Department of Education

STUDENT FINANCIAL ASSISTANCE

Fiscal Year 2016 Budget Request

CONTENTS

Page

Appropriations Language .................................................................................................. P-1

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

Appropriation, Adjustments and Transfers ........................................................................ P-3

Summary of Changes ....................................................................................................... P-4

Authorizing Legislation...................................................................................................... P-5

Appropriations History....................................................................................................... P-7

Significant Items in FY 2015 Appropriations Reports......................................................... P-8

Summary of Request ........................................................................................................ P-9

Federal Pell grants ........................................................................................................ P-12

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

Federal work-study........................................................................................................ P-31

Federal Perkins loans.................................................................................................... P-38

Iraq and Afghanistan service grants............................................................................... P-45
STUDENT FINANCIAL ASSISTANCE

Appropriations Language

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

[$24,486,210,000,] $24,198,210,000 which shall remain available through September 30, [2016] 

2017:

1 Provided, That, of amounts provided under this heading, $2,124,056,000 shall also be 

available for Pell Grants for award year 2017-2018.

2

The maximum Pell Grant for which a student shall be eligible during award year [2015-2016]

2016-20173 shall be $4,860. (Department of Education Appropriations Act, 2015).

NOTE

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

Provisions and Changes document which follows the appropriation language.

P-1
STUDENT FINANCIAL ASSISTANCE

Analysis of Language Provisions and Changes

Language Provision Explanation

1 ... which shall remain available through 

September 30, [2016] 2017:

This language sets the availability of funds 

provided under the account through the end of 

fiscal year 2017. It also removes Subpart 10, 

which refers to the Iraq and Afghanistan Service 

Grant program, which the 2016 President’s Budget 

proposes to end and consolidate it into the Pell 

Grant program.

2 Provided, That, of amounts provided 

under this heading, $2,124,056,000 shall 

also be available for Pell Grants for 

award year 2017-2018.

This language recognizes that the funds specified, 

appropriated in 2016, are available for award year 

2017-2018.

3 The maximum Pell Grant for which a 

student shall be eligible during award 

year [2015-2016] 2016-2017 shall be 

$4,860.

This language sets the maximum Pell Grant award 

for award year 2016-2017.

P-2
STUDENT FINANCIAL ASSISTANCE

Appropriation, Adjustments and Transfers

(dollars in thousands)

Appropriations/Adjustments/Transfers 2014 2015 2016

Discretionary:

Appropriation..................................................... $24,486,210 $24,198,210 $24,198,210

Mandatory:

Appropriation..................................................... 5,423,763 6,079,871 6,460,396

Total, discretionary and mandatory

appropriation ............................................ 29,909,973 30,278,081 30,658,606

P-3
STUDENT FINANCIAL ASSISTANCE

Summary of Changes

(dollars in thousands)

2015................................................................................. $30,278,081

2016................................................................................. 30,658,606

Net change ...................................... +380,525

Mandatory

Increases: 2015 base Change from base

Program:

Increase in mandatory funding provided to support

the Pell Grant program. $6,079,531 +$380,469

Increase in mandatory funding to support Iraq and

Afghanistan Service Grants as part of the Pell Grant

program. 0 +396

Subtotal, increases +380,865

Decreases: 2015 base Change from base

Program:

Decrease in mandatory funding to support Iraq and

Afghanistan Service Grants. $340 -$340

Subtotal, decreases -340

Net Change 380,525

P-4
STUDENT FINANCIAL ASSISTANCE

Authorizing Legislation

(dollars in thousands)

Activity

2015

Authorized

2015

Estimate

2016

Authorized

2016

Request

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

Federal Pell grants (HEA-IV-A-1) (discretionary) Indefinite $22,475,352 Indefinite $22,475,352

Federal Pell grants (mandatory) Indefinite 6,079,531 Indefinite 6,460,396

Federal supplemental educational opportunity

grants (HEA-IV-A-3) Indefinite 733,130 To be determined 733,130

Institutional payments (HEA-IV-G-489) 1 Indefinite To be determined

Federal work-study (HEA-IV-C) Indefinite 989,728 To be determined 989,728

Institutional payments (HEA-IV-G-489) 1 Indefinite To be determined

Institutional payments for Job Location and

Development centers (HEA-IV-C-446) 2 Indefinite To be determined

Work colleges (HEA-IV-C-448) Indefinite To be determined

Iraq and Afghanistan Service Grants (HEA-IV-A-10) 3 Indefinite 340 Indefinite 0

Federal Perkins loans (HEA-IV-E) 4

Federal Perkins loans (Proposed legislation) 0 0 To be determined 0

Federal capital contributions Indefinite 0 Indefinite 0

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

Institutional payments (HEA-IV-G-489) 1 Indefinite 0 Indefinite 0

Unfunded authorizations:

Academic achievement incentive scholarships

(HEA-IV-A, Chapter 3) Indefinite 0 Indefinite 0

Total definite authorization 0 0

P-5
STUDENT FINANCIAL ASSISTANCE

Authorizing Legislation -- continued

(dollars in thousands)

Activity

2015

Authorized

2015

Estimate

2016

Authorized

2016

Request

Total discretionary appropriation $24,198,210 $24,198,210

Total mandatory appropriation 6,079,871 6,460,396

Total appropriation 30,278,081 30,658,606

 NOTE: HEA refers to the Higher Education Act of 1965, as amended. 1 Institutions are authorized to use up to 5 percent of the first $2,750 thousand of expenditures for the Supplemental Educational Opportunity Grant, Work-Study, 

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. 2 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. 3 Legislation is sought in 2016 to make the Iraq and Afghanistan Service Grants program a non-sequesterable program by consolidating it into the Pell Grant 

program. 4 Legislation is sought in 2016 to reform the Perkins Loans program. New loan subsidies would be appropriated through a new, separate Unsubsidized 

Perkins Loan program account. The current Perkins Loan program was authorized through September 30, 2014. Because Congress did not enact legislation 

extending or repealing the authorization of the program before that date, the program was extended for 1 year, through September 30, 2015, under section 422(a) 

of the General Education Provisions Act (GEPA).

P-6
STUDENT FINANCIAL ASSISTANCE

Appropriations History

(dollars in thousands)

Year

Budget

 Estimate

to Congress

House 

Allowance

Senate 

Allowance Appropriation

2007 $14,490,057 N/A 1 N/A 1 $14,487,735 1

2008 16,419,492 $17,464,883 $18,409,883 18,122,136 2

2009 19,921,551 21,291,136 3, 4 20,851,809 3, 4 21,246,973 3

Recovery Act 

Supplemental 

(P.L. 111-5)

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

2010 1,801,809 5 19,634,905 19,296,809 6 19,296,809

2011 1,737,957 5 18,475,492 7 24,899,957 6 24,670,517

2012 30,338,016 22,367,521 8 24,670,517 8 24,535,281

2013 24,685,281 24,535,281 9 24,535,281 9 24,400,122

2014 24,685,281 N/A 10 24,536,210 6 24,486,210

2015 24,486,210 N/A 10 24,233,210 11 24,198,210

2016 24,198,210

1 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. 2 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). 3 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). 4 The levels for the House and Senate allowance reflect action on the regular annual 2009 appropriations bill, 

which proceeded in the 110th Congress only through the House Subcommittee and the Senate Committee. 5 Reflects Budget proposal to shift funding for Pell Grants and Perkins Loans to their own, separate accounts. 6 The level for the Senate allowance reflects Committee action only. 7 The level for the House allowance reflects the House-passed full-year continuing resolution. 8 The level for the House allowance reflects an introduced bill; the level for the Senate allowance reflects Senate 

Committee action only. 9 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. 10 The House allowance is shown as N/A because there was no Subcommittee action. 11 The level for the Senate allowance reflects Senate Subcommittee action only.

P-7
STUDENT FINANCIAL ASSISTANCE

Significant Items in FY 2015 Appropriations Reports

Pell Grant Program

Manager’s

Statement: The Committee directs the Department to submit a report to the House and

Senate Appropriations Committees, no later than 120 days after the enactment of 

this Act, on enrollment and graduation information for Pell Grant recipients

included in the National Student Loan Data System (NSLDS) Enrollment

Reporting roster files for the 2013-2014 Pell Grant Award Year. The Department 

is also directed to continue to provide enrollment and graduation information to

the House and Senate Appropriations Committees in the future as more robust

and useful information becomes available.

Since Pell Grant recipient enrollment and graduation information was not 

included in the NSLDS Enrollment Reporting roster files as a separate category 

for an institution’s Pell Grants-only recipients until the 2012-2013 Pell Grant 

Award Year, it is understood that six year graduation cohort rates will not be 

available for analysis until 2019. While understanding the limitation of the data, 

the report should continue to include enrollment and graduation information for 

Pell Grant recipients by each institution of higher education. The report should 

also include an updated plan to minimize the burden of recent changes to the 

NSLDS Enrollment Reporting roster files on institutions of higher education, an 

updated proposal to improve the tracking of enrollment and graduation rates for 

students that transfer and nontraditional students, and strategies to increase 

enrollment and improve graduation rates for Pell Grant recipients.

Response: The Department will comply with this directive.

P-8
Sum

DEPARTMENT OF EDUCATION FISCAL YEAR 2016 PRESIDENT'S BUDGET 

Flick Oere for MccessiNle version

(in POousMnds of dollMrs) 2016

FMPegory 2014 201D PresidenP's 

AccounP, ProgrMm Mnd AcPiviPy Fode AppropriMPion AppropriMPion BudgeP AmounP PercenP

Student Financial Assistance

1B FederMl Pell grMnPs (HEA IV-A-1):

(M) GiscrePionMry Pell grMnPs G 22,778,3D2 22,47D,3D2 22,47D,3D2 0 0B000%

(N) MMndMPory Pell grMnPs 1 M 4,83D,46E 6,07E,D31 6,460,3E6 380,86D 6B26D%

(c) MMndMPory Funding for GiscrePionMry ProgrMm FosPs M D88,000 0 0 0 ---

SuNPoPMl, FederMl Pell grMnPs 28,201,821 28,DD4,883 28,E3D,748 380,86D 1B334%

GiscrePionMry G 22,778,3D2 22,47D,3D2 22,47D,3D2 0 0B000%

MMndMPory M D,423,46E 6,07E,D31 6,460,3E6 380,86D 6B26D%

FederMl Pell GrMnPs ProgrMm InformMPion (memorMndum enPry):

GiscrePionMry MppropriMPion G 22,778,3D2 22,47D,3D2 22,47D,3D2 0 0B000%

Prior yeMr surplusC(sOorPfMll) G 10,EE4,000 8,D20,3D2 D,343,704 (3,176,648) -37B283%

MMndMPory MppropriMPion M 4,83D,46E 6,07E,D31 6,460,3E6 380,86D 6B26D%

Prior yeMr surplusC(sOorPfMll) M 0 (363,D31) 0 363,D31 -100B000%

MMndMPory funding for discrePionMry progrMm cosPs M D88,000 0 0 0 ---

ToPMl resources 3E,1ED,821 36,711,704 34,27E,4D2 (2,432,2D2) -6B62D%

GiscrePionMry progrMm cosPs G 2D,840,000 2D,6D2,000 2D,6ED,000 43,000 0B168%

MMndMPory progrMm cosPs M D,1EE,000 D,716,000 6,460,3E6 744,3E6 13B023%

ToPMl, progrMm cosPs 31,03E,000 31,368,000 32,1DD,3E6 787,3E6 2BD10%

GiscrePionMry progrMm currenP yeMr surplusC(sOorPfMll) G 8,D20,3D2 D,343,704 2,124,0D6 (3,21E,648) -60B2D1%

MMndMPory progrMm currenP yeMr surplusC(sOorPfMll) M (363,D31) 0 0 0 ---

ToPMl, surplusC(sOorPfMll) 8,1D6,821 D,343,704 2,124,0D6 (3,21E,648) -60B2D1%

MMximum MRMrd (in ROole dollMrs)

BMse MRMrd $4,860 $4,860 $4,860 0 0B000%

MMndMPory Mdd-on $870 $E1D $1,0DD 140 1DB301%

ToPMl mMximum MRMrd $D,730 $D,77D $D,E1D 140 2B424%

RecipienPs (in POousMnds) 8,173 8,237 8,376 13E 1B688%

NOTES: G = discrePionMry progrMm; M = mMndMPory progrMm; FY = fiscMl yeMr 

AccounPs Mre sOoRn under POe MdminisPering office POMP OMs primMry responsiNiliPy for mosP progrMms in POMP MccounP; OoRever, POere mMy Ne some progrMms POMP Mre MdminisPered Ny MnoPOer officeB

For mMndMPory progrMms, POe levels sOoRn in POe 2014 AppropriMPion column reflecP POe 7B2 percenP sequesPer POMP RenP inPo effecP OcPoNer 1, 2013, Mnd POe levels sOoRn in POe 201D AppropriMPion column

reflecP POe 7B3 percenP sequesPer POMP RenP inPo effecP OcPoNer 1, 2014, pursuMnP Po POe BudgeP FonProl AcP of 2011 (PBIB 112-2D)B

GePMil mMy noP Mdd Po PoPMls due Po roundingB 

1 TOe 2016 PresidenP’s BudgeP column reflecPs POe budgeP proposMl Po end POe currenP IrMq Mnd AfgOMnisPMn Service GrMnP progrMm Mnd consolidMPe iP inPo POe Pell GrMnP progrMmB

2016 PresidenP's BudgeP

FompMred Po 201D AppropriMPion

P-9
DEPARTMENT OF EDUCATION FISCAL YEAR 2016 PRESIDENT'S BUDGET 

Flick Oere for MccessiNle version

Student Financial Assistance (continued)

2B FMmpus-NMsed progrMms:

(M) FederMl supplemenPMl educMPionMl opporPuniPy grMnPs (HEA IV-A-3) G 733,130 733,130 733,130 0 0B000%

(N) FederMl Rork-sPudy (HEA IV-F) G E74,728 E8E,728 E8E,728 0 0B000%

SuNPoPMl, FMmpus-NMsed progrMms 1,707,8D8 1,722,8D8 1,722,8D8 0 0B000%

3B IrMq Mnd AfgOMnisPMn Service GrMnPs (PBIB 111-3E) 1 M 2E4 340 0 (340) -100B000%

ToPMl 2E,E0E,E73 30,278,081 30,6D8,606 380,D2D 1B2D7%

GiscrePionMry G 24,486,210 24,1E8,210 24,1E8,210 0 0B000%

MMndMPory M D,423,763 6,07E,871 6,460,3E6 380,D2D 6B2DE%

Federal Perkins Loan Program 

1B NeR loMn suNsidies (proposed legislMPion) M 0 0 0 0 ---

2B NeR neP loMn suNsidies (non-Mdd) M 0 0 (876,8D7) (876,8D7) ---

ToPMl, FederMl Perkins loMn progrMm MmounP 0 0 0 0 ---

NOTES: G = discrePionMry progrMm; M = mMndMPory progrMm; FY = fiscMl yeMr 

AccounPs Mre sOoRn under POe MdminisPering office POMP OMs primMry responsiNiliPy for mosP progrMms in POMP MccounP; OoRever, POere mMy Ne some progrMms POMP Mre MdminisPered Ny MnoPOer officeB

For mMndMPory progrMms, POe levels sOoRn in POe 2014 AppropriMPion column reflecP POe 7B2 percenP sequesPer POMP RenP inPo effecP OcPoNer 1, 2013, Mnd POe levels sOoRn in POe 201D AppropriMPion column

reflecP POe 7B3 percenP sequesPer POMP RenP inPo effecP OcPoNer 1, 2014, pursuMnP Po POe BudgeP FonProl AcP of 2011 (PBIB 112-2D)B

GePMil mMy noP Mdd Po PoPMls due Po roundingB 

1 TOe 2016 PresidenP’s BudgeP column reflecPs POe budgeP proposMl Po end POe currenP IrMq Mnd AfgOMnisPMn Service GrMnP progrMm Mnd consolidMPe iP inPo POe Pell GrMnP progrMmB

 
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 12th in attainment among those aged 25-34

(Organisation for Economic Co-operation and Development, 2014). There is a significant

opportunity gap as well. Today, 80 percent of high-school graduates from the wealthiest 

families pursue higher education, while just over half of the bottom quartile attend college

(Census Bureau, Current Population Survey, 2013). Even when high-school graduates can 

afford to begin higher education, they all too often fail to complete postsecondary education. 

Less than 6 in 10 first-time full-time college students at 4-year schools graduate within 6 years

(NCES, Condition of Education 2014).

The President’s fiscal year 2016 Budget focuses on advancing college access, affordability and 

completion, in accordance with the President’s vision of leading the world in college attainment. 

The Budget outlines a path for making community college free for responsible students while 

promoting key reforms to help more students complete postsecondary education, simplifying the 

application for Federal student aid and income-driven repayment, rewarding colleges that 

successfully enroll and graduate a significant number of low- and moderate-income students on 

time, and reforming campus-based aid programs by distributing Federal funds to colleges that 

provide the best value to students – not only by enrolling financially-needy students, but also 

ensuring they graduate and at a reasonable cost.

The total fiscal year 2016 Budget proposed for the Student Financial Assistance (SFA) account 

is nearly $30.7 billion, $381 million higher than the fiscal year 2015 level. The budget request 

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

of the request for Supplemental Educational Opportunity Grants and Work-Study. Nearly 

$6.5 billion in mandatory funds are provided in the 2016 Budget for the Pell Grant program.

The 2016 Budget provides access to additional campus-based funds through an expanded 

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

means more students will be able to receive Perkins Loans, as the program will serve a greater 

number of institutions (up to 2,700 more than the existing program). The reformed Perkins 

program will also provide additional funds at eight and a half times the current volume.

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

almost $39 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 

more than 11.7 million students. In addition, the request would provide $4.1 billion in aid in 

2016 to an estimated 731,000 students through an expanded Perkins loan program.

The fiscal year 2016 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 O-1.

P-11
STUDENT FINANCIAL ASSISTANCE

Federal Pell grants

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

(dollars in thousands)

FY 2016 Authorization: Indefinite

Budget Authority:

1

Pell program funding source

2015 2016 Change

Program funds:

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

Mandatory appropriation 6,079,531 6,460,396 +380,865

Subtotal, current year funding 28,554,883 28,935,748 +380,865

Pell Grant program costs 31,368,000 32,155,000 +787,000

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

for each fiscal year.

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 provide aid to all students at the 

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

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

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

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

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

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

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

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

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

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

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

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

P-12
STUDENT FINANCIAL ASSISTANCE

Federal Pell grants

fiscal year 2016 would be used for grants in the 2016-2017 award year, which runs from July 1, 

2016, through June 30, 2017. If Pell Grant costs for a given academic year exceed the 

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

the full cost.

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

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

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

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

2015 more than 8.2 million students will receive Pell Grants worth up to $5,775. The program 

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

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

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

reduce any student’s award level.

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

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

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

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

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

expected to increase from the 2014-2015 award year level of $5,730 to $5,775 for the 2015-

2016 award year, as a result of the CPI provision.

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

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

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

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

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

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

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

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

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

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

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

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

under §302 of the Congressional Budget Act. Like the 2015 Budget, this Budget presents the 

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

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

P-13
STUDENT FINANCIAL ASSISTANCE

Federal Pell grants

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

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

independent students with dependents. For award year 2014-2015, the income threshold at 

which a dependent student receives an automatic zero EFC determination is $24,000.

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 41 percent of all undergraduates receiving a Pell Grant.

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

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

purpose of obtaining a degree or certificate at an eligible institution. Students must also have a

high school diploma (or its equivalent). The Consolidated and Further Continuing 

Appropriations Act, 2015 restored the provision allowing students who lack a high school 

diploma, GED, or home schooling, to pass an Ability to Benefit test to be eligible for a Pell 

Grant. This provision applies only to students who first enroll in an eligible career pathways 

program on or after July 1, 2014. In addition, students who enroll on or after July 1, 2015 will 

not be eligible for the mandatory add-on to the $4,860 base maximum award.

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

of July 1, 2012, students are only eligible for Pell Grants for 12 semesters (or its equivalent) of 

full-time enrollment.

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) 2014-2015, the minimum is 

$573. Students who do not qualify for 10 percent of the maximum grant do not receive a Pell 

award. Appropriations acts set annual maximum award levels. The fiscal year 2015 

appropriation act set the maximum award supported by discretionary funds for the 2015-2016 

award year at $4,860. With the CPI provision established by the HCERA, the 2014 maximum 

award rose to $5,730. The total maximum Pell Grant award will be $5,775 for the 2015-2016 

award year as a result of the CPI provision. The total 2016-2017 maximum award is also 

expected to increase with inflation.

P-14
STUDENT FINANCIAL ASSISTANCE

Federal Pell grants

The aggregate Pell Grant award is the lesser of:

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

amount provided by mandatory funds, minus the EFC, or

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

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

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

• Tuition and fees;

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

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

of a personal computer;

• Living allowances of:

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

living at school,

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

home with parents, and

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

room and board.

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

for books, supplies and transportation; and dependent care.

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;

P-15
STUDENT FINANCIAL ASSISTANCE

Federal Pell grants

• 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 2015-2016, 

these payments will total $28.55 million.

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

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

were:

(dollars in thousands)

2011........................................ $42,015,996 1

2012........................................ 41,569,000 2

2013........................................ 35,219,536 3

2014........................................ 28,201,821 4

2015........................................ 28,554,883 5

1 Includes $5,560 million in mandatory funds to increase maximum award by $690 and $13,500 million in 

HCERA funds. 2 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. 3 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. 4 Includes $4,835 million in mandatory funds to increase maximum award by $870 and $588 million in additional 

mandatory funds provided in legislation to reduce discretionary need. 5 Includes $6,080 million in mandatory funds to increase maximum award by $915.

FY 2016 BUDGET REQUEST

Since taking office, this Administration has repeatedly sought higher Pell Grant funding, and its 

efforts have increased the Pell maximum award, and provided grants to an additional 3 million 

students. In its continued support of the program, the Administration requests $22.5 billion in 

discretionary funding, the same level as 2015. This discretionary request, plus $6.5 billion in 

mandatory funding, establishes the total 2016 Pell funding level at $28.9 billion. The mandatory 

request supports an increase in the add-on to the base maximum award of $4,860, raising the 

discretionary plus a mandatory maximum award that will increase with inflation.

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

inflation beyond 2017. The automatic inflationary increases, secured by the Administration in 

the SAFRA Act, are scheduled to expire after the 2017-2018 award year. Additionally, the

2016 Budget proposes to make several small reforms to the Pell Grant program:

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STUDENT FINANCIAL ASSISTANCE

Federal Pell grants

• First, it would strengthen academic progress requirements in the Pell Grant program in 

order to encourage students to complete their studies on time.

• Second, it would allow those students enrolled in eligible career pathways programs who 

are eligible under the recently restored Ability to Benefit provision to get the maximum 

Pell Grant award, which would allow adults without a high school diploma to gain the 

knowledge and skills they need to secure a good job. The expansion in 2015 only 

provided these students with partial Pell awards.

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

and obtain aid but do not earn any academic credits.

• Fourth, the Budget would move Iraq and Afghanistan Service Grants to the Pell Grant 

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

for which they are eligible.

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

Federal Student Aid (FAFSA). The Budget proposes eliminating questions related to 

assets, non-IRS untaxed income, non-IRS income exclusions, and other income 

adjustments, which have been shown to confuse students.

The 2016 Budget Request for GPRA Data/HEA Program Evaluation would support pilot and 

demonstration programs and evaluations of alternative strategies relating to programs under the 

HEA, including the Pell Grant program, in ways that promote student persistence and academic 

success and could accelerate progress toward an affordable high-quality postsecondary degree 

or certificate.

In addition, the 2016 Request proposes to reform and expand the existing Perkins Loan 

program, as well as end the current Iraq Afghanistan Service Grants program, consolidating it 

into the Pell Grant program. Both of these policies are discussed in greater detail later in this 

document, and the Student Aid Overview, beginning on page O-1. Savings resulting from the

reform to Perkins Loans will be reinvested in student aid spending, specifically to extend CPI 

indexing in the Pell Grant program beyond 2017.

Finally, the Budget proposes to include other Federal student aid programs, such as the 

Department of Defense tuition assistance program and Department of Veterans’ Administration 

GI Bill benefits in the 90 percent portion of the 90/10 requirement for institutions. This proposal 

is discussed in additional detail in the Student Aid Overview. The fiscal year 2016 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.

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STUDENT FINANCIAL ASSISTANCE

Federal Pell grants

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 17.3 million for award year 

2014-2015; recipients at 8.2 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

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

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

2014-15 17,340,530 -574,916 -3.21%

2015-16 17,105,101 -235,429 -1.36%

2016-17 17,450,128 345,027 2.02%

Sources: Through 2013-14, Award Year 2012-13 Pell Grant EOY Report and Final ELI10 Reports.

NOTES: Award Years 2014-15 through 2016-17 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.

P-18
STUDENT FINANCIAL ASSISTANCE

Federal Pell grants

Pell Historical Data (continued):

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 2016 level would support Pell Grant awards to 8.4 million 

recipients.

*

Applicants1

Recipients

P-19
STUDENT FINANCIAL ASSISTANCE

Federal Pell grants

Pell Historical Data (continued):

Aid Available:

Under current estimates, the Department’s fiscal year 2016 proposal would provide $32.1 billion 

in Pell Grants to students.

Maximum award:

The Department proposes to maintain the base maximum award at $4,860 for award year 2016-

2017 through discretionary and mandatory funding. The cost of providing the mandatory add-on 

that increases the maximum award to $5,775 in the 2015-2016 award year is funded by 

permanent mandatory indefinite funding as provided through HCERA.

Award 

Year

Maximum 

Award

Aid Available 

(dollars in millions) Recipients

2011-12 $5,550 $33,562 9,439,578

2012-13 5,550 32,048 8,956,000

2013-14 5,645 32,352 8,861,000

2014-15 5,730 30,998 8,173,000

2015-16 5,775 31,327 8,237,000

2016-17 5,915 32,113 8,376,000

$ in Billions

P-20
STUDENT FINANCIAL ASSISTANCE

Federal Pell grants

Pell Historical Data (continued):

Pell Maximum Award, Budget Authority and Program Costs

Fiscal 

Year

Maximum 

Award

Budget Authority

(dollars in thousands)

Program Costs

(dollars in thousands)

2007 $4,310 $13,660,711 $14,699,000

2008 4,731 16,245,000 1 18,309,000

2009 5,350 35,661,000 2 29,994,000

2010 5,550 22,794,816 3 35,702,000

2011

2012

5,550

5,550

42,015,996 4

41,569,000 6

33,598,000

32,093,000 5

2013 5,645 35,219,536 7 31,467,000 5

2014 5,730 28,201,821 8 31,039,000 5

2015 5,775 28,554,883 9 31,368,000 5

2016 5,915 28,935,352 10 32,155,000 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 for FY 2013 includes $22,778 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 for FY 2014 includes $22,778 million in discretionary funding, $4,835 million in mandatory 

funding to increase the maximum grant, and $588 million in mandatory funds for discretionary purposes. 9 Budget Authority for FY 2015 includes $22,475 million in discretionary funding, and $6,080 million in mandatory 

funding to increase the maximum grant. 10 Budget Authority requested for FY 2016 includes $22,475 million in discretionary funding, and $6,460 million in 

mandatory funding to increase the maximum grant.

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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 2013-14, approximately 73 percent of all Pell Grant 

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

Distribution of Pell Grants in Academic Year 2013-2014

Income Level Recipients Available Aid Average 

Award

Dependent:

0 - $6,000 573,974 $2,463,344,412 $4,292

$6,001 - 9,000 138,082 602,404,420 4,363

 9,001 - 20,000 862,292 3,832,592,786 4,445

20,001 - 30,000 752,162 3,323,709,588 4,419

30,001 + 1,499,986 4,573,687,608 3,049

Subtotal -

Dependent 3,826,496 14,795,738,814 3,867

Subtotal Independent 4,832,153 16,627,784,734 3,441

TOTAL 8,658,649 31,423,523,548 3,629

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 Academic Year 2013-2014

Income Level Recipients Available Aid Average 

Award

0 - $1,000 834,666 $3,094,074,787 $3,707

$1,001 - 3,000 247,545 947,421,432 3,827

 3,001 - 6,000 374,541 1,436,684,637 3,836

 6,001 - 9,000 402,058 1,517,438,971 3,774

 9,001 - 15,000 865,665 3,092,154,765 3,572

15,001 - 20,000 608,483 1,840,191,461 3,024

20,001 - 30,000 667,934 2,161,628,644 3,236

30,001 + 831,261 2,538,190,037 3,053

TOTAL 4,832,153 16,627,784,734 3,441

P-22
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 2013-2014, approximately 32 percent of the total aid available for Pell Grants 

went to students attending Public 4-Year schools, and approximately 34 percent went to 

students attending Public 2-Year schools.

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

schools. In the 1998-1999 award year, approximately 13 percent of total Pell Grant aid 

available went to students at proprietary institutions; in the 2013-2014 award year that figure 

was 20 percent.

Distribution of Pell Grants by Type of Institution in Academic Year 2013-2014

Institution 

Type

Percent of 

Pell Aid Available Aid

Recipients Average 

Award

Public 4-Year 31.8% $10,000,285,999 2,692,248 $3,714

Public 2-Year 34.0% 10,690,360,645 3,072,829 3,479

Private 14.2% 4,450,793,666 1,140,544 3,902

Proprietary 20.0% 6,282,083,238 1,753,028 3,584

TOTAL 100.0% 31,423,523,548 8,658,649 3,629

P-23
STUDENT FINANCIAL ASSISTANCE

Federal Pell grants

The following two charts show, for the years 2003-2013, total Pell recipients (in thousands) by 

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

Thousands

P-24
STUDENT FINANCIAL ASSISTANCE

Federal Pell grants

PROGRAM OUTPUT MEASURES (dollars in thousands)

Measures Program output measures 2014 2015 2016

Recipients 8,173,000 8,237,000 8,376,000

Aid available to students 1 $30,998,135 $31,326,815 $32,113,120

Maximum grant (in whole dollars) $5,730 $5,775 $5,915

Minimum grant (in whole dollars) $573 $578 $592

Average grant (in whole dollars) $3,792 $3,803 $3,833

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 2016 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.

P-25
STUDENT FINANCIAL ASSISTANCE

Federal supplemental educational opportunity grants

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

(dollars in thousands)

FY 2016 Authorization: To be determined 1

Budget Authority:

SEOG budget authority 2015 2016 Change

$733,130 $733,130 0

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

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

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

through September 30 of the following fiscal year. Funds proposed for fiscal year 2016 would

be used for the 2016-2017 award year, which runs from July 1, 2016, through June 30, 2017.

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 provision distorts the allocation of funding 

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

distributed to institutions based on student financial 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

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

P-26
STUDENT FINANCIAL ASSISTANCE

Federal supplemental educational opportunity grants

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, or who are newly enrolled on or after July 1, 2014, 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.

P-27
STUDENT FINANCIAL ASSISTANCE

Federal supplemental educational opportunity grants

Funding levels for the past 5 fiscal years were:

(dollars in thousands)

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

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

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

2014.......................................................733,130

2015.......................................................733,130

FY 2016 BUDGET REQUEST

The Administration requests $733.1 million for the SEOG program in fiscal year 2016, the same 

level as in fiscal year 2015. The 2016 Request additionally proposes to alter the allocation 

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

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

obtain employment and repay their educational debt. Allocations to participating institutions that 

fail to maintain these commitments would be redirected to better-performing institutions.

The fiscal year 2016 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 O-1.

The fiscal year 2016 request, in conjunction with institutional matching funds, would generate 

$976.5 million in available aid for an estimated 1.6 million awards.

PROGRAM OUTPUT MEASURES (dollars in thousands)

Measures Program output measures 2014 2015 2016

Recipients 1,629,489 1,629,489 1,629,489

Aid available to students 1 $976,513 $976,513 $976,513

Average award (whole dollars) $599 $599 $599

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

2016 and future years, as well as the resources and efforts invested by those served by this 

program.

P-28
STUDENT FINANCIAL ASSISTANCE

Federal supplemental educational opportunity grants

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 2012-2013. These tables include the most recent 

distributional data available, which may not match directly with the data provided in the Program 

Output Measures section.

In 2012-2013, 70 percent of dependent SEOG recipients had family income levels under 

$30,000 and 77 percent of independent SEOG recipients had family income levels under 

$20,000.

Distribution of SEOG in Academic Year 2012-2013

Income Level Recipients Available Aid Average 

Award

Dependent:

 0 - $5,999 120,954 $87,278,679 $722

$6,000 - 11,999 77,041 55,949,312 726

12,000 - 23,999 221,543 164,353,071 742

24,000 - 29,999 89,224 69,167,141 775

30,000 + 217,358 175,245,412 831

Subtotal –

 Dependent 726,120 551,993,615 799

Independent 906,634 425,341,991 469

TOTAL 1,632,754 977,335,606 599

P-29
STUDENT FINANCIAL ASSISTANCE

Federal supplemental educational opportunity grants

Distribution of SEOG to Independent Undergraduates in Academic Year 2012-2013

Income Level Recipients Available Aid Average Award

0 - $1,999 248,896 $123,744,384 $497

$2,000 - 3,999 59,315 29,971,747 505

 4,000 - 7,999 118,756 58,262,580 491

 8,000 - 11,999 115,452 53,563,050 464

12,000 - 15,999 87,038 38,289,679 440

16,000 - 19,999 72,730 31,176,930 429

20,000 + 204,447 90,333,621 443

TOTAL 906,634 425,341,991 469

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 across 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 institution type has 

remained relatively constant over the last 5 years.

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

institutions in 2012-2013.

Distribution of SEOG by Type of Institution in Academic Year 2012-2013

Institution Type Percent of SEOG 

Aid Available Aid Recipients Average Award

Public 4-Year 31.2% $304,439,450 436,927 $697

Public 2-Year 17.3% 168,742,087 417,536 404

Private 34.9% 340,971,037 348,934 810

Proprietary 16.7% 163,183,032 429,357 409

TOTAL 100.0% 977,335,606 1,632,754 599

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

P-30
STUDENT FINANCIAL ASSISTANCE

Federal work-study

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

(dollars in thousands)

FY 2016 Authorization: To be determined 1

Budget Authority:

Work-study budget authority 2015 2016 Change

$989,728 $989,728 0

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

PROGRAM DESCRIPTION

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

learning by assisting needy undergraduate and graduate students in financing postsecondary 

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

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

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

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

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

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

through September 30 of the following fiscal year. Funds requested for fiscal year 2016 would 

be used for the 2016-2017 award year, which runs from July 1, 2016 through June 30, 2017.

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

Funds are distributed to institutions based on a statutory formula, first on the basis of the 

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

based on the aggregate need of the eligible undergraduate students in attendance. The WorkStudy 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

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

P-31
STUDENT FINANCIAL ASSISTANCE

Federal work-study

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.

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, or who 

are newly enrolled on or after July 1, 2014, 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 of 

Education or the successful completion of six academic program credits).

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.

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.

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STUDENT FINANCIAL ASSISTANCE

Federal work-study

• 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. This 

program locates and develops off-campus full- or part-time jobs or community service 

jobs for currently enrolled students. The Federal share of the JLD program costs cannot 

exceed 80 percent.

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

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

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

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

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

all of their regular Work-Study, 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

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

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STUDENT FINANCIAL ASSISTANCE

Federal 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.

Funding levels for the past 5 fiscal years were:

(dollars in thousands)

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

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

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

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

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

FY 2016 BUDGET REQUEST

As with the SEOG and Perkins Loan programs, the 2016 Budget Request proposes to reform 

the Federal Work-Study allocation formula to allocate resources to those institutions that enroll 

and graduate higher numbers of Pell-eligible students, and offer affordable and quality 

education and training such that graduates can obtain employment and repay their educational 

debt.

The fiscal year 2016 Budget Requests $989.7 million for the Work-Study program, level with the 

fiscal year 2015 amount. The request will generate nearly $1.18 billion in available aid to 

support more than 692,000 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 2016 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 O-1.

PROGRAM OUTPUT MEASURES (dollars in thousands)

Measures Program output measures 2014 2015 2016

Recipients 692,482 703,138 703,138

Aid available to students 1 $1,158,522 $1,176,350 $1,176,350

Average award (whole dollars) $1,673 $1,673 $1,673

1 Aid available includes budget authority and employer-matching funds, minus administrative costs, transfers to 

SEOG, or reservations of funds for the next year.

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STUDENT FINANCIAL ASSISTANCE

Federal work-study

PROGRAM PERFORMANCE INFORMATION

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

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

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

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

2016 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 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 2012-2013. These tables 

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

data provided in the Program Output Measures section.

Distribution of Work-Study in Academic Year 2012-2013

Income Level Recipients Available Aid Average 

Award

Dependent:

0 - $5,999 40,410 $66,120,799 $1,636

$6,000 - 11,999 24,929 42,096,331 1,689

12,000 - 23,999 74,482 125,284,587 1,682

24,000 - 29,999 36,436 60,497,525 1,660

30,000 + 346,555 510,502,761 1,457

Subtotal - Dependent 522,812 804,502,003 1,533

Independent:

Undergraduate 122,091 235,326,932 1,927

Graduate 48,997 121,014,736 2,470

TOTAL 693,900 1,160,843,671 1,673

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STUDENT FINANCIAL ASSISTANCE

Federal work-study

Distribution of Work-Study to Independent Undergraduates in Academic Year 2012-2013

Income Level Recipients Available Aid Average 

Award

0 - $1,999 38,115 $70,809,991 $1,858

$2,000 - 3,999 11,924 22,580,085 1,894

 4,000 - 7,999 20,190 41,020,047 2,032

 8,000 - 11,999 15,154 31,148,788 2,055

12,000 - 15,999 10,571 21,088,403 1,995

16,000 - 19,999 7,032 13,717,733 1,951

20,000 + 19,105 34,961,885 1,820

TOTAL 122,091 235,326,932 1,927

Distribution of Work-Study Funds by Type of Institution:

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

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

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

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

institutions in 2012-2013.

Distribution of Work-Study by Type of Institution in Academic Year 2012-2013

Institution Type Percent of WorkStudy Aid Available Aid Recipients Average Award

Public 4-Year 34.2% $396,896,465 223,276 $1,778

Public 2-Year 13.0% 150,994,527 77,042 1,960

Private 47.1% 547,094,231 365,562 1,285

Proprietary 5.7% 65,858,448 28,020 2,229

TOTAL 100.0% 1,160,843,671 693,900 1,673

P-36
STUDENT FINANCIAL ASSISTANCE

Federal work-study

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 jobs in 

community service.

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

services to both children and their parents. Allowable activities, such as family literacy 

programs, emphasize preparing parents to read to their own children.

The Department has waived the usual 25 percent institutional contribution, allowing Work-Study 

funds to pay up to 100 percent of the wages to support students who tutor children in 

mathematics, or reading, or who serve in family literacy programs.

Distribution of Work-Study Funds to Students in Community Service Activities:

The table below shows the distribution of Work-Study assistance to students employed in 

community service activities in 2012-2013.

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

Academic Year 2012-2013

Type of Institution Recipients Available Aid Average 

Award

Public 4-Year 42,550 $61,475,848 $1,757

Public 2-Year 14,157 24,755,261 1,961

Private 58,962 67,570,636 1,173

Proprietary 4,902 9,177,847 2,162

TOTAL 120,571 162,979,592 1,655

P-37
STUDENT FINANCIAL ASSISTANCE

Federal Perkins loans

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

(dollars in thousands)

FY 2016 Authorization: (Proposed legislation)

Mandatory Budget Authority:

Perkins loans budget authority 2015 20161 Change

New loan subsidies2 0 -$876,857 -$876,857

Perkins Total Net Subsidy 0 -876,857 -876,857

1 Legislation is sought for 2016 to shift Perkins Loans to a mandatory credit program. (Institutions would continue 

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

than discretionary appropriations.)

2 New loan subsidies, which in the Perkins proposal would be appropriated through a new Federal Perkins Loan 

Program account, reflect the net present value of estimated Federal non-administrative lifetime costs for loans made 

in a given fiscal year. A negative number indicates estimated revenues exceed estimated costs.

PROGRAM DESCRIPTION

The Federal Perkins Loan program provides long-term, low-interest loans to financially needy

undergraduate and graduate students to help meet their higher education costs. Loans are 

made from Federal revolving funds held at institutions composed of: (1) Federal capital 

contributions (FCC); (2) institutional matching funds equaling at least one-third of the FCC;

(3) payments on prior-year student loans; and (4) reimbursements for loans cancelled in 

exchange for specific types of teaching, or military or public service. However, no Federal 

Capital Contributions have been made since 2006.

The funding for the Perkins Loan program is available for 2 fiscal years. Funds become 

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

available through September 30 of the following fiscal year. The Perkins Loan program was 

authorized through September 30, 2014. However, because Congress did not enact legislation 

extending or repealing the authorization of the program before that date, the authority for 

schools to make Federal Perkins Loans ended on September 30, 2014; that authority was then 

extended through September 30, 2015, under section 422(a) of the General Education 

Provisions Act (GEPA). Starting in 2016, the remaining institutional funds will revert to the 

Federal Government. The Administration’s 2016 Budget proposes new legislation to reform and 

expand the Perkins Loan program to replace the current program as of July 1, 2016.

However, Section 461(b)(2) of the HEA includes a narrow “grandfathering” provision that allows 

schools to make Perkins Loans to borrowers who received a disbursement on or before June 

30, 2015, for up to 5 additional years (through September 30, 2020). To be eligible, a student 

must also be enrolled at the same institution where, and in the same academic program for

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STUDENT FINANCIAL ASSISTANCE

Federal Perkins loans

which, his or her last Perkins Loan disbursement was received. In addition, a Perkins Loan can 

be made to an otherwise eligible grandfathered student to meet all or some of the student’s 

unmet need only after the student has been awarded all Direct Subsidized Loan aid for which 

the student is eligible.

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

Perkins Loan program. As mandated by statute, funds are distributed to institutions first 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 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 2014, the latest data available, the fiscal year 2011 national cohort 

default rate is 13.7 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 an estimated $1 billion in award year

2014-2015.

• Loan Rehabilitation. Participating institutions are required to establish a loan rehabilitation 

program for all defaulted borrowers. