Department of Education

STUDENT FINANCIAL ASSISTANCE

Fiscal Year 2014 Budget Request

CONTENTS

Page

Appropriations Language .................................................................................................. Q-1

Analysis of Language Provisions and Changes................................................................. Q-2

Appropriation Adjustments and Transfers ......................................................................... Q-3

Summary of Changes ....................................................................................................... Q-4

Authorizing Legislation...................................................................................................... Q-5

Appropriations History....................................................................................................... Q-7

Significant Items in FY 2013 Appropriations Reports......................................................... Q-8

Summary of Request ........................................................................................................ Q-9

Activities:

Federal Pell grants ........................................................................................................ Q-12

Federal supplemental educational opportunity grants.................................................... Q-26

Federal work-study........................................................................................................ Q-31

Federal Perkins loans.................................................................................................... Q-39

Iraq and Afghanistan service grants............................................................................... Q-46
Q-1

STUDENT FINANCIAL ASSISTANCE

Appropriations Language

For carrying out subparts 1, 3, and 101 of part A, and part C of title IV of the Higher 

Education Act of 1965, $24,685,281,000, which shall remain available through September 30, 

2015:

2 Provided, That, of amounts provided under this heading, $3,022,000,000 shall also be 

available for Pell Grants for award year 2015-2016.

3

The maximum Pell Grant for which a student shall be eligible during award year 2014-20154

shall be $4,860.

NOTES

A regular 2013 appropriation for this account had not been enacted at the time the budget was prepared; 

therefore, this account is operating under a continuing resolution (P.L. 112-175, as amended).

The amounts included for 2013 in this budget reflect the Administration’s 2013 policy proposals.

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.
Q-2

STUDENT FINANCIAL ASSISTANCE

Analysis of Language Provisions and Changes

Language Provision Explanation

1 For carrying out subparts 1, 3, and 10

of part A...

Subpart 10 is added to the language to include the 

specific subpart authorization for the Iraq and 

Afghanistan Service Grant program.

2 ... which shall remain available through 

September 30, 2015:

This language sets the availability of funds 

provided under the account through the end of 

fiscal year 2015.

3 Provided, That, of amounts provided 

under this heading, $3,022,000,000 shall 

also be available for Pell Grants for 

award year 2015-2016.

This language recognizes that funds specified, 

appropriated in 2014, are available for award year 

2015-2016.

4 The maximum Pell Grant for which a 

student shall be eligible during award 

year 2014-2015 shall be $4,860.

This language sets the maximum Pell Grant award 

for award year 2014-2015.
Q-3

STUDENT FINANCIAL ASSISTANCE

Appropriation Adjustments and Transfers

(dollars in thousands)

Appropriations/Adjustments/Transfers 2012 2013 2014

Discretionary:

Appropriation..................................................... $24,538,521 $24,535,281 $24,685,281

Across-the-board reduction (P.L. 112-74) ......... -3,240 0 0

Across-the-board increase (P.L. 112-175)......... 0 +150,156 0

Total, adjusted discretionary appropriation.... 24,535,281 24,685,437 24,685,281

Mandatory:

Appropriation..................................................... 18,745,180 12,441,432 7,044,231

Total, discretionary and mandatory

 appropriation.............................................. 43,280,461 37,126,869 31,729,512
Q-4

STUDENT FINANCIAL ASSISTANCE

Summary of Changes

(dollars in thousands)

2013................................................................................. $36,976,7131

2014................................................................................. 31,729,512

Net change ...................................... -5,247,201

1 Excludes 0.612 percent across-the-board increase of $150,156 in FY 2013 provided in P.L. 112-175.

Increases: 2013 base Change from base

Program:

Increase in Work-Study discretionary funding. $976,682 +$150,000

Subtotal, increases +150,000

Decreases: 2013 base Change from base

Program:

Decrease in mandatory funding to support Iraq and

Afghanistan Service Grants. $248 -$17

Decrease in mandatory funding provided to support

the Pell Grant program. 12,441,184 -5,397,184

Subtotal, decreases -5,397,201

Net change -5,247,201
STUDENT FINANCIAL ASSISTANCE

Authorizing Legislation

(dollars in thousands)

Activity

2013

Authorized

2013

Estimate

2014

Authorized

2014

Request

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

Federal Pell grants (HEA-IV-A-1) (discretionary) Indefinite $22,824,000 Indefinite $22,824,000

Federal Pell grants (mandatory) Indefinite 4,854,184 Indefinite 6,456,000

Federal Pell grants (mandatory) 1 Indefinite 7,587,000 Indefinite 588,000

Federal supplemental educational opportunity

grants (HEA-IV-A-3) Indefinite 734,599 Indefinite 734,599

Institutional payments (HEA-IV-G-489) 2 Indefinite Indefinite

Federal work-study (HEA-IV-C) Indefinite 976,682 Indefinite 1,126,682

Institutional payments (HEA-IV-G-489) 2 Indefinite Indefinite

Institutional payments for Job Location and

Development centers (HEA-IV-C-446) 3 Indefinite Indefinite

Work colleges (HEA-IV-C-448) Indefinite Indefinite

Iraq and Afghanistan Service Grants (HEA-IV-A-1) Indefinite 248 Indefinite 231

Federal Perkins loans (HEA-IV-E) (Legislation sought) 4

Federal capital contributions Indefinite 0 Indefinite 0

Loan cancellations (HEA-IV-E) Indefinite 0 Indefinite 0

Institutional payments (HEA-IV-G-489) 2 Indefinite 0 Indefinite 0

Unfunded authorizations:

Academic achievement incentive scholarships

(HEA-IV-A, Chapter 3)

Indefinite 0 Indefinite 0

Total definite authorization 0 0

Q-5
STUDENT FINANCIAL ASSISTANCE

Authorizing Legislation -- continued

(dollars in thousands)

Activity

2013

Authorized

2013

Estimate

2014

Authorized

2014

Request

Total discretionary appropriation $24,535,281 $24,685,281

Total mandatory appropriation 12,441,432 7,044,231

Total appropriation including 0.612 percent ATB

discretionary increase 24,685,437

Total appropriation 37,126,869 31,729,512

Note: HEA refers to the Higher Education Act of 1965, as amended. 1 Mandatory funding provided for discretionary program costs. 2 Institutions are authorized to use up to 5 percent of the first $2,750 thousand of expenditures for the Supplemental Educational Opportunity Grant, WorkStudy, and Perkins Loan programs for administrative expenses; plus 4 percent of expenses in excess of this amount but less than $5,500 thousand; plus 3 percent 

of expenses above $5,500 thousand.

3 Institutions are authorized to use not more than 10 percent, or $50 thousand, of their Work-Study allocations for the cost of establishing or expanding 

programs to locate or develop jobs, including community service jobs, for currently enrolled students. The Federal share cannot exceed 90 percent. 4 Legislation is sought in 2014 to shift Perkins Loans to a mandatory credit program. New loan subsidies would be appropriated through a new, separate 

Unsubsidized Perkins Loan program account. Current Perkins Loan program authorization expires September 30, 2014.

