes and basic living expenses), and (2) a percentage 

of net assets (assets remaining after subtracting an asset protection allowance). Different 

assessment rates and allowances are used for dependent students, independent students, and 

independent students with dependents. For award year 2016-2017, the income threshold at 

which a dependent student receives an automatic zero EFC determination is $25,000.

Institutional participation: Approximately 5,000 postsecondary institutions currently participate in 

the Pell Grant program. Institutions that lose their eligibility to participate in the loan programs 

due to high default rates are also precluded from participation in the Pell Grant program. In 

addition, institutions that are subject to gainful employment regulations and that fail the 

regulations’ measures will lose eligibility to participate if they do not improve.

Student participation: Students may use their grants at any participating postsecondary

institution. Pell Grants are disbursed to the student through the institution. The Pell Grant 

program is the largest source of grant aid to students under the Higher Education Act, with 

approximately 41 percent of all undergraduates receiving a Pell Grant.

Recipients must be undergraduates and cannot have received a bachelor’s degree previously 

(with the exception of certain teacher certificate programs), and must be enrolled with the 

purpose of obtaining a degree or certificate at an eligible institution. 

Students must also have a high school diploma (or its equivalent), or be homeschooled. 

Students who do not meet this criterion and who first enrolled in an eligible program of study on 

or after July 1, 2014, and also enrolled in an eligible career pathway program as defined in 

section 484(d) of the HEA, must meet one of the following alternatives: (1) pass an 

independently administered Department-approved ability-to-benefit test; (2) complete at least 

6 credit hours or 225 clock hours that are applicable toward a degree or certificate offered by 

the institution; or (3) complete a State process approved by the Secretary of Education.

Students who did not have a high school diploma and were enrolled in an eligible program prior 

to July 1, 2012, may continue to receive a Pell Grant by meeting the requirements of a 

grandfathering test designed by the Department and documented by the institution.

Less than full-time students are eligible for pro rata awards based on their enrollment status. As 

of July 1, 2012, students are eligible for Pell Grants for a maximum of 12 semesters (or its 

equivalent) of full-time enrollment.

O-17
STUDENT FINANCIAL ASSISTANCE

Federal Pell Grants

A student in default on a loan made under any Title IV HEA loan program, or who owes an 

overpayment on any other previously received Federal student aid, may not receive additional 

funds under the program unless he or she repays the debt in full, or makes satisfactory 

repayment arrangements with the holder of the debt.

Annual award amount: The annual award amount may vary from the statutory minimum 

payment up to the maximum authorized by statute for the academic year. The Higher 

Education Opportunity Act of 2008 (HEOA) enacted a minimum payment of 10 percent of the 

appropriated maximum award. For example, in award year (AY) 2015-2016, the minimum is 

$577. Students who do not qualify for 10 percent of the maximum grant do not receive a Pell 

award. Appropriations acts set annual maximum award levels. The fiscal year 2016

appropriation act set the maximum award supported by discretionary funds for the 2016-2017

award year at $4,860. With the CPI provision established by the HCERA, the 2015 maximum 

award rose to $5,775. The total maximum Pell Grant award will be $5,815 for the 2016-2017

award year as a result of the CPI provision. The total 2017-2018 maximum award is also 

expected to increase with inflation.

The aggregate Pell Grant award is the lesser of:

• The maximum award (as set in annual appropriations acts) plus the additional amount 

provided by mandatory funds, minus the EFC, or

• The student’s cost of attendance minus the EFC.

Cost of attendance: For purposes of determining the Pell Grant award, the postsecondary 

institution establishes the cost of attendance, using the following cost items:

• Tuition and fees;

• An allowance for books, supplies, transportation, dependent care, and miscellaneous 

expenses, including a reasonable allowance for the documented rental or purchase of a 

personal computer;

• Living allowances of:

o The actual amount charged by the institution for room and board for students living at 

school,

o An amount determined by the institution for students without dependents living at home 

with parents, and

o For all other students, an amount based on the expenses reasonably incurred for room 

and board.

The cost of attendance for less-than-half-time students includes: tuition and fees; an allowance 

for books, supplies and transportation; and dependent care.

O-18
STUDENT FINANCIAL ASSISTANCE

Federal Pell Grants

Financial aid administrator discretion: The Higher Education Act stipulates financial aid 

administrators may, on the basis of adequate documentation and on a case-by-case basis, 

adjust a student’s Pell Grant award by changing the cost of attendance or the value of data 

elements used to calculate the EFC to reflect “special circumstances,” such as the following:

• Tuition expenses at an elementary or secondary school;

• Medical or dental expenses not covered by insurance;

• Unusually high child care costs;

• Recent unemployment of an independent student or a family member;

• Changes in a student’s housing status resulting in homelessness;

• The number of parents enrolled at least half-time in a degree or certificate or other program 

leading to a recognized educational credential at an institution participating in any of the 

Title IV programs; or

• Other changes in a family’s income, assets, or a student’s status.

Institutional payments: The HEA provides for payment to institutions of $5 per Pell Grant 

recipient to reimburse institutions for a share of the cost of administering the Pell Grant 

program. Funds for these payments are paid from the Pell Grant appropriation. In 2016-2017, 

these payments will total $38.4 million.

Because of the structure of the Pell Grant program, annual funding levels might not equal 

annual expenditures. Discretionary and mandatory funding levels for the past 5 fiscal years 

were:

Fiscal Year (dollars in thousands)

2012.............................................................. ........$41,569,0001

2013.............................................................. ..........35,219,3522

2014.............................................................. ..........28,881,3523

2015.............................................................. ..........27,628,2854

2016.............................................................. ..........28,279,7935

1

Includes $4,950 million in mandatory funds to increase maximum award by $690 and $13,795 million in 

additional mandatory funds provided in legislation to reduce discretionary need. 2

Includes $4,854 million in mandatory funds to increase maximum award by $785 and $7,587 million in additional 

mandatory funds provided in legislation to reduce discretionary need. 3

Includes $5,515 million in mandatory funds to increase maximum award by $870 and $588 million in additional 

mandatory funds provided in legislation to reduce discretionary need. 4

Includes $5,153 million in mandatory funds to increase maximum award by $915. 5

Includes $5,804 million in mandatory funds to increase maximum award by $955.

O-19
STUDENT FINANCIAL ASSISTANCE

Federal Pell Grants

FY 2017 BUDGET REQUEST

Since President Obama took office, the Administration has repeatedly sought higher Pell Grant 

funding, and its efforts have increased the Pell maximum award by more than $1,000, and 

provided grants to an additional 1.5 million students. In its continued support of the program, 

the Administration requests $22.5 billion in discretionary funding, the same level as 2016. This 

discretionary request, plus $7.6 billion in mandatory funding, establishes the total 2017 Pell 

funding level at $30.1 billion. The mandatory request supports an increase in the add-on award 

of $1,075 to the base maximum award of $4,860, increasing the total maximum award that will 

increase with inflation.

The budget provides mandatory funding to continue indexing the maximum Pell Grant award to 

inflation indefinitely. The automatic inflationary increases, secured by the Administration in the 

SAFRA Act, as part of the Health Care and Education Reconciliation Act of 2010 (HCERA), are 

scheduled to expire after the 2017-2018 award year. Additionally, the 2017 Budget re-proposes 

to make several reforms to strengthen and protect the Pell Grant program while promoting 

student success and degree attainment:

• First, it would strengthen satisfactory academic progress requirements in order to encourage 

students to complete their studies on time.

• Second, it would prevent additional Pell disbursements to recipients who repeatedly enroll 

and obtain aid but do not earn any academic credits to help protect student aid resources.

• Third, the Budget would move the Iraq and Afghanistan Service Grant program into the Pell 

Grant program to ensure that our veterans’ children receive the full, non-sequestered Pell 

award for which they are eligible.

• And finally, the Administration supports the simplification of the Free Application for Federal 

Student Aid (FAFSA). The Budget proposes eliminating questions related to assets, nonIRS untaxed income, non-IRS income exclusions, and other income adjustments, which may 

discourage many eligible students from applying for aid, and making it more understandable 

and easier to complete.