Q-6
Q-7

STUDENT FINANCIAL ASSISTANCE

Appropriations History

(dollars in thousands)

Year

Budget

 Estimate

to Congress

House 

Allowance

Senate 

Allowance Appropriation

2005 $14,698,622 $14,755,794 $14,859,694 1 $14,265,749

2006 19,771,798 19,583,752 19,403,795 19,255,404 2

2007 14,490,057 N/A 3 N/A 3 14,487,735 3

2008 16,419,492 17,464,883 18,409,883 18,122,136 4

2009 19,921,551 21,291,136 5,6 20,851,809 5,6 21,246,973 5

Recovery Act 

Supplemental 

(P.L. 111-5)

0 17,600,000 13,930,000 17,314,000

2010 1,801,809 7 19,634,905 19,296,809 1 19,296,809

2011 1,737,957 7 18,475,492 8 24,899,957 1 24,670,517

2012 30,338,016 22,367,521 9 24,670,517 9 24,535,281

2013 24,685,281 24,535,281 10 24,535,281 10 24,685,437 11

2014 24,685,281

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

2 Includes a reapportionment of $28 million that expired at the end of fiscal year 2005. Pursuant to Section 2(c) of 

the National Disaster Student Aid Fairness Act (P.L. 109-86), these funds were made available for an additional fiscal 

year ending September 30, 2006. Reflects a rescission of $131,770 million (P.L. 109-149). Includes $4,300 million in 

mandatory funds to retire the projected funding shortfall. 3 This account operated under a full-year continuing resolution (P.L. 110-5). House and Senate Allowance 

amounts are shown as N/A (Not Available) because neither body passed a separate appropriations bill. 4 Includes $2.011 million in mandatory funding for Pell Grants pursuant to the College Cost Reduction and Access 

Act of 2007 (P.L. 109-084). 5 Includes $2.090 million in mandatory funding for Pell Grants pursuant to the College Cost Reduction and Access 

Act of 2007 (P.L. 109-084). 6 The levels for the House and Senate allowances reflect action on the regular annual 2009 appropriation bill, 

which proceeded in the 110th Congress only through the House Subcommittee and the Senate Committee. 7 Reflects Budget proposal to shift funding for Pell Grants and Perkins Loans to their own, separate accounts. 8 The level for the House allowance reflects the House-passed full-year continuing resolution. 9 The level for the House allowance reflects an introduced bill; the level for the Senate allowance reflects Senate 

Committee action only. 10 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. 11 The amount shown includes the 0.612 percent across-the-board increase provided by P.L. 112-175, in effect 

through March 27, 2013.
Q-8

STUDENT FINANCIAL ASSISTANCE

Significant Items in FY 2013 Appropriations Reports

Federal Work-Study Program

Senate: Report 112-176: The committee recognizes that community service opportunities 

allow students to gain work experience and develop skills that they may be able 

to use in future careers and encourages the Department to bolster these 

opportunities at participating Federal Work-Study institutions. The Committee 

expects the Department to provide the same funding from the Federal WorkStudy program appropriation in fiscal year 2013 as in the prior year for the Work 

Colleges program authorized under section 448 of the HEA.

Response: At the time the Budget was prepared, funding for fiscal year 2013 (which would 

support academic year 2013-14) remained uncertain due to lack of a final 

appropriation, as well as the impact of the sequester, which reduced overall 

funding for the Work-Study program by 5 percent. However, the Department 

considers maintaining its investment in student aid among its highest priorities, 

and will do what it can to maintain the investment made in prior years.
Q-9

Summary of Request Click here for accessible version 

(in thousands of dollars) 2014

Category 2012 2013 President's

Account, Program and Activity Code Appropriation Appropriation Budget Amount Percent

Student Financial Assistance

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

(a) Discretionary Pell grants D 22,824,000 22,824,000 22,824,000 0 0.000%

(b) Mandatory Pell grants M 4,950,000 4,854,184 6,456,000 1,506,000 30.424%

(c) Mandatory funding for discretionary program costs M 13,795,000 7,587,000 588,000 (13,207,000) -95.738%

Subtotal 41,569,000 35,265,184 29,868,000 (11,701,000) -28.148%

Discretionary D 22,824,000 22,824,000 22,824,000 0 0.000%

Mandatory M 18,745,000 12,441,184 7,044,000 (11,701,000) -62.422%

Across-the-board 0.612% increase applied to discretionary appropriation, provided in P.L. 112-175. 139,683

Total, Discretionary 22,824,000 22,963,683 22,824,000 0 0.000%

Federal Pell Grants Information

Discretionary appropriation D 22,824,000 22,824,000 22,824,000 0 0.000%

Prior year surplus/(shortfall) D (1,968,063) 6,378,937 8,525,937 10,494,000 -533.215%

Mandatory appropriation M 4,950,000 4,854,184 6,456,000 1,506,000 30.424%

Prior year surplus/(shortfall) M 276,816 655,816 0 (276,816) -100.000%

Mandatory funding to reduce discretionary need M 13,795,000 7,587,000 588,000 (13,207,000) -95.738%

Total resources 39,877,753 42,299,937 38,393,937 (1,483,816) -3.721%

Discretionary program costs D 28,272,000 28,264,000 28,916,000 644,000 2.278%

Mandatory program costs M 4,571,000 5,510,000 6,456,000 1,885,000 41.238%

Total, program costs 32,843,000 33,774,000 35,372,000 2,529,000 7.700%

Discretionary program current year surplus/(Shortfall) D 6,378,937 8,525,937 3,021,937 (3,357,000) -52.626%

Mandatory current year surplus/(Shortfall) M 655,816 0 0 (655,816) -100.000%

Total, surplus/(shortfall) 7,034,753 8,525,937 3,021,937 (4,012,816) -57.043%

Maximum award (in whole dollars)

Base Award $4,860 $4,860 $4,860 0 0.000%

Mandatory add-on $690 $785 $925 235 34.058%

Total maximum award $5,550 $5,645 $5,785 235 4.234%

Recipients (in thousands) 8,965 9,171 9,373 408 4.551%

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

FY 2013 discretionary appropriation amounts are based on P.L. 112-175, the Continuing Appropriations Resolution, 2013, that provided appropriations through March 27, 2013. FY 2013 mandatory amounts are 

either specifically authorized levels, or are based on FY 2013 President's Budget Policy, updated for more recent estimates of mandatory costs, or FY 2014 President's Budget Policy, as applicable.

Detail may not add to totals due to rounding.

2014 President's Budget 

Compared to 2012 Appropriation
Q-10

(in thousands of dollars) 2014

Category 2012 2013 President's

Account, Program and Activity Code Appropriation Appropriation Budget Amount Percent

Student Financial Assistance (continued)

 2. Campus-based programs:

(a) Federal supplemental educational opportunity grants (HEA IV-A-3) D 734,599 734,599 734,599 0 0.000%

(b) Federal work-study (HEA IV-C) D 976,682 976,682 1,126,682 150,000 15.358%

Subtotal, Campus-based programs 1,711,281 1,711,281 1,861,281 150,000 8.765%

 3. Iraq and Afghanistan service grants (HEA IV-A-10) M 180 248 231 51 28.333%

Across-the-board 0.612% increase applied to discretionary appropriation, provided in P.L. 112-175. 10,473

Total 43,280,461 37,126,869 31,729,512 (11,550,949) -26.689%

Discretionary D 24,535,281 24,685,437 24,685,281 150,000 0.611%

Mandatory M 18,745,180 12,441,432 7,044,231 (11,700,949) -62.421%

Federal Perkins Loan Program 1

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

 2. New net loan subsidies (non-add) M 0 0 (1,408,498) (1,408,498) ---

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

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

FY 2013 discretionary appropriation amounts are based on P.L. 112-175, the Continuing Appropriations Resolution, 2013, that provided appropriations through March 27, 2013. FY 2013 mandatory amounts are 

either specifically authorized levels, or are based on FY 2013 President's Budget Policy, updated for more recent estimates of mandatory costs, or FY 2014 President's Budget Policy, as applicable.

Detail may not add to totals due to rounding.

1 Negative outlays are deposited in designated receipt accounts and are shown in General Fund Receipts.

2014 President's Budget 

Compared to 2012 Appropriation
Q-11

STUDENT FINANCIAL ASSISTANCE

Summary of Request

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

advantage has slipped. While the U.S. ranks 5th in terms of the proportion of 25-64 year olds 

with a postsecondary education, it ranks 14th in attainment among those aged 25-34. There is 

an opportunity gap as well. Today, high-school graduates from the wealthiest families are 

virtually certain to continue on to higher education, while just over half of the bottom quartile

attend. Even when high-school graduates can afford to begin higher education, they all too 

often fail to complete postsecondary education. Only about six in ten college students at 4-year 

schools graduate within 6 years; for low-income students, the completion rate in the same time 

period is closer to 25 percent.

The President’s fiscal year 2014 Budget focuses on college affordability and completion, in 

accordance with the President’s vision of leading the world in college attainment by 2020. The 

Budget outlines a path for reforming campus-based aid programs to promote the interest of 

students by distributing Federal funds to colleges that provide the best value to students – not 

only by enrolling financially-needy students, but ensuring they persist to completion and at 

reasonable costs.

The total fiscal year 2014 Budget proposed for the Student Financial Assistance (SFA) account 

is $37.1 billion, of which the discretionary request is $24.7 billion, $150 million higher than the

fiscal year 2013 level. This discretionary request includes $22.8 billion for Pell grants, with the 

remainder of the request for the campus-based programs: Supplemental Educational 

Opportunity Grants and Work-Study. $7.0 billion in mandatory funds are included in the 2014

Budget for the Pell Grant program, of which $588 million is directed to reduce discretionary 

program costs. An additional $231,000 in mandatory funding will support grants under the Iraq 

and Afghanistan Service Grants program.

Supplementing the SFA grant funds described above, the 2014 Budget provides access to 

additional campus-based funds that will assist students in paying for their education, through an 

expanded Federal Perkins Loan program. This reform of the current program, which is set to 

expire in 2014, will ensure students have continuous access to Perkins loans through that 

transition. Restructuring the program means an increased number of students will be able to 

access Perkins Loan funds, as the program will expand to serve a greater number of institutions 

(up to 2,700 more than the existing program), and 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 

almost $38.5 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.) Taken together, these programs would provide student aid awards to 

nearly 12.2 million students.

The fiscal year 2014 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 

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 beginning on page P-1.
Q-12

STUDENT FINANCIAL ASSISTANCE

Federal Pell grants

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

(dollars in thousands)

FY 2014 Authorization: Indefinite

Budget Authority:

1

Pell program funding source

2012 2013 2014

 Change

 from 2013

Program funds:

Discretionary appropriation2 $22,824,000 $22,824,000 $22,824,000 0

Mandatory appropriation 4,950,000 4,854,184 6,456,000 +$1,601,816

Mandatory funding for

discretionary program costs 13,795,000 7,587,000 588,000 -6,999,000

Subtotal, current year funding2 41,569,000 35,265,184 29,868,0003 -5,397,184

Pell Grant program costs2 32,843,000 33,774,000 35,372,000 +1,598,000

1 Table reflects appropriations and mandatory budget authority in support of program costs for each fiscal year. 2 The change from 2012 to 2014 in the Pell discretionary appropriation, Pell current year funding subtotal, and 

Pell Grant program costs is 0, -$11,701,000 thousand, and +$2,529,000 thousand, respectively. 3 Excludes 0.612 percent across-the-board increase provided in P.L. 112-175.

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 for lowincome adults now in the workplace to return to school to upgrade their skills.

The Department provides funds to participating institutions to pay 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 generally 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 

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

award year or at the beginning and mid-point for programs without terms.
Q-13

STUDENT FINANCIAL ASSISTANCE

Federal Pell grants

Budget authority in the Pell Grant program is available for 2 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 

2014 would be used for grants in the 2014-2015 award year, which runs from July 1, 2014, 

through June 30, 2015. 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 to seek higher education and successfully complete a postsecondary 

credential. Thanks to the landmark investments in Pell Grants since the beginning of the 

Administration, in 2014 nearly 9.4 million students will receive Pell Grants worth up to $5,785. 

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.

Recent efforts to address program cost issues include the Consolidated Appropriations Act,

2012, which made several statutory changes to the Pell Grant program that were estimated to 

produce a savings of more than $750 million in fiscal year 2013. These changes, which

became effective on July 1, 2012, include: 

• Changing the EFC determination by decreasing the income threshold at which students 

receive an automatic zero EFC from $32,000 to $23,000;

• Restricting Pell eligibility to individuals who have a high school diploma, GED, or are 

home schooled, and denying eligibility to those students who previously would have 

qualified by passing an “Ability to Benefit” test (students enrolled prior to July 1, 2012 are 

grandfathered in);

• Reducing the maximum duration for which students are eligible for Pell Grants from 18 

full-time semesters, or its equivalent, to 12 semesters, or its equivalent; and, 

• Requiring students be eligible for 10 percent of the maximum grant (previously was 5 

percent) to earn the minimum award.

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 2013-2014 award year level of $5,645 to $5,785 for the 2014-

2015 award year, as a result of the CPI provision.
Q-14

STUDENT FINANCIAL ASSISTANCE

Federal Pell grants

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 cost of the program for that year, regardless of 

the amount actually appropriated. In years where 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, in 

years where 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 §302 of the Congressional Budget Act. Like the 2013 Budget, this Budget maintains this 

treatment.

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. The CCRAA made a number of changes to the need 

analysis rules that have the effect of broadening program eligibility and increasing program cost.

Institutional participation: Approximately 5,400 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.

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 27 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). Less than full-time students are eligible for pro rata 

awards based on their enrollment status.
Q-15

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) 2012-2013, the minimum is 

$555. Students who do not qualify for the 10 percent minimum grant do not receive a Pell 

award. Appropriations acts routinely set annual maximum award levels. The fiscal year 2013

appropriation act set the maximum award supported by discretionary funds for the 2013-2014

award year at $4,860; the total maximum Pell Grant amounts to $5,645 for the 2013-2014 

award year as a result of the CPI provision established by the SAFRA. The total 2014-2015

maximum award is projected to be $5,785.

The aggregate Pell Grant award is the lessor 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:

• the actual amount charged by the institution for room and board for students 

living at school,

• an amount determined by the institution for students without dependents living at 

home with parents, and

• 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.
Q-16

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 2013-14, 

these payments will total $46 million.
Q-17

STUDENT FINANCIAL ASSISTANCE

Federal Pell grants

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

annual expenditures. Funding levels for the past 5 fiscal years were:

(dollars in thousands)

2009........................................ $17,288,000 1

Recovery Act .......................... 17,114,000 2

2010........................................ 22,794,816 3

2011........................................ 42,015,996 4

2012........................................ 41,569,000 5

2013........................................ 35,265,184 6

1 Includes $2,090 million in mandatory funds to increase maximum award by $490.

2 Includes $15,640 million in discretionary funds and $643 million in mandatory funds. 3 Includes $5,300 million in mandatory funds to increase maximum award by $690. 4 Includes $5,560 million in mandatory funds to increase maximum award by $690 and $13,500 million in SAFRA 

funds.

5 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.

6 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. Excludes the 0.612 percent acrossthe-board increase provided in P.L. 112-175.

FY 2014 BUDGET REQUEST

Since taking office, this Administration has repeatedly fought for higher Pell Grant funding, and 

its efforts have helped to generate another increase in the maximum award, and to provide 

grants to an additional 3 million students. In its continued support of the program, the 

Administration requests $22.8 billion in discretionary funding, the same level as 2013. This 

discretionary request, plus $7.0 billion in mandatory funding, establishes the total 2013 Pell 

funding level at $29.9 billion. The mandatory request includes $588 million to cover the 

program costs associated with maintaining the $4,860 base maximum award in the 2014-15

award year, and $6.5 billion to support a vital increase in the add-on to the base award, raising 

the new discretionary plus mandatory maximum award to $5,785.

In addition, the 2014 Budget proposes a series of reforms to the student loan programs, which 

are described in the Student Aid Overview and Student Loans Overview, beginning on 

pages P-1 and S-1, respectively. Savings resulting from these reforms will be redirected to the 

Pell Grant program, which, when added to surplus Pell Grant discretionary budget authority

from the prior year, are sufficient to fund the program through the 2015-2016 award year, 

averting an otherwise $3.3 billion shortfall. The Administration believes preemptory action must 

be taken to keep the Pell Grant program on a sound footing, and that reforms such as those 

included in the Budget are necessary to maintain this critical investment in opening the doors of 

opportunity to all Americans and strengthening our Nation’s competitiveness. To ensure the 

program remains on a solid financial footing for the 2015-2016 award year, the 2014 Budget 

proposes two reforms in the student loan programs: expanding and reforming the Perkins Loan 

program; and, reducing excessive payments to guaranty agencies that rehabilitate defaulted 

student loans. These important reforms will help ensure that aid remains available to the 

neediest college students.
Q-18

STUDENT FINANCIAL ASSISTANCE

Federal Pell grants

The fiscal year 2014 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 are discussed in the Student Aid Overview

beginning on page P-1.

PELL GRANT PROGRAM HISTORICAL DATA

Applicant and Recipient Growth: The graphs on the following pages show applicant, recipient, 

and aid available trends since the inception of the Pell Grant program. Applicants are estimated 

at 18.3 million for award year 2012-2013; recipients at 9.0 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.

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

funding levels.

Federal Pell Grants Applicant Trends

Award Year Valid Applicants

Applicant 

Growth: 

Number

Applicant 

Growth:

Percent Change

2000-01 8,745,584 218,422 2.56%

2001-02 9,505,099 759,515 8.68%

2002-03 10,354,525 849,426 8.94%

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 18,259,819 -198,882 -1.08%

2013-14 18,316,668 56,849 0.31%

2014-15 18,658,404 341,736 1.87%

Sources: Through 2011-12, Award Year 2010-11 Pell Grant EOY Report and Final ELI-10 

Reports.

Notes: Award Years 2012-13 through 2014-15 are estimates. A valid applicant is an 

undergraduate student who submits an application with sufficient data to calculate an EFC and 

determine Pell grant eligibility.
Q-19

STUDENT FINANCIAL ASSISTANCE

Federal Pell grants

1 Applicants reflect those applying for all Federal student financial assistance, including those receiving only nonneed based student loans.

Number of Recipients: Under current estimates, the 2014 level would support Pell Grant 

awards to 9.4 million recipients.

*

Applicants1

Pell Recipients
Q-20

STUDENT FINANCIAL ASSISTANCE

Federal Pell grants

Aid Available: Under current estimates, the Department’s fiscal year 2014 proposal would 

provide $35.3 billion in Pell Grants to students.

Maximum award: The Department proposes to maintain the base maximum award at $4,860 

for award year 2014-15 through discretionary and mandatory funding. The costs of providing a 

$5,645 maximum award (and in award year 2014-2015, a $5,785 maximum award) that exceed 

the costs of providing a $4,860 maximum will be covered by permanent mandatory indefinite 

funding as provided through HCERA.

Award 

Year

Maximum 

Award

Aid Available 

(dollars in millions) Recipients

2009-10 $5,350 $29,962 8,089,702

2010-11 5,550 35,666 9,305,091

2011-12 5,550 33,516 9,438,939

2012-13 5,550 32,798 8,965,000

2013-14 5,645 33,728 9,171,000

2014-15 5,785 35,325 9,373,000

$ in Billions
Q-21

STUDENT FINANCIAL ASSISTANCE

Federal Pell grants

Maximum Pell Grant Awards

FY Maximum 

Award

Budget Authority

(dollars in thousands)

Program Costs

(dollars in thousands)

2005 $4,050 $12,364,997 $12,696,000

2006 4,050 17,345,230 12,823,000

2007 4,310 13,660,711 14,700,000

2008 4,731 16,245,000 1 18,315,000

2009 5,350 35,661,000 2 30,002,000

2010 5,550 22,794,816 3 35,713,000

2011

2012

5,550

5,550

42,015,996 4

41,569,000 6

33,563,000 5

32,843,000 5

2013 5,645 35,265,148 7 33,774,000 5

2014 5,785 29,868,000 8 35,372,000 5

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 

(ARRA) funds, and $2,733 million in mandatory funds for use as an add-on to the maximum Pell Grant award.

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

funds to increase the maximum grant. 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 grant. 5 Estimate.

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

funding to increase the maximum grant, and $13,795 million in mandatory funds to reduce discretionary need as

provided in the Budget Control Act of 2011. 7 Budget Authority requested for FY 2013 includes $22,824 million in discretionary funding, $4,854 million in 

mandatory funding to increase the maximum grant, and $7,587 million in mandatory funds for discretionary purposes. 8 Budget Authority requested for FY 2014 includes $22,824 million in discretionary funding, $6,456 million in 

mandatory funding to increase the maximum grant, and $588 million in mandatory funds for discretionary purposes.
Q-22

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 2011-12, approximately 74 percent of all Pell Grant 

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

Distribution of Pell Grants in 2011-2012

Income Level Recipients Available Aid Average 

Award

Dependent:

0 - $ 6,000 539,250 $2,304,745,497 $4,274

$6,001 - $ 9,000 146,580 639,867,704 4,365

$9,001 - $20,000 850,757 3,733,578,484 4,389

$20,001 - $30,000 797,489 3,485,146,515 4,370

$30,001 + 1,522,713 4,219,024,363 2,771

Subtotal -

Dependent 3,856,789 14,382,362,563 3,729

Subtotal Independent 5,582,149 19,133,612,428 3,428

TOTAL 9,438,938 33,515,974,991 3,551

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 2011-2012

Income Level Recipients Available Aid Average 

Award

0 - $ 1,000 1,035,673 $3,855,090,371 $3,722

$1,001 - $ 3,000 297,254 1,127,476,625 3,793

$3,001 - $ 6,000 435,516 1,656,453,151 3,803

$6,001 - $ 9,000 476,206 1,823,249,303 3,829

$9,001 - $15,000 995,116 3,510,109,610 3,527

$15,001 - $20,000 684,141 2,033,620,565 2,973

$20,001 - $30,000 761,973 2,535,349,600 3,327

$30,001 + 896,270 2,592,263,203 2,892

TOTAL 5,582,149 19,133,612,428 3,428
Q-23

STUDENT FINANCIAL ASSISTANCE

Federal Pell grants

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 2011-2012, approximately 29 percent of the total aid available for Pell Grants 

went to students attending Public 4-Year schools, and approximately 35 percent went to 

students attending Public 2-Year schools.

Over the last 15 years, the grant distribution has changed most noticeably with proprietary 

schools. In the 1996-1997 award year approximately 12.5 percent of total Pell aid available 

went to students at proprietary institutions; in the 2011-2012 award year that figure was 22

percent.

Distribution of Pell Grants by Type of Institution 2011-2012

Institution 

Type Recipients Available Aid

Average 

Award

Percent of 

Pell Aid

Public 4-Year 2,753,148 $9,852,944,216 $3,579 29.4%

Public 2-Year 3,428,942 11,781,972,629 3,436 35.2%

Private 1,187,415 4,537,309,901 3,821 13.5%

Proprietary 2,069,435 7,343,748,245 3,549 21.9%

TOTAL 9,438,938 33,515,974,991 3,551 100.0%
Q-24

STUDENT FINANCIAL ASSISTANCE

Federal Pell grants

The following two charts show for the years 1997-2011 total Pell recipients (in thousands) by 

type and control of institution, and the institutional share (percentage) of total Pell recipients.

Thousands
Q-25

STUDENT FINANCIAL ASSISTANCE

Federal Pell grants

PROGRAM OUTPUT MEASURES (dollars in thousands)

Program output measures 2012 2013 2014

Recipients 8,965,000 9,171,000 9,373,000

Aid available to students 1 $32,798,175 $33,728,145 $35,325,135

Maximum grant (in whole dollars) $5,550 $5,645 $5,785

Minimum grant (in whole dollars) $555 $555 $555

Average grant (in whole dollars) $3,658 $3,678 $3,769

NOTE: 2013 excludes 0.612 percent across-the-board increase provided in P.L. 112-175.

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

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 2014 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.
Q-26

STUDENT FINANCIAL ASSISTANCE

Federal supplemental educational opportunity grants

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

(dollars in thousands)

FY 2014 Authorization: Indefinite

Budget Authority:

SEOG budget authority

2012 2013 2014

Change

from 2012

$734,599 $734,599 $734,5991 0

1 Excludes 0.612 percent across-the-board increase provided in P.L. 112-175.

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 for this purpose 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 SEOG program is a 2-year funded program. 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 2014 would be used 

for the 2014-2015 award year, which runs from July 1, 2014, through June 30, 2015.

Institutional participation: Roughly 3,800 postsecondary institutions receive funds under the 

SEOG program. As mandated by statute, 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 provisions grossly distort the allocation of 

funding among institutions than would otherwise be the case, preventing a more equitable 

distribution of funds to institutions based on student need.

Institutional matching: Participating institutions are required by statute to contribute at least 25 

percent of the SEOG award amounts. In other words, the institution provides one dollar for 

every three Federal dollars. 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 a statutory need analysis system. By statute, institutions must give first priority for
Q-27

STUDENT FINANCIAL ASSISTANCE

Federal supplemental educational opportunity grants

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

family contribution at the institution) who are also Pell Grant recipients. Remaining awards are 

then available for students with exceptional need who are not Pell Grant recipients. 

Approximately 9 percent of undergraduates receive SEOG awards.

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 students 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. Students 

must also have: (1) a high school diploma (or its equivalent), or, (2) for students enrolled prior to 

July 1, 2012, a demonstrated ability to benefit from the training offered by the institution (as 

shown by a passing score on a test approved by the Department), or, (3) have successfully 

completed six credits. A student already in default on a loan made under any Title IV, HEA loan 

program, however, 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.

Institutional administrative provisions:

• 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.

• Transferability of funds. An institution may transfer up to 25 percent of its allotment 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 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.
Q-28

STUDENT FINANCIAL ASSISTANCE

Federal supplemental educational opportunity grants

Funding levels for the past 5 fiscal years were:

(dollars in thousands)

2009........................................ $757,465

2010........................................ 757,465

2011........................................ 735,990

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

2013........................................ 734,5991

1 Excludes 0.612 percent across-the-board increase provided in P.L. 112-175.

FY 2014 BUDGET REQUEST

The Administration requests $734.6 million for the SEOG program in fiscal year 2014, levelfunded with the amount provided in fiscal year 2012. The Budget additionally proposes to alter 

the allocation formula. Lower-priced public and private institutions that enroll and graduate 

higher numbers of Pell-eligible students and restrain tuition increases would benefit the most by 

this change. Allocations to participating institutions that fail to maintain these commitments 

would be redirected to better-performing institutions.

The fiscal year 2014 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

beginning on page P-1.

The fiscal year 2014 request, in conjunction with institutional matching funds, would generate 

$982 million in available aid for an estimated 1.6 million awards.

PROGRAM OUTPUT MEASURES (dollars in thousands)

Program output measures 2012 2013 2014

Recipients 1,583,862 1,583,862 1,583,862

Aid available to students 1 $981,994 $981,994 $981,994

Average award (whole dollars) $620 $620 $620

NOTE: 2013 excludes 0.612 percent across-the-board increase provided in P.L. 112-175. 1 Aid available includes budget authority, institutional matching funds, transfers from Perkins Loans and Federal 

Work-Study, minus administrative costs.

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
Q-29

STUDENT FINANCIAL ASSISTANCE

Federal supplemental educational opportunity grants

2014 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, the performance measures, strategies, and program improvement activities 

that apply to all of the programs are discussed in the Student Aid Overview and are not 

repeated here.

Distribution of SEOG 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) show the distribution of SEOG funds to dependent and independent 

students at various income levels in 2010-2011. In 2010-2011, 64 percent of dependent SEOG 

recipients had family income levels under $30,000 and nearly 78 percent of independent SEOG 

recipients had family income levels under $20,000.

Distribution of SEOG in 2010-2011

Income Level Recipients Available Aid Average 

Award

Dependent:

0 - $ 5,999 91,018 $68,802,064 $756

$6,000 - $11,999 66,563 51,276,318 770

$12,000 - $23,999 193,484 154,715,721 800

$24,000 - $29,999 102,297 83,222,058 814

$30,000 + 259,888 222,349,323 856

Subtotal –

 Dependent 713,250 580,365,484 814

Independent 920,150 432,242,621 470

TOTAL 1,633,400 1,012,608,105 620
Q-30

STUDENT FINANCIAL ASSISTANCE

Federal supplemental educational opportunity grants

Distribution of SEOG to Independent Undergraduates in 2010-2011

Income Level Recipients Available Aid Average Award

0 - $ 1,999 234,511 $115,818,483 $494

$2,000 - $ 3,999 68,829 34,349,159 499

$4,000 - $ 7,999 138,757 67,731,085 488

$8,000 - $11,999 109,928 50,759,402 462

$12,000 - $15,999 92,003 41,110,374 447

$16,000 - $19,999 74,883 33,152,520 443

$20,000 + 201,239 89,321,598 444

TOTAL 920,150 432,242,621 470

Distribution of SEOG Funds by Type of Institution:

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

formula. The distribution of SEOG among different types of institutions has remained relatively 

constant over time due to this formula and the base guarantee, with the majority of funding 

going to students attending public institutions. The distribution of aid by institutional type has 

remained relatively constant over the last 5 years; proprietary institutions have seen the most 

growth in their share, but despite growing enrollments, their share has grown by only 3.3

percentage points over that time.

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

institutions in 2010-2011.

Distribution of SEOG by Type of Institution 2010-2011

Institution Type Recipients Available Aid Average 

Award

Percent of 

SEOG Aid

Public 4-Year 426,091 $312,765,279 $734 30.9%

Public 2-Year 343,729 144,349,375 420 14.3%

Private 355,537 377,696,781 1,062 37.3%

Proprietary 508,043 177,796,670 350 17.6%

TOTAL 1,633,400 1,012,608,105 620 100.0% 

Note: Percents may not total to 100% due to rounding.
Q-31

STUDENT FINANCIAL ASSISTANCE

Federal work-study

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

(dollars in thousands)

FY 2014 Authorization: Indefinite

Budget Authority:

Work-study budget 

authority 2012 2013 2014

Change

from 2012

$976,682 $976,682 $1,126,6821 +$150,000

1 Excludes 0.612 percent across-the-board increase provided in P.L. 112-175.

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 for this purpose are distributed to 

qualifying institutions whose financial aid administrators select qualified needy students for 

employment. Students may be employed by the institution itself; 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 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 2014 would 

be used for the 2014-2015 award year, which runs from July 1, 2014 through June 30, 2015.

Institutional participation: Roughly 3,400 institutions participate in the Work-Study program. As 

mandated by statute, funds are distributed to institutions first on the basis of the institution's 

fiscal year 1999 Work-Study program base guarantee and pro rata share, and then on the basis 

of 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.

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
Q-32

STUDENT FINANCIAL ASSISTANCE

Federal work-study

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.

Employment at the school itself is not eligible for the 90 percent match. In addition, the 

Secretary may authorize through regulations a Federal share in excess of 75 percent based on 

the determination that it is necessary for the advancement of the program.

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

of Work-Study activities, as described below:

• 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 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 not more than 10 percent, or 

$50,000, of its Work-Study allocation, for the administrative expenses associated with 

the establishment or expansion of a Job Location and Development (JLD) program, 

which 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
Q-33

STUDENT FINANCIAL ASSISTANCE

Federal work-study

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, and Perkins Federal Capital Contribution 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 the SEOG, Work-Study, and Perkins Loan 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 

Work-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 HEOA added a provision under which an eligible institution located in an 

area affected by a major disaster, as determined by the Secretary, may make WorkStudy payments to disaster-affected students, for the period of time (not to exceed one 

academic year) in which the students were prevented from fulfilling their Work-Study 

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.

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

under the general 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, and must also have 

a high school diploma (or its equivalent) or, for students enrolled prior to July 1, 2012, a 

demonstrated ability to benefit from the training offered by the institution (as shown by a passing 

score on a test approved by the Department or have successfully completed six credits).
Q-34

STUDENT FINANCIAL ASSISTANCE

Federal work-study

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, however, 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.

The ARRA included $200 million in funding for the Work-Study program. These funds were 

used to augment the normal Work-Study allocation to schools for the 2009-2010 academic year.

Funding levels for the past 5 fiscal years were:

(dollars in thousands)

2009 ......................................... $980,492

Recovery Act ............................ 200,000

2010 ......................................... 980,492

2011 ......................................... 978,531

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

2013 ......................................... 976,6821

1 Excludes 0.612 percent across-the-board increase provided in P.L. 112-175.

FY 2014 BUDGET REQUEST

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

Work-Study allocation formula to target and incent funding toward institutions that enroll and 

graduate relatively higher numbers of Pell-eligible students as well as offer lower tuition prices 

and fees (net price) and/or contain growth in tuition and fees.

The fiscal year 2014 budget requests $1.13 billion for the Work-Study program, $150 million 

above the fiscal year 2012 level. This additional request would provide Federal Work-Study 

funding to institutions opting to participate in an enhanced Work-Study partnership with 

prospective employers, with the goal of doubling the number of students participating over 5

years. To increase students’ employment prospects, institutions would collaborate with 

employers to provide students with Work-Study jobs that are meaningfully aligned with students’ 

academic programs and career aspirations. The request will generate nearly $1.35 billion in 

available aid to support more than 809,000 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 2014 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, policy 

proposals are discussed in greater detail in the Student Aid Overview beginning on page P-1.
Q-35

STUDENT FINANCIAL ASSISTANCE

Federal work-study

PROGRAM OUTPUT MEASURES (dollars in thousands)

Program output measures 2012 2013 2014

Recipients 696,612 696,612 809,125

Aid available to students 1 $1,161,950 $1,161,950 $1,349,620

Average award (whole dollars) $1,668 $1,668 $1,668

NOTE: 2013 excludes 0.612 percent across-the-board increase provided in P.L. 112-175. 1 Aid available includes budget authority and employer-matching funds, minus administrative costs, transfers to 

SEOG, or reservations of funds for the next year.

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

2014 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, the performance measures, strategies, and program improvement activities 

that apply to all of the programs are discussed in the Student Aid Overview and are not 

repeated here.
Q-36

STUDENT FINANCIAL ASSISTANCE

Federal work-study

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 2010-2011.

Distribution of Work-Study in 2010-2011

Income Level Recipients Available Aid Average 

Award

Dependent:

0 - $ 5,999 32,287 $52,246,666 $1,618

$6,000 - $11,999 24,053 39,782,880 1,654

$12,000 - $23,999 71,203 116,849,370 1,641

$24,000 - $29,999 39,220 63,932,077 1,630

$30,000 + 368,463 541,481,405 1,470

Subtotal - Dependent 535,226 814,292,398 1,521

Independent:

Undergraduate 129,341 248,457,115 1,921

Graduate 53,860 135,458,944 2,515

TOTAL 718,427 1,198,208,457 1,668

Distribution of Work-Study to Independent Undergraduates in 2010-2011

Income Level Recipients Available Aid Average 

Award

0 - $ 1,999 37,028 $69,371,116 $1,873

$2,000 - $ 3,999 13,673 25,722,928 1,881

$4,000 - $ 7,999 23,190 46,288,757 1,996

$8,000 - $11,999 16,500 33,440,786 2,027

$12,000 - $15,999 11,026 21,608,100 1,960

$16,000 - $19,999 7,651 14,234,600 1,860

$20,000 + 20,273 37,790,828 1,864

TOTAL 129,341 248,457,115 1,921
Q-37

STUDENT FINANCIAL ASSISTANCE

Federal work-study

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 distribution formula. As a result, the distribution of WorkStudy assistance among different types of institutions has remained relatively constant over 

time, varying by no greater than plus or minus 1.4 percent for each category over the last 5 

years. The table below shows the distribution of Work-Study to students attending different 

types of institutions in 2010-2011.

Distribution of Work-Study by Type of Institution 2010-2011

Institution Type Recipients Available Aid Average 

Award

Percent of WorkStudy Aid 

Public 4-Year 233,393 $412,452,697 $1,767 34.4%

Public 2-Year 79,545 151,417,534 1,904 12.6%

Private 377,236 567,136,816 1,503 47.3%

Proprietary 28,253 67,201,410 2,379 5.6%

TOTAL 718,427 1,198,208,457 1,668 100.0% 

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, 15 percent of Work-Study funds are used for 

community service.

Participating colleges and universities are to ensure that at least one 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.
Q-38

STUDENT FINANCIAL ASSISTANCE

Federal work-study

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 2010-2011.

Distribution of Work-Study to Students in Community Service Activities in 2010-2011

Type of Institution Recipients Available Aid Average 

Award

Public 4-Year 44,501 $80,669,919 $1,813

Public 2-Year 14,447 28,010,200 1,939

Private 63,388 91,876,915 1,449

Proprietary 5,363 12,917,722 2,409

TOTAL 127,699 213,474,756 1,672
Q-39

STUDENT FINANCIAL ASSISTANCE

Federal Perkins loans

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

(dollars in thousands)

FY 2014 Authorization: (Legislation sought)

Budget Authority:

Perkins loans budget authority

2012 2013 2014

Change

from 2013

Federal Perkins loans: 

(a) Capital contributions 0 0 0 0

(b) Loan cancellations 0 0 0 0

New loan subsidies 1 0 0 -$1,408,498 -$1,408,498

Perkins Total Net Subsidy 0 0 -1,408,498 -1,408,498

1 Legislation is sought for 2014 to shift Perkins Loans to a mandatory credit program. (Institutions would continue 

to be compensated for Perkins Loan cancellations, but from Federal collections on outstanding Perkins Loans rather 

than discretionary appropriations.) New loan subsidies, which 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) newly appropriated 

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.

The funding for the Perkins Loan 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. The Administration’s 2014 Budget proposes 

new legislation to modernize and expand the Perkins Loan program as a mandatory credit 

program to replace the current program as of July 1, 2014. Funds available in fiscal year 2014

would be used for the 2014-2015 award year, which runs from July 1, 2014 to June 30, 2015. 

The authority for schools to make loans with their current institutional resources will expire at the 

end of fiscal year 2014. Starting in 2016, the remaining funds will revert to the Federal 

Government.

Institutional participation: Roughly 1,700 postsecondary institutions make loans under the 

current Perkins Loan program. As mandated by statute, funds are distributed to institutions first 
Q-40

STUDENT FINANCIAL ASSISTANCE

Federal Perkins loans

on the basis of the institution's fiscal year 1999 Perkins Loan program FCC base guarantee and 

pro rata share, and, secondly, on the basis of the aggregate need of the eligible students in 

attendance. 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 institutional matching 

funds.

Default rate provisions: A school’s FCC allocation is reduced to zero when the institution’s 

cohort default rate reaches 25 percent. If a school’s cohort default rate is less than 25 percent, 

it qualifies for the full allocation amount pursuant to the statutory formula. In general, a school’s 

participation in the program is terminated if its default rate exceeds 50 percent for 3 consecutive 

years. As of September 2011, the latest data available, the fiscal year 2009 national cohort 

default rate is 8.8 percent.

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 are estimated to be $1 billion in award year

2012-2013.

• Loan Rehabilitation. Institutions participating in the Perkins Loan program 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 9 consecutive on-time monthly payments to 

the institution. A loan can only be rehabilitated once. 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.

• 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.

• Transferability of funds. An institution may transfer up to 25 percent of its FCC allotment 

from Perkins loans to SEOG or Work-Study, or both.

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

excess funds are reallocated to other institutions based on a statutory formula. If an
Q-41

STUDENT FINANCIAL ASSISTANCE

Federal Perkins loans

institution returns more than 10 percent of its allocation, that institution’s allocation is

reduced by that same amount the next year.

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 is 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.

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 

normally may not exceed 10 years), interest is charged at a 5 percent annual rate. Maximum 

loan amounts were increased by the 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.

Since October 8, 1998 (the date of enactment of the Higher Education Amendments of 1998), 

Perkins loan holders qualify for public service cancellation benefits for service on or after that 

date, regardless of whether these terms were included in their original promissory notes.

In general, the schools’ share of their revolving funds are reimbursed for 100 percent of the 

principal and accrued interest of the loan canceled.

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.
Q-42

STUDENT FINANCIAL ASSISTANCE

Federal Perkins loans

• 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 

low-income communities.

Funding levels for the past 5 fiscal years were as follows:

(dollars in thousands)

Fiscal year Federal Capital 

Contributions1

Loan 

Cancellations

2009 .................................. 0 $67,164

2010 .................................. 0 0

2011 .................................. 0 0

2012 .................................. 0 0

2013 .................................. 0 0

1 Federal Capital Contributions were last funded in fiscal year 2004.

FY 2014 BUDGET PROPOSAL

The Administration proposes to expand and modernize the Perkins Loan program as a 

mandatory credit program. This legislative proposal will not only improve the existing Perkins 

Loan program, it will also replace the current program which, without Congressional 

intervention, will expire at the end of fiscal year 2014, and in which Perkins funds will be recalled 

to the Federal Government in 2016. Consequently, it is critically important that a new and 

reformed Perkins loan program be enacted.

The new Perkins Loan program, when fully implemented, would support $8.5 billion a year in 

new loan volume – eight and a half times the current Perkins volume and expand institutional 

participation by up to an additional 2,700 postsecondary education institutions.

Rather than operating through institutional revolving funds, Perkins Loans will be originated and 

serviced by the Federal Government, beginning July 1, 2014. Under the Administration’s 

proposal, Unsubsidized Perkins Loans would carry the same annually-determined, fixed interest 

rate as that proposed for Unsubsidized Stafford Loans: that is, interest rates would be 

determined based on the then-prevailing 10-year Treasury Note plus an add-on of 293 basis 

points. Loan limits for both undergraduate and graduate students would remain the same as in 

the current Perkins program. To increase loan availability, interest on the loans would accrue 

while students are in school.

In addition, the new Perkins program would include a new formula for allocating Unsubsidized 

Perkins lending authority among institutions of higher education in order to encourage 

institutions to enroll high numbers of Pell-eligible recipients, ensure high levels of program

completion among such recipients, and set responsible tuition policies to control costs imposed 

on students, thereby preventing excessive student indebtedness. Schools will continue to have 

discretion with regard to student eligibility. Existing provisions, such as the institution’s ability to
Q-43

STUDENT FINANCIAL ASSISTANCE

Federal Perkins loans

transfer or reallocate Perkins Loan funds to other campus-based programs – SEOG and WorkStudy – 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 2014 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 beginning on page P-1.

PROGRAM OUTPUT MEASURES

Federal Perkins Loans

20121 20131 20141

Loan recipients 460,576 460,576 460,576

Loan volume2 (dollars in thousands) $981,994 $981,994 $981,994

Average loan (whole dollars) $1,860 $1,860 $1,860

Participating Institutions 1,700 1,700 1,700

Unsubsidized Perkins Loans (proposed)

2012 2013 2014

Loan recipients — — 751,173

Loan volume (dollars in thousands) — — $4,113,423

Average loan (whole dollars) — — $5,476

Participating Institutions — — 4,4003

1 Each participating institution uses its revolving fund to continue originating new loans.

2 Loan volume includes budget authority and institutional matching funds minus administrative costs. 3 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

2014 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, the performance measures, strategies, and program improvement activities
Q-44

STUDENT FINANCIAL ASSISTANCE

Federal Perkins loans

that apply to all of the programs are discussed in the Student Aid Overview and are 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 2010-2011.

Distribution of Perkins in 2010-2011

Income Level Recipients Available Aid Average 

Loan

Dependent:

0 - $ 5,999 16,303 $28,120,551 $1,725

$6,000 - $11,999 12,893 21,966,098 1,704

$12,000 - $23,999 39,402 66,769,288 1,695

$24,000 - $29,999 23,453 39,284,728 1,675

$30,000 + 213,614 363,125,917 1,689

Subtotal – Dependent 305,665 519,266,582 1, 695

Independent:

Undergraduate 93,135 155,074,694 1,665

Graduate 61,776 182,447,783 2,953

TOTAL 460,576 856,789,059 1,860

Distribution of Perkins to Independent Undergraduates in 2010-2011

Income Level Recipients Available Aid Average 

Loan

0 - $ 1,999 21,062 $35,476,296 $1,684

$2,000 - $ 3,999 7,083 11,943,604 1,686

$4,000 - $ 7,999 13,289 22,524,931 1,695

$8,000 - $11,999 10,955 18,223,521 1,663

$12,000 - $15,999 8,496 14,130,225 1,663

$16,000 - $19,999 6,582 10,900,393 1,656

$20,000 + 25,668 41,875,724 1,631

TOTAL 93,135 155,074,694 1,665
Q-45

STUDENT FINANCIAL ASSISTANCE

Federal Perkins loans

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. The distribution of Perkins Loan assistance 

among different types of institutions has remained relatively constant over time, varying by no 

greater than plus or minus 5.2 percent for each category over the last 5 years.

The table below illustrates the sector distribution of Perkins loans to students in 2010-2011:

Distribution of Perkins by Type of Institution 2010-2011

Institution Type Recipients Available Aid Average Loan Percent of 

Perkins Aid

Public 4-Year 225,748 $381,505,628 $1,690 44.5%

Public 2-Year 3,412 6,365,980 1,866 0.7%

Private 212,215 448,589,990 2,114 52.4%

Proprietary 19,201 20,327,461 1,059 2.4%

TOTAL 460,576 856,789,059 1,860 100.0%

Note: Percents may not total to 100% due to rounding.
Q-46

STUDENT FINANCIAL ASSISTANCE

Iraq and Afghanistan service grants

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

(dollars in thousands)

FY 2014 Authorization: Indefinite

Budget Authority:

Iraq and Afghanistan 

service grants budget 

authority 2012 2013 2014

Change

from 2013

$180 $248 $231 -$17

PROGRAM DESCRIPTION

The Iraq and Afghanistan Service Grants program, which became effective on July 1, 2010, will 

provide non-need-based grants for 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 projected 

to be $5,785 for the 2014-2015 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.

Funding levels for the past 5 fiscal years were as follows:

(dollars in thousands)

2009 ............................................... 0

2010 ............................................... $15

2011 ............................................... 183

2012 ............................................... 180

2013 ............................................... 248

FY 2014 BUDGET PROPOSAL

The Administration’s 2014 budget includes mandatory funding for Iraq and Afghanistan Service 

Grants in the amount of $231,000, a decrease of $17,000 from fiscal year 2013. The first 

Service Grants were made in award year 2010-2011. Fewer than 1,000 awards are expected to 

be made with fiscal year 2014 funds during academic year 2014-2015.
Q-47

STUDENT FINANCIAL ASSISTANCE

Iraq and Afghanistan service grants

PROGRAM OUTPUT MEASURES

Program output measures 2012 2013 2014

Recipients 1 1 1

Aid Available to students (dollars in thousands) $257 $225 $268

Maximum grant (whole dollars) $5,550 $5,645 $5,785

Average grant (whole dollars) $4,759 $4,884 $4,963

1 Recipients estimated to number fewer than 1,000.

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

2014 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 2010-2011, which was, 

it is important to note, the first year the program awarded grants to students.

Distribution of IASG by Type of Institution 2011-2012

Institution Type Recipients Available Aid Average Loan Percent of IASG Aid

Public 4-Year 26 $132,506 $5,096 75.0%

Public 2-Year 3 5,266 1,755 3.0%

Private 6 27,750 4,625 15.7%

Proprietary 2 11,100 5,550 6.3%

TOTAL 37 176,622 4,774 100.0%

Note: Percents may not total to 100% due to rounding.