The Budget also proposes new student supports and incentives for eligible Pell Grant recipients 

to encourage on-time or accelerated completion:

• Pell for Accelerated Completion would reinstate year-round Pell Grant eligibility for 

recipients who have completed 24 credit hours in an academic year, exhausted their 

eligibility for the award year, and wish to enroll in additional coursework. Many full-time 

students exhaust their annual Pell eligibility after just two semesters and, as a result, are unable 

to pay for summer courses and must wait until the beginning of the next academic year to 

continue their studies. This proposal will provide nearly 700,000 students in award year 2017-18

who are making real progress toward on-time graduation with an additional $1,915, on average,

O-20
STUDENT FINANCIAL ASSISTANCE

Federal Pell Grants

to help pay for college and complete their degrees faster. Under the proposal, recipients would 

qualify for up to 150 percent of their regular Pell Grant award.

• On-Track Pell Bonus would provide a $300 Pell bonus award to recipients who take 15 credit 

hours per semester in an academic year, effectively increasing their Pell maximum award to 

$6,235 for award year 2017-18. Currently, a student who is enrolled in 12 credit hours (or the 

equivalent) during a term is considered full-time for Federal student aid purposes and is 

eligible for a maximum Pell grant. Assuming two standard terms during a Pell Grant award 

year, students pursuing a 2-year/4-year degree and enrolled at 12 credit hours per term 

cannot graduate within 2/4 years and those who take more credits cannot obtain additional 

Pell aid. This additional aid will reward an estimated 2.3 million Pell Grant recipients next 

year as they work to finish their degrees faster.

• Second Chance Pell would reinstate access to Pell Grant aid for eligible incarcerated 

students in Federal and State penal institutions who are eligible for release, with the goal of 

helping them get jobs, support their families, and create safer communities. Increasing 

access to high-quality educational opportunities will help these individuals successfully 

transition out of prison and back into the classroom or workforce. Research shows that a 

high-quality correctional educational opportunity measurably reduces re-incarceration rates, 

and this proposal is part of the Administration’s commitment to create a fairer, more effective 

criminal justice system, reduce recidivism, and combat the impact of mass incarceration on 

communities.

In addition, the 2017 Request proposes to increase the share of a proprietary institution’s 

revenue that comes from sources other than Federal student aid programs from 90 percent to 

85 percent and to include all other Federal educational programs outside of the Department of 

Education, such as the Department of Defense Tuition Assistance and GI Bill Benefits, in the 

85/15 calculation. Additional detail on this proposal is discussed in the Student Aid Overview. 

The fiscal year 2017 Budget request for this program is best understood in the context of the 

Administration’s proposals for the student aid programs as a whole. Accordingly, program 

specific funding information and policy proposals also are discussed in the Student Aid 

Overview.

PELL GRANT PROGRAM HISTORICAL DATA

Applicant and Recipient Growth:

The graphs on the following pages show the latest applicant, recipient, and aid available trends 

for the Pell Grant program. Applicants are estimated at 16.3 million for award year 2015-2016; 

recipients at 7.7 million.

Many factors affect applicant growth, including demographic trends and changes in economic 

conditions, such as labor market demands. Factors affecting recipient growth include family 

incomes, need analysis, college costs, the level of the maximum Pell Grant award, and changes 

in applicant levels.

O-21
STUDENT FINANCIAL ASSISTANCE

Federal Pell Grants

The following tables show program information consistent with actual, predicted, or requested 

funding levels.

Federal Pell Grants Applicant Trends1

Award Year Valid Applicants2 Applicant Growth: 

Number

Applicant Growth: 

Percent Change

2002-03 10,354,525 849,426 8.96%

2003-04 11,093,506 738,981 7.14%

2004-05 11,539,497 445,991 4.02%

2005-06 11,611,388 71,891 0.62%

2006-07 11,811,911 200,523 1.73%

2007-08 12,299,232 487,321 4.13%

2008-09 13,883,288 1,584,056 12.88%

2009-10 16,482,495 2,599,207 18.72%

2010-11 17,625,778 1,143,283 6.94%

2011-12 18,458,701 832,923 4.73%

2012-13 18,294,947 -163,754 -0.89%

2013-14 17,915,446 -379,501 -2.07%

2014-15 17,312,207 -603,239 -3.37%

2015-16 16,323,233 -988,974 -5.71%

2016-17 15,815,173 -508,060 -3.11%

2017-18 16,158,103 342,930 2.17%

1

Applicant data through AY 2014-15 are considered final and are taken from internal operational reports. 

Applicant data for award years 2015-16 through 2017-18 are estimates and are subject to change. 2

A valid applicant is an undergraduate student who submits an application with sufficient data to calculate an 

EFC and determine Pell Grant eligibility.

O-22
STUDENT FINANCIAL ASSISTANCE

Federal Pell Grants

NOTE: Applicants reflect those applying for all Federal student financial assistance, including those receiving 

only non-need based student loans.

Number of Recipients:

Under current estimates, the 2017 level would support Pell Grant awards to 7.7 million 

recipients.

Aid Available:

Under current estimates, the Department’s fiscal year 2017 proposal would provide $31 billion in

Pell Grants to students.

O-23
STUDENT FINANCIAL ASSISTANCE

Federal Pell Grants

Maximum award:

1

The Department proposes to maintain the base maximum award at $4,860 for award year 2017-

2018 through discretionary and mandatory funding. The cost of providing the mandatory add-on 

that increases the maximum award to $5,815 in the 2016-2017 award year is funded by 

permanent mandatory indefinite funding as provided through HCERA.

Pell Maximum Award, Aid Available, and Recipients

Award 

Year

Maximum 

Award

Aid Available 

(dollars in millions) Recipients

2012-13 $5,550 $32,045 8,954,267

2013-14 5,645 31,471 8,660,394

2014-15 5,730 30,620 8,313,000

2015-16 5,775 28.529 7,670,000

2016-17 5,815 28,283 7,679,000

2017-18 5,935 30,975 7,719,000

1

Under the FY 2017 Budget proposal, Pell Grant recipients who enroll in 15 credit hours per semester (or the 

equivalent) of coursework during an award year may qualify for an additional $300 bonus award, which is not 

considered part of the maximum award determined in annual appropriations language and the HEA.

O-24

 
STUDENT FINANCIAL ASSISTANCE

Federal Pell Grants

Pell Maximum Award, Budget Authority, and Program Costs

FY Maximum Award

Budget Authority

(dollars in thousands)

Program Costs

(dollars in thousands)

2008 $4,731 $16,245,0001 $18,309,000

2009 5,350 35,661,0002 29,992,000

2010 5,550 22,794,8163 35,700,000

2011 5,550 42,015,9964 33,595,000

2012 5,550 41,569,0005 32,090,000

2013 5,645 35,219,3526 31,514,000

2014 5,730 28,881,3527 30,662,000

2015 5,775 27,628,2858 28,567,0009

2016 5,815 28,279,79310 28,321,0009

2017 5,935 30,104,35211 31,014,0009

1

Budget Authority for FY 2008 includes $14,215 million in discretionary funds and $2,030 million in mandatory 

funds provided by the College Cost Reduction and Access Act (CCRAA) for use as an add-on to the maximum 

award. 2

Budget Authority for FY 2009 includes $15,640 million in American Recovery and Reinvestment Act of 2009 

funds, and $2,733 million in mandatory funds for use as an add-on to the maximum award. 3

Budget Authority for FY 2010 includes $17,495 million in discretionary funds and $5,300 in mandatory funds to 

increase the maximum award. 4

Budget Authority for FY 2011 includes $23,162 million in discretionary funds, $13,500 million in mandatory 

funds for discretionary program costs, and $5,560 million in mandatory funds to increase the maximum award. 5

Budget Authority for FY 2012 includes $22,824 million in discretionary funds, $4,950 million in mandatory 

funding to increase the maximum award, and $13,795 million in mandatory funds provided in the Budget Control Act 

of 2011 to reduce discretionary need. 6

Budget Authority for FY 2013 includes $22,778 million in discretionary funds, $4,854 million in mandatory 

funding to increase the maximum award, and $7,587 million in mandatory funds for discretionary purposes. 7

Budget Authority requested for FY 2014 includes $22,778 million in discretionary funds, $5,515 million in 

mandatory funds to increase the maximum award, and $588 million in mandatory funds for discretionary purposes. 8

Budget Authority requested for FY 2015 includes $22,475 million in discretionary funds and 

$5,153 million in mandatory funds to increase the maximum award. 9

Estimate.

10Budget authority requested for FY 2016 includes $22,475 million in discretionary funding and $5,804 million in 

mandatory funding to increase the maximum award. 11Budget authority requested for FY 2017 includes $22,475 million in discretionary funding and $6,306 million in 

mandatory funding to increase the maximum award.

O-25
STUDENT FINANCIAL ASSISTANCE

Federal Pell Grants

Distribution of Pell Grants by Student Status and Income Level:

The tables below illustrate the distribution of Pell Grant funds to dependent and independent 

students at various income levels. In 2014-2015, approximately 72 percent of all Pell Grant 

recipients (including independent students) had incomes less than or equal to $30,000.

Distribution of Pell Grants to Dependent Undergraduates in 2014-15

Income Level Recipients Available Aid Average 

Award

 0 - $6,000 552,880 $2,388,918,501 $4,321

$6,001 - $9,000 128,156 565,071,498 4,409

$9,001 - $20,000 827,575 3,681,952,431 4,449

$20,001 - $30,000 707,888 3,142,114,200 4,439

$30,001 + 1,523,605 5,120,662,411 3,361

Total Dependent 3,740,104 14,898,719,041 3,984

O-26
STUDENT FINANCIAL ASSISTANCE

Federal Pell Grants

Independent students make up more than half of the students receiving assistance under the 

Pell Grant program. These recipients tend to be in the lowest income groups, as shown below.

Distribution of Pell Grants to Independent Undergraduates in 2014-15

Income Level Recipients Available Aid Average 

Award

0 - $ 1,000 823,175 $2,999,120,931 $3,643

$1,001 - $ 3,000 232,818 875,715,783 3,761

$3,001 - $ 6,000 342,522 1,281,400,787 3,741

$6,001 - $ 9,000 371,840 1,380,204,232 3,712

$9,001 - $15,000 802,427 2,847,370,938 3,548

$15,001 - $20,000 554,858 1,711,495,597 3,085

$20,001 - $30,000 638,840 2,047,565,835 3,205

 $30,001 + 806,416 2,578,841,856 3,198

Total Independent 4,572,896 15,721,715,959 3,438

All Undergraduates 8,313,000 30,620,435,000 3,683

Distribution of Pell Grants by Type of Institution:

The table below shows the distribution of Pell Grants to students attending different types of 

institutions. In 2014-2015, approximately 34 percent of the total aid available for Pell Grants 

went to students attending Public 4-Year schools, and approximately 33 percent went to 

students attending Public 2-Year schools.

Over the lifetime of the Pell Grant program, the share of Pell Grant aid to proprietary institutions 

has changed significantly. For example, in the 1998-1999 award year, approximately 

13 percent of total Pell Grant aid went to students at proprietary institutions; in the 2013-2014

and 2014-15 award years those figures were 20 and 18 percent, respectively.

Distribution of Pell Grants by Type of Institution in 2014-15

Institution 

Type Recipients Available Aid

Average 

Award

Percent of 

Pell Aid

Public 4-Year 2,720,987 $10,313,215,494 $3,790 33.7%

Public 2-Year 2,877,802 10,052,726,095 3,493 32.8

Private 1,191,169 4,776,654,838 4,010 15.6

Proprietary 1,523,042 5,477,838,573 3,597 17.9

Total 8,313,000 30,620,435,000 3,683 100.0

O-27
STUDENT FINANCIAL ASSISTANCE

Federal Pell Grants

The following two charts show, for the award years 2000-2001 to 2014-2015, total Pell 

recipients (in thousands) by type and control of institution; and the institutional share 

(percentage) of total Pell recipients.

O-28
STUDENT FINANCIAL ASSISTANCE

Federal Pell Grants

PROGRAM OUTPUT MEASURES 

(dollars in thousands)

Output Measures 2015 2016 2017

Recipients 7,670,000 7,679,000 7,719,000

Aid available to students1 $28,528,650 $28,282,605 $30,975,405

Maximum grant (in whole dollars) $5,775 $5,815 $5,935

Minimum grant (in whole dollars)2 $577 $582 $593

Average grant (in whole dollars) $3,720 $3,683 $4,013

1

Overall aid available reflects the estimated cost of the program minus administrative costs of $5 per recipient. 2

The minimum grant reflects the statutory minimum, but the actual minimum grant published by the Department 

may be slightly higher due to the calculation methodology used in the payment schedule.

PROGRAM PERFORMANCE INFORMATION

This section presents selected program performance information, including, for example, GPRA 

goals, objectives, indicators and performance data and targets; and an assessment of the 

progress made toward achieving program results. Achievement of program results is based on 

the cumulative effect of the resources provided in previous years and those requested in fiscal 

year 2017 and future years, as well as the resources and efforts invested by those served by 

this program.

Because the Federal Pell Grant program account relies on the same performance measures, 

strategies, and program improvement activities that apply to all the student financial assistance 

grant programs, Pell program performance is discussed in the Student Aid Overview and is 

not repeated here.

O-29
STUDENT FINANCIAL ASSISTANCE

Federal supplemental educational opportunity grants

(Higher Education Act of 1965, Title IV, Part A, Subpart 3)

(dollars in thousands)

FY 2017 Authorization: To be determined1

Budget authority: 

2016 2017 Change

$733,130 $733,130 0

1

The GEPA extension applies through September 30, 2015; reauthorizing legislation is sought for fiscal year 

2017.

PROGRAM DESCRIPTION

The Federal Supplemental Educational Opportunity Grant (SEOG) program provides needbased grant aid to eligible undergraduate students to help reduce financial barriers to 

postsecondary education. Federal funding allocations are awarded to qualifying postsecondary 

institutions under a statutory formula. Unlike the Pell Grant program, the SEOG program is 

administered by institutional financial aid administrators who have substantial flexibility in 

determining student awards.

The funding provided for the SEOG program is available for 2 years. Funds become available 

for obligation on October 1 of the fiscal year in which they are appropriated and remain available 

through September 30 of the following fiscal year. Funds proposed for fiscal year 2017 would 

be used for the 2017-2018 award year, which runs from July 1, 2017, through June 30, 2018.

Institutional participation: Roughly 3,700 postsecondary institutions receive funds under the 

SEOG program. Under the statutory formula, funds are distributed to institutions first on the 

basis of the institution's fiscal year 1999 SEOG program base guarantee and pro rata share (a 

hold harmless basis), and then on the basis of the aggregate need of the eligible undergraduate 

students in attendance. The current “hold harmless” provision distorts the allocation of funding 

among institutions so that certain institutions receive more funds than if the funds were solely 

distributed based on their students’ financial need.

Institutional matching: Participating institutions are required by statute to contribute at least 

25 percent of the SEOG award amounts. The institutional share can be met using the 

institution's own resources, State grants, or funds from foundations or other charitable 

organizations.

Student participation: Students qualify for grants of up to $4,000 by demonstrating financial 

need under the needs analysis formula used for Federal student aid. Institutions must give first 

priority for awards to students with demonstrated “exceptional need” (students with the lowest 

Expected Family Contributions (EFCs) at the institution) who are also Pell Grant recipients. 

O-30
STUDENT FINANCIAL ASSISTANCE

Federal supplemental educational opportunity grants

Remaining awards are then available for students with exceptional need who are not Pell Grant 

recipients. In addition, if any part of the institution’s SEOG allocation determination to students 

is based, in part, on the financial need demonstrated by students who are independent or 

attending the institution less-than-full-time, then a reasonable portion of the allocation must be 

made available to such students.

Recipients must be undergraduates and cannot have received a bachelor’s degree and must be 

enrolled with the purpose of obtaining a degree or certificate at an eligible institution. 

Approximately 9 percent of undergraduates receive SEOG awards.

Recipients must also (1) have a high school diploma (or its equivalent); or (2) be homeschooled. 

Students who do not meet this criterion and who first enrolled in an eligible program of study on 

or after July 1, 2014 and also enrolled in an eligible career pathway program, as defined in 

section 484(d) of the HEA, must meet another alternatives: (1) pass an independently 

administered Department-approved ability-to-benefit test; (2) complete at least 6 credit hours or 

225 clock hours that are applicable toward a degree or certificate offered by the institution; or 

(3) complete a State process approved by the Department.

Students who did not have a high school diploma and were enrolled in an eligible program prior 

to July 1, 2012, may continue to receive SEOG funds by meeting the requirements of a 

grandfathering test designed by the Department and documented by the institution.

Students already in default on a Federal student loan or who owe an overpayment on any other 

previously received Federal student aid may not receive a SEOG unless they repay the debt in 

full, or makes satisfactory repayment arrangements.

Institutional administrative provisions:

• Administrative costs. Each institution’s administrative cost allowance is based upon its 

expenditures for all three campus-based programs (SEOG, Work-Student, or Perkins Loan 

Program excluding the amount of Perkins loans assigned to the Department). An institution 

may use up to 5 percent of the first $2.75 million of its program expenditures; plus up to 

4 percent of expenditures greater than $2.75 million but less than $5.5 million; and up to 

3 percent of expenditures greater than $5.5 million during an award year to meet 

administrative costs associated with these programs.

• Transferability of funds. An institution may transfer up to 25 percent of Work-Study funds to 

SEOG. Up to 10 percent of an institution’s SEOG funds may, at the discretion of the 

institution, be used for expenditures for the preceding fiscal year, and up to 10 percent of an 

institution’s SEOG funds may remain available for the next fiscal year.

• Reallocation of funds. Excess funds available because of under-utilization by institutions 

are reallocated to other institutions in accordance with program regulations. An institution 

returning more than 10 percent of its allocation will have its subsequent allocation reduced 

by the same amount.

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STUDENT FINANCIAL ASSISTANCE

Federal supplemental educational opportunity grants

Funding levels for the past 5 fiscal years were:

Fiscal Year (dollars in thousands)

2012.............................................................. ..............$734,599

2013.............................................................. ................696,175

2014.............................................................. ................733,100

2015.............................................................. ................733,100

2016.............................................................. ................733,100

FY 2017 BUDGET REQUEST

The Administration requests $733.1 million for the SEOG program in fiscal year 2017, the same 

level as in fiscal year 2016. The President’s 2017 Budget proposes to reform Federal SEOG 

allocations to target those institutions that enroll and graduate higher numbers of Pell-eligible 

students, and offer affordable and quality education and training such that graduates can obtain 

employment and repay their educational debt.

The fiscal year 2017 Budget Request for this program is best understood in the context of the 

Administration’s proposals for the student aid programs as a whole. Accordingly, student 

assistance policy proposals are discussed in greater detail in the Student Aid Overview.

The fiscal year 2017 request, in conjunction with institutional matching funds, would generate 

$925 million in available aid for an estimated 1.5 million awards.

PROGRAM OUTPUT MEASURES

(dollars in thousands)

Output Measures 2015 2016 2017

Recipients 1,547,008 1,547,008 1,547,008

Aid available to students1 $925,246 $925,246 $925,246

Average award (in whole dollars) $598 $598 $598

1

Aid available includes budget authority, institutional matching funds, transfers from Perkins Loans and Federal 

Work-Study programs, minus administrative costs.

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STUDENT FINANCIAL ASSISTANCE

Federal supplemental educational opportunity grants

PROGRAM PERFORMANCE INFORMATION

This section presents selected program performance information, including, for example, GPRA 

goals, objectives, measures, and performance targets and data; and an assessment of the 

progress made toward achieving program results. Achievement of results is based on the 

cumulative effect of the resources provided in previous years and those requested in fiscal year 

2017 and the future as well as the resources and efforts invested by institutions.

Because the programs in the Student Financial Assistance account rely on the same 

performance data, performance measures, strategies, and program improvement activities that 

apply to all of the programs, that information is discussed in the Student Aid Overview and is

not repeated here.

Distribution of SEOG Funds by Student Status and Income Level:

The following tables (structured to compare across the programs in the SFA account) show the 

distribution of SEOG funds to dependent and independent students at various income levels in 

2013-2014. These tables include the most recent distributional data available, which may not 

match directly with the data provided in the Program Output Measures section.

In 2013-2014, 71 percent of dependent SEOG recipients had family income levels under 

$30,000 and 76 percent of independent SEOG recipients had family income levels under 

$20,000.

Distribution of SEOG to Dependent Undergraduates in 2013-14

Income Level Recipients Available Aid Average 

Award

0 - $5,999 126,122 $87,614,952 $695

$6,000 - $11,999 76,229 54,681,100 717

$12,000 - $23,999 224,646 163,991,504 730

$24,001 - $29,999 88,484 68,539,788 775

$30,000 + 214,044 173,660,212 811

Total Dependent 729,525 548,487,556 752

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STUDENT FINANCIAL ASSISTANCE

Federal supplemental educational opportunity grants

Distribution of SEOG to Independent Undergraduates in 2013-14

Income Level Recipients Available Aid Average 

Award

0 - $ 1,999 208,548 $98,788,283 $474

$2,000 - $ 3,999 52,878 26,811,134 507

$4,000 - $ 7,999 110,546 53,905,406 488

$8,000 - $11,999 108,361 50,027,128 462

$12,000 - $15,999 77,077 33,289,601 432

$16,000 - $19,999 64,935 27,845,029 429

$20,000 + 195,138 86,091,755 441

Total Independent 817,483 376,758,336 461

All Undergraduates 1,547,008 925,245,892 598

Distribution of SEOG Funds by Type of Institution:

The distribution of SEOG assistance to institutions is controlled by a statutory formula. The 

distribution of SEOG across different types of institutions has remained relatively constant over 

time due to this formula and the base guarantee. The distribution of aid by institution type has 

remained relatively constant over the last 5 years. 

The following table shows the distribution of SEOG to students attending different types of 

institutions in 2013-2014. The majority of funding goes to students attending public institutions.

Distribution of SEOG by Type of Institution in 2013-14

Institution

Type Recipients Available Aid

Average 

Award

Percent of 

SEOG Aid

Public 4-Year 437,906 $304,182,368 $695 32.9%

Public 2-Year 399,538 163,039,840 408 17.6

Private 336,072 322,813,169 961 34.9

Proprietary 373,492 135,210,515 362 14.6

Total 1,547,008 925,245,892 598 100.0

NOTE: Percentages may not total to 100 percent due to rounding.

O-34
STUDENT FINANCIAL ASSISTANCE

Federal work-study

(Higher Education Act of 1965, Title IV, Part C)

(dollars in thousands)

FY 2017 Authorization: To be determined1

Budget authority:

Period of fund availability:2016 2017 Change

$989,728 $989,728 0

1

The GEPA extension expires September 30, 2015; reauthorizing legislation is sought for FY 2016.

PROGRAM DESCRIPTION

The Federal Work-Study program ensures access to postsecondary education and lifelong 

learning by assisting needy undergraduate and graduate students in financing postsecondary 

education costs through part-time employment. Federal funds are distributed to qualifying 

institutions whose financial aid administrators select qualified students with financial need for 

employment. Students may be employed by the institution; by a Federal, State, or local public 

agency or private nonprofit organization; or by a private for-profit organization.

The funding for the Work-Study program is available for 2 fiscal years. Funds become available 

for obligation on October 1 of the fiscal year in which they are appropriated and remain available 

through September 30 of the following fiscal year. Funds requested for fiscal year 2017 would 

be used for the 2017-2018 award year, which runs from July 1, 2017 through June 30, 2018.

Institutional participation: Almost 3,300 institutions participate in the Work-Study program. 

Funds are distributed to institutions based on a statutory formula. The formula starts with the 

institution's fiscal year 1999 Work-Study program base guarantee and pro rata share, and 

bases the allocation on the aggregate need of the eligible undergraduate students in 

attendance. The Work-Study program is administered by institutional financial aid 

administrators who have substantial flexibility in determining student awards.

O-35
STUDENT FINANCIAL ASSISTANCE

Federal work study

If an institution is a proprietary school employing its own students, this employment must be: 

(1) on campus, except that at least 7 percent of the total funds granted must be used to 

compensate students employed in community service activities; (2) related, to the maximum 

extent practicable, to the student’s educational objectives; and (3) related to providing student 

services. The employment tasks of Work-Study students, however, must not involve the 

solicitation of potential students to enroll in the school.

Institutional matching: In general, participating institutions or other employers must contribute at 

least 25 percent of a student’s part-time earnings (or 50 percent in the case of private-for-profit 

employers). The Federal share may be up to 90 percent for students employed at a private 

nonprofit organization or a Federal, State, or local public agency that would otherwise be unable 

to afford the costs of employing those students. The 90 percent Federal share is limited to no 

more than 10 percent of the students paid under the Federal Work-Study Program; in addition, 

the school may not own, operate, or control the organization, and the school must select the 

organization or agency on a case-by-case basis.

Student participation: Students qualify for Work-Study awards by demonstrating financial need 

under the statutory need analysis system for the Federal student financial assistance programs. 

Hourly earnings must not be less than the current Federal minimum wage. Approximately 

7 percent of undergraduates participate in Work-Study.

In addition, if the institution’s allocation is based in part on the financial need demonstrated by 

independent students or students attending the institution less-than-full-time, then a reasonable 

portion of the allocation must be made available to such students.

Recipients must be enrolled with the purpose of obtaining a degree or certificate at an eligible 

institution. Students must also have a high school diploma (or its equivalent) or be 

homeschooled. Students who do not meet this criterion and who first enrolled in an eligible 

program of study on or after July 1, 2014, and also enrolled in an eligible career pathway 

program as defined in section 484(d) of the HEA, must meet one of the following alternatives: 

(1) pass an independently administered Department-approved ability-to-benefit test; 

(2) complete at least 6 credit hours or 225 clock hours that are applicable toward a degree or 

certificate offered by the institution; or (3) complete a State process approved by the 

Department.

Students who did not have a high school diploma and were enrolled in an eligible program prior 

to July 1, 2012, may continue to receive Work-Study funds by meeting the requirements of a 

grandfathering test designed by the Department and documented by the institution.

Students who have defaulted on a Federal student loan or who owe an overpayment on any 

other previously received Federal student aid, however, may not receive additional funds under 

the program unless they repay the debt in full, or make satisfactory repayment arrangements 

with the holder of the debt.

Institutional administrative provisions: Institutions may use their allocations to support a variety 

of Work-Study activities, including:

• Community service. An institution must use at least 7 percent of its Federal allocation for 

payments to students employed in community service activities. Other Work-Study jobs that 

qualify as community service activities include community-accessible childcare and 

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STUDENT FINANCIAL ASSISTANCE

Federal work study

assistance for disabled students. The HEOA expanded the definition of community service 

to include emergency preparedness and response. The eligible institution, at its discretion, 

may count any contribution made by the employer toward the non-Federal share of the 

student’s compensation.

• Tutoring and literacy activities. An institution must include at least one tutoring or family 

literacy project as part of its community service activities. Under this requirement, priority is 

to be given to the employment of Work-Study recipients as reading tutors in schools that are 

participating in a reading reform project designed to train teachers to teach reading on the 

basis of scientifically based research on reading, and which is funded under the Elementary 

and Secondary Education Act of 1965, as amended. In 2010-11, the last year data was 

collected, almost 39,000 Work-Study students were employed as reading tutors.

• Private sector. An institution may use up to 25 percent of its Work-Study allocation to match 

earnings of students working for private for-profit organizations. Students must, to the 

maximum extent practicable, be placed in jobs that are academically relevant to their course 

of study. Work-Study funds may not be used to pay any employee who would otherwise be 

employed by the private organization.

• Job Location and Development. An institution may use up to 10 percent of its Work-Study 

allocation, or a maximum of $50,000, whichever is less, for administrative expenses 

associated with the establishment or expansion of a Job Location and Development (JLD) 

program. This program locates and develops off-campus full- or part-time jobs or 

community service jobs for currently enrolled students. The Federal share of the JLD 

program costs cannot exceed 80 percent.

• Work Colleges. A “Work College” is an institution that requires all resident students to 

participate in a work-learning program as an integral part of the institution’s educational 

philosophy. These colleges are authorized to receive special awards in addition to their 

regular Work-Study allocations to support such programs. Work Colleges must match 

Federal allocations on a dollar-for-dollar basis. In addition, Work Colleges may transfer all 

of their regular Work-Study allotments for use under the Work Colleges program.

• Administrative costs. Each institution’s administrative cost allowance is based upon its 

expenditures for all three campus-based programs, excluding the amount of Perkins loans 

assigned to the Department. Under a statutory formula, an institution may use up to 

5 percent of the first $2.75 million of its program expenditures; plus up to 4 percent of 

expenditures greater than $2.75 million but less than $5.5 million; and up to 3 percent of 

expenditures greater than $5.5 million during an award year to meet administrative costs 

associated with these programs.

• Transferability of funds. An institution may transfer up to 25 percent of its allocation from 

Perkins Loans Federal Capital Contributions to SEOG or Work-Study (or both) and up to 

25 percent of Work-Study to SEOG. Up to 10 percent of an institution’s Work-Study funds 

may, at the discretion of the institution, be used for expenditures for the preceding fiscal 

year. In addition, up to 10 percent of an institution’s Work-Study funds may, at the 

discretion of the institution, remain available for the next fiscal year.

• Reallocation. If funds become available because of under-utilization by institutions, excess 

funds are reallocated only to other institutions that used at least 5 percent of their WorkO-37
STUDENT FINANCIAL ASSISTANCE

Federal work study

Study allocations to compensate students employed in tutoring in reading and family literacy 

activities in the preceding year. Reallocated funds must be used to support student 

employment in community service activities.

• Disasters. The Higher Education Opportunity Act added a provision under which an eligible 

institution located in an area affected by a major disaster, as determined by the Secretary, 

may make Work-Study payments to disaster-affected students, for the period of time (not to 

exceed 1 academic year) in which the students were prevented from fulfilling their WorkStudy obligations due to the disaster. Payment may be made in an amount equal to or less 

than the amount a student would have been paid had the student been able to complete the 

work obligation necessary to receive Work-Study funds.

Funding levels for the past 5 fiscal years were:

Fiscal Year (dollars in thousands)

2012.............................................................. ..............$976,682

2013.............................................................. ................925,595

2014.............................................................. ................974,728

2015.............................................................. ................989,728

2016.............................................................. ................989,728

FY 2017 BUDGET REQUEST

As with the SEOG and Perkins Loan programs, the 2017 Budget proposes to reform Federal 

Work-Study allocations to target those institutions that enroll and graduate higher numbers of 

Pell-eligible students, and offer affordable and quality education and training such that 

graduates can obtain employment and repay their educational debt.

The fiscal year 2017 Budget Requests $989.7 million for the Work-Study program, level with the 

fiscal year 2016 amount. The request will generate nearly $1.13 billion in available aid to 

support more than 674,000 part-time jobs for students, helping to meet the educational costs of 

undergraduate and graduate students and to expand their future employment prospects.

The fiscal year 2017 Request for this program is best understood in the context of the 

Administration’s proposals for the student aid programs as a whole. Accordingly, policy 

proposals are discussed in greater detail in the Student Aid Overview.

PROGRAM OUTPUT MEASURES

(dollars in thousands)

Output Measures 2015 2016 2017

Recipients 674,160 674,160 674,160

Aid available to students1 $1,125,372 $1,125,372 $1,125,372

Average award (in whole dollars) $1,669 $1,669 $1,669

1

Aid available includes budget authority, institutional matching funds, transfers from Perkins Loans and Federal 

Work-Study programs, minus administrative costs.

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STUDENT FINANCIAL ASSISTANCE

Federal work study

PROGRAM PERFORMANCE INFORMATION

This section presents selected program performance information, including, for example, GPRA 

goals, objectives, measures, and performance targets and data; and an assessment of the 

progress made toward achieving program results. Achievement of results is based on the 

cumulative effect of the resources provided in previous years and those requested in fiscal year

2017 and future years, as well as the resources and efforts invested by those served by this 

program.

Because the programs in the Student Financial Assistance account rely on the same 

performance data, performance measures, strategies, and program improvement activities that 

apply to all of the programs, that information is discussed in the Student Aid Overview and is

not repeated here.

Distribution of Work-Study Funds by Student Status and Income Level:

The following tables (structured to provide a common basis of comparison among the programs 

in the SFA account) illustrate the distribution of Work-Study funds to dependent students and 

the distribution to independent students at various income levels for 2013-2014. These tables 

include the most recent distributional data available, which may not correspond directly with the 

data provided in the Program Output Measures section.

Distribution of Work-Study to Dependent Undergraduates in 2013-14

Income Level Recipients Available Aid Average 

Award

0 - $5,999 39,554 $64,758,753 $1,637

$6,000 - $11,999 24,434 41,520,404 1,699

$12,000 - $23,999 73,424 123,496,561 1,682

$24,001 - $29,999 35,029 57,897,325 1,653

$30,000 + 342,042 506,999,856 1,482

Total Dependent 514,483 794,372,899 1,544

O-39
STUDENT FINANCIAL ASSISTANCE

Federal work study

Distribution of Work-Study to Independent Undergraduates and Graduates in 2013-14

Income Level Recipients Available Aid Average 

Award

0 - $ 1,999 31,830 $59,132,999 $1,858

$2,000 - $ 3,999 10,916 20,539,158 1,882

$4,000 - $ 7,999 19,053 38,216,965 2,006

$8,000 - $11,999 14,771 30,578,788 2,070

$12,000 - $15,999 9,823 19,601,042 1,995

$16,000 - $19,999 6,437 12,594,667 1,957

$20,000 + 18,092 33,851,329 1,871

Total 

Independent 110,922 214,514,948 1,934

Graduate Students 46,494 112,709,334 2,424

All Students 671,899 1,121,597,181 1,669

Distribution of Work-Study Funds by Type of Institution:

The Work-Study program is a campus-based program and the distribution of funds to 

institutions is controlled by a statutory formula. As a result, the distribution of Work-Study 

assistance across different types of institutions has remained relatively constant over time. The 

table below shows the distribution of Work-Study to students attending different types of 

institutions in 2013-2014.

Distribution of Work-Study (WS) by Type of Institution in 2013-14

Institution 

Type Recipients Available Aid

Average 

Award

Percent of 

WS Aid

Public 4-Year 221,581 $396,463,600 $1,789 35.4%

Public 2-Year 72,723 141,273,042 1,943 12.6

Private 351,254 521,595,208 1,485 46.5

Proprietary 26,341 62,265,331 2,364 5.5

Total 671,899 1,121,597,181 1,669 100.0

NOTE: Percentages may not total to 100 percent due to rounding.

Community Service Activities:

The Work-Study program has a long tradition of providing opportunities for students to perform 

community service activities—supporting an important cooperative link between students, 

colleges and the local community. At least 7 percent of an institution's Work-Study allotment 

must be used to pay students employed in community service jobs, unless the institution obtains 

a waiver from the Department. Nationally, 14 percent of Work-Study funds are used for jobs in 

community service.

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STUDENT FINANCIAL ASSISTANCE

Federal work study

Participating colleges and universities must ensure that at least one eligible project provides 

services to both children and their parents. Allowable activities, such as family literacy 

programs, emphasize preparing parents to read to their own children.

The Department has waived the usual 25 percent institutional contribution, allowing Work-Study 

funds to pay up to 100 percent of the wages to support students who tutor children in 

mathematics, or reading, or who serve in family literacy programs.

Distribution of Work-Study Funds to Students in Community Service Activities:

The table below shows the distribution of Work-Study assistance to students employed in 

community service activities in 2013-2014.

Distribution of Work-Study to Students in Community Service Activities by Type of 

Institution in 2013-14

Institution 

Type Recipients Available Aid

Average 

Award

Percent of 

WS Aid

Public 4-Year 43,011 $63,030,929 $1,465 39.8%

Public 2-Year 13,336 23,224,656 1,742 14.7

Private 56,324 63,222,231 1,122 39.9

Proprietary 4,797 9,105,869 1,898 5.7

Total 117,468 158,583,685 1,350 100.0

NOTE: Percentages may not total to 100 percent due to rounding.

O-41
STUDENT FINANCIAL ASSISTANCE

Federal Perkins loans

(Higher Education Act of 1965, Title IV, Part E)

(dollars in thousands)

FY 2017 Authorization: (Proposed legislation)1

Mandatory Budget Authority: Period of fund availability: 

2016 20172 Change

New loan subsidies3 0 -$640,312 -$640,312

 Perkins Total Net Subsidy 0 -$640,312 -$640,312

1

The Perkins Loan program was recently reauthorized through the end of FY 2017 by the Federal Perkins Loan 

Program Extension Act of 2015. 2

Legislation is sought for 2017 to shift Perkins Loans to a mandatory credit program. (Institutions would continue 

to be compensated for Perkins Loans cancellations, but from Federal collections on outstanding Perkins Loans rather 

than discretionary appropriations.) 3

New loan subsidies, which in the Perkins proposal would be appropriated through a new Federal Perkins Loan 

Program account, reflect the net present value of estimated Federal non-administrative lifetime costs for loans made 

in a given fiscal year. A negative number indicates estimated revenues exceed estimated costs.

PROGRAM DESCRIPTION

The Federal Perkins Loan program provides long-term, low-interest loans to financially needy

undergraduate and graduate students to help meet their higher education costs. Loans are 

made from Federal revolving funds held at institutions composed of: (1) Federal capital 

contributions (FCC); (2) institutional matching funds equaling at least one-third of the FCC;

(3) payments on prior-year student loans; and (4) reimbursements for loans cancelled in 

exchange for specific types of teaching, or military or public service. However, no Federal 

Capital Contributions have been made since 2004.

The Perkins Loan program was recently reauthorized through September 30, 2017, by the 

Federal Perkins Loan Program Extension Act of 2015 (the Extension Act). Under the Extension 

Act, schools may disburse new Perkins Loans to eligible undergraduate borrowers through 

September 2017, and to graduate students with existing Perkins Loans through September 

2016. Additionally, undergraduate borrowers are required to exhaust eligibility for both 

subsidized and unsubsidized Federal direct loans before receiving a Perkins Loan. The 

Extension Act also eliminated the grandfathering provision in Section 461(b)(2) of the Higher 

Education Act (HEA) that had allowed schools to make Perkins Loans to borrowers who 

received a disbursement before June 30, 2015, for up to 5 additional years. In FY 2018, 

Federal funds in institutional revolving funds will be recalled to the Federal Government. The 

Administration’s 2017 Budget proposes new legislation to reform and expand the Perkins Loan 

program to replace the current program as of July 1, 2017. 

O-42
STUDENT FINANCIAL ASSISTANCE

Federal Perkins loans

Institutional participation: Roughly 1,500 postsecondary institutions make loans under the 

Perkins Loan program. The Perkins Loan program is administered by institutional financial aid 

administrators who have substantial flexibility in determining student awards.

Institutional matching: Institutions contribute one-third of the FCC in matching funds.

Default rate provisions: In general, a school’s participation in the program is terminated if its 3-

year cohort default rate exceeds 50 percent for 3 consecutive years.

Institutional administrative provisions:

• Loan Servicing and collections. Schools are responsible for making loans, servicing, and 

collections, including the establishment of repayment schedules and borrower counseling. 

Most servicing and collection activities are performed by private contractors employed by the 

schools. Collections on existing loans were approximately $1.2 billion in award year

2013-14.

• Loan Rehabilitation. Participating institutions are required to establish a loan rehabilitation 

program for all defaulted borrowers. Loan rehabilitation allows the institution to eliminate the 

loan from default rate calculations. In order to rehabilitate a defaulted loan, borrowers are 

required to make nine consecutive on-time monthly payments to the institution. The first 

payment of the dictated 9-month cycle is considered the first payment of a new 10-year 

payment cycle. Once the loan is rehabilitated, the institution must update the borrower’s 

loan status with any credit reporting agency to which the default was reported. A loan can 

only be rehabilitated once.

• Administrative costs. Each institution’s administrative cost allowance is based upon its 

expenditures for all three campus-based programs, excluding the amount of Perkins loans 

assigned to the Department. Under a statutory formula, an institution may use up to

5 percent of the first $2.75 million of its program expenditures; plus up to 4 percent of 

expenditures greater than $2.75 million but less than $5.5 million; and up to 3 percent of 

expenditures greater than $5.5 million during an award year to meet administrative costs 

associated with the SEOG, Work-Study, and Perkins Loan programs.

Student participation: Students qualify for loans by demonstrating financial need under the 

statutory Federal student aid need analysis system. An eligible borrower is an undergraduate, 

graduate, or professional student with demonstrated financial need enrolled at an eligible 

postsecondary institution. In addition, if the institution’s Perkins loan allocation was based, in 

part, on the financial need demonstrated by students who are independent students or attending 

the institution less-than-full-time, then a reasonable portion of the allocation must be made 

available to such students. However, a student already in default on a loan made under any 

Title IV, HEA loan program, or who owes an overpayment on any other previously received 

Federal student aid, may not borrow under the program unless he or she repays the debt in full, 

or makes satisfactory repayment arrangements with the holder of the debt. Undergraduate 

borrowers are required to exhaust eligibility for both subsidized and unsubsidized Federal direct 

loans before receiving a Perkins Loan.

A borrower makes no principal repayments during in-school, grace, and deferment periods, and 

interest is neither paid nor accrued during these periods. During the repayment period (which 

O-43
STUDENT FINANCIAL ASSISTANCE

Federal Perkins loans

normally may not exceed 10 years), interest is charged at a 5 percent annual rate. Maximum 

loan amounts were increased by the Higher Education Opportunity Act (HEOA). The maximum 

annual amount a student can borrow under the Perkins Loan program is $5,500 for 

undergraduates and $8,000 for graduate and professional students; $60,000 for the 

combination of undergraduate and graduate study; $27,500 for students who have completed 2 

years of undergraduate education, but have not received a bachelor's degree; and $11,000 for 

all other students.

Loan cancellations: In order to reduce the loan burden on Perkins loan borrowers who enter 

certain fields of public service, all or a portion of the repayment obligation on Perkins loans is 

canceled in exchange for specified periods of such service. Perkins loan balances are also 

canceled in the event of a borrower's death, or total and permanent disability.

In general, the schools’ share of their revolving funds are reimbursed for 100 percent of the 

principal and accrued interest of the loan canceled, reducing the amount the Federal 

Government will collect when the Federal share is repaid after the end of the program.

The areas of public service that qualify for cancellation include:

• Teaching in low-income areas and in special education, math, science, foreign language, 

bilingual education, and any other fields where State education agencies determine a 

shortage of qualified teachers exists, or serve full-time on the faculty at a tribal college or 

university.

• Full-time staff work in a preschool program under the Head Start Act.

• Military service in areas of hostilities and imminent danger.

• Peace Corps and VISTA service.

• Service as a law enforcement/corrections officer, firefighter, or public defender.

• Nurses and medical technicians providing health care services, professional providers of 

qualified early intervention services, and employees of qualified child/family service in lowincome communities.

The program has received no new appropriated funding since 2004.

FY 2017 BUDGET PROPOSAL

Perkins Loan Program Modernization and Expansion

The Budget proposes to modernize and expand the Perkins Loan program into a new 

Unsubsidized Perkins Loan program. The program would provide $8.5 billion in loans annually, 

allocating lending authority among institutions on the basis of the extent to which they enroll 

and graduate higher numbers of Pell-eligible students, and offer affordable and quality 

education such that graduates can repay their educational debt. This reform would replace the 

current program, which was recently reauthorized through the end of September 2017, and be 

in effect for the 2017-18 school year. When fully implemented, the new Perkins loan program 

O-44
STUDENT FINANCIAL ASSISTANCE

Federal Perkins loans

would provide eight and a half times the current Perkins loan volume and expand 

institutional participation by up to an additional 2,900 postsecondary institutions.

The Department would administer the new Perkins Loan program as a direct loan program; 

however, institutions would continue to have discretion over award aid to students. Modernizing 

and expanding the program would give more students increased access to Federal student 

loans that carry important protections and benefits, including income-based repayment plans 

and loan forgiveness options.

In addition, the new Perkins program would include a new formula for allocating lending 

authority among institutions of higher education. This formula would target those institutions 

that enroll and graduate higher numbers of Pell-eligible students, and offer affordable and 

quality education and training such that graduates can obtain employment and repay their 

educational debt. Schools will continue to have discretion with regard to student eligibility. 

Existing provisions, such as the institution’s ability to transfer or reallocate Perkins Loan funds to 

other campus-based programs – SEOG and Work-Study – and current statutory formulas, 

would no longer apply.

Mandatory loan subsidy costs associated with this program would be shown in a new Federal 

Perkins Loan program account.

Because the fiscal year 2017 Budget proposal for the new Perkins Loan program is best 

understood in the context of the Administration’s proposals for the student aid programs as a 

whole, program-specific funding information and policy proposals are discussed in the Student 

Aid Overview.

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STUDENT FINANCIAL ASSISTANCE

Federal Perkins loans

PROGRAM OUTPUT MEASURES

(dollars in thousands)

Output Measures 2015Footnote2016Footnote2017Footnote

Federal Perkins Loans

Federal Per kins Loans: Loan Recipients 539,448 401,349 401,349

Federal Per kins Loans: Loan volume1 (dollars in 

thousands) $1,171,513 $871,606 $871,606

Federal Per kins Loans: Average loan (in whole 

dollars) $2,172 $2,172 $2,172

Federal Per kins Loans: Participating Institutions 1,500 1,500 1,500

Unsubsidized Perkins Loans 

(Proposed)

Unsubsi dized Perki ns Loans ( Proposed) Loan Recipients — — 714,012

Unsubsi dized Perki ns Loans ( Proposed): Loan volume (dollars in 

thousands) — — $4,113,423

Unsubsi dized Perki ns Loans ( Proposed): Average loan (in whole 

dollars) — — 5,761

Unsubsi dized Perki ns Loans ( Proposed): Participating Institutions — — 4,4002

NOTE: Each participating institution uses its revolving fund to continue originating new loans.

1

Loan volume includes budget authority and institutional matching funds minus administrative costs.

2

Estimated maximum institutional participation level.

PROGRAM PERFORMANCE INFORMATION

This section presents selected program performance information, including, for example, GPRA 

goals, objectives, measures, and performance targets and data; and an assessment of the 

progress made toward achieving program results. Achievement of results is based on the 

cumulative effect of the resources provided in previous years and those requested in fiscal year 

2017 and future years, as well as the resources and efforts invested by those served by this 

program.

Because the programs in the Student Financial Assistance account rely on the same 

performance data, performance measures, strategies, and program improvement activities that 

apply to all of the programs, that information is discussed in the Student Aid Overview and is

not repeated here.

Distribution of Perkins Loans by Student Status and Income Levels:

The tables below (structured to provide a common basis of comparison among the programs in 

the SFA account) show the distribution of Perkins loans to dependent students and the 

distribution of Perkins loans to independent students – both undergraduate and graduate – at 

various income levels in 2013-2014. These tables include the most recent distributional data 

O-46
STUDENT FINANCIAL ASSISTANCE

Federal Perkins loans

available, which may not correspond directly with the data provided in the Program Output 

Measures section.

Distribution of Perkins to Dependent Undergraduates in 2013-14

Income Level Recipients Available Aid Average 

Award

0 - $5,999 25,254 $49,611,774 $1,965

$6,000 - $11,999 17,035 33,501,474 1,967

$12,000 - $23,999 52,790 102,730,804 1,946

$24,001 - $29,999 26,942 52,226,323 1,938

$30,000 + 242,323 477,887,541 1,972

Total Dependent 364,344 715,957,916 1,965

Distribution of Perkins to Independent Undergraduates and Graduates in 2013-14

Income Level Recipients Available Aid Average 

Award

0 - $ 1,999 23,433 $44,714,925 $1,908

$2,000 - $ 3,999 7,367 14,139,108 1,919

$4,000 - $ 7,999 14,388 27,826,044 1,934

$8,000 - $11,999 13,140 24,825,342 1,889

$12,000 - $15,999 10,035 18,563,379 1,850

$16,000 - $19,999 7,905 14,544,801 1,840

$20,000 + 28,093 53,781,589 1,914

Total 

Independent 104,361 198,395,188 1,901

Graduate Students 70,743 257,160,332 3,635

All Students 539,448 1,171,513,436 2,172

Distribution of Perkins Loans by Type of Institution:

The Perkins Loan program is a campus-based program and distribution of new capital funds to 

institutions is controlled by a statutory formula. Compared to 5 years ago (academic year 2008-

2009), the distribution of Perkins Loan assistance among different types of institutions has 

changed to a large degree: new Perkins Loan volume at public 4-year institutions has 

increased by 35 percent over 5 years ago, and increased at proprietary institutions by 

12 percent over the same period, while volume has decreased by 45 percent at public 2-year 

institutions.

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STUDENT FINANCIAL ASSISTANCE

Federal Perkins loans

The table below illustrates the sector distribution of Perkins loans to students in 2013-2014:

Distribution of Perkins by Type of Institution in 2013-14

Institution 

Type Recipients Loan Volume

Average 

Award

Percent of 

Perkins Aid

Public 4-Year 271,499 $530,621,248 $1,954 45.3%

Public 2-Year 3,441 6,617,688 1,923 0.6

Private 246,509 602,460,927 2,444 51.4

Proprietary 17,999 31,813,573 1,768 2.7

Total 539,448 1,171,513,436 2,172 100.0

NOTE: Percentages may not total to 100 percent due to rounding.

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STUDENT FINANCIAL ASSISTANCE

Iraq and Afghanistan service grants

(Higher Education Act of 1965, Title IV, Part A, Subpart 10)

(dollars in thousands)

FY 2017 Authorization: Indefinite 

Mandatory Budget Authority:

2016 20171 Change

$453 0 -$453

1

The 2017 request reflects the President’s Budget policy to move the current Iraq and Afghanistan Service 

Grants program into the Pell Grant program. The estimated 2017 budget authority for Iraq and Afghanistan Service 

Grants is $495 thousand.

PROGRAM DESCRIPTION

The Iraq and Afghanistan Service Grants (IASG) program provides non-need-based grants to

students whose parent or guardian was a member of the Armed Forces who died in Iraq or 

Afghanistan as a result of performing military service after September 11, 2001. Students are 

not required to be eligible for a Pell Grant in order to receive a Service Grant; however, the 

student must be 24 years old or younger; or, if older than 24, must have been enrolled in an 

institution of higher education at the time of the parent or guardian’s death.

Service Grants are equal to the maximum Pell Grant for a given award year, which is $5,815 in 

the 2016-2017 award year, and will increase with inflation for the 2017-2018 award year. 

Service Grants are excluded from the total “estimated financial assistance” used to determine a 

student’s eligibility for other Title IV Federal financial aid. In combination with other student aid, 

however, the Service Grant may not result in a student’s awards exceeding their cost of 

attendance. As with Pell Grant eligibility, students are limited to 12 semesters of full-time 

enrollment.

Funding levels for the past 5 fiscal years were:

Fiscal Year (dollars in thousands)

2012.............................................................. .....................$180

2013.............................................................. .......................246

2014.............................................................. .......................294

2015.............................................................. .......................369

2016.............................................................. .......................453

FY 2017 BUDGET PROPOSAL

The 2017 Budget proposes to move the Iraq and Afghanistan Service Grant program into the 

Pell Grant program to avoid further award reductions as a result of sequestration and ensure

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STUDENT FINANCIAL ASSISTANCE

Iraq and Afghanistan service grants

our veterans’ children receive a full, non-sequestered aid award. As a result of sequestration, 

the current IASG program has, since award year 2012-2013, annually reduced the maximum 

grant for which recipients are eligible. The Budget proposal would allow these students to 

receive the full, equivalent Pell Grant (which is not subject to sequestration). The first IASG 

recipient awards were given in award year 2010-2011 to fewer than 1,000 recipients. The 

recipient level is expected to remain at fewer than 1,000 recipients through award year 2017-

2018.

PROGRAM OUTPUT MEASURES

(dollars in thousands)

Output Measures 2015 2016 2017

Recipients (1) (1) (1)

Aid available to students

(dollars in thousands)2 $376 $477 0

Maximum grant (whole dollars)3 $5,381 $5,448 0

Average grant (whole dollars) $4,881 $4,918 0

1

Recipients estimated to number fewer than 1,000.

2

Aid available is the amount of funding available for new IASG awards to students in any single academic year. 

This amount differs from budget authority because 1 fiscal year spans across 2 academic years. For instance, total 

aid available in fiscal year 2015 is comprised of portions of both academic year 2014-2015 (ending June 30) and 

2015-2016 (beginning July 1). Amount of aid available in fiscal year 2017 reflects Budget policy to move IASG to the 

Pell Grant program. In 2017, aid available is estimated to be $572 thousand. 3

Maximum grant amounts reflect impact of sequestration. Amount of the maximum grant in 2017 reflects Budget 

policy to move IASG to the Pell Grant Program.

PROGRAM PERFORMANCE INFORMATION

This section presents selected program performance information, including, for example, GPRA 

goals, objectives, measures, and performance targets and data; and an assessment of the 

progress made toward achieving program results. Achievement of results is based on the 

cumulative effect of the resources provided in previous years and those requested in fiscal year

2017 and future years, as well as the resources and efforts invested by those served by this 

program.

Because the programs in the Student Financial Assistance account rely on the same 

performance data, when available, the Iraq and Afghanistan Service Grants performance 

measures, strategies, and program improvement activities will be discussed in the Student Aid 

Overview and not repeated here.

Distribution of Iraq and Afghanistan Service Grant Funds by Type of Institution:

The data provided in the table below shows the distribution of Iraq and Afghanistan service 

grants to students attending different types of institutions in award year 2014-2015.

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STUDENT FINANCIAL ASSISTANCE

Iraq and Afghanistan service grants

.

Distribution of IASG by Type of Institution in 2014-15

Institution 

Type Recipients Available Aid

Average 

Award

Percent of 

IASG Aid

Public 4-Year 47 $211,896 $4,508 59%

Public 2-Year 8 35,861 4,483 10

Private 19 99,694 5,247 29

Proprietary 1 5,317 5,317 2

Total 75 352,768 4,716 100

NOTE: Percentages may not total to 100 percent due to rounding.

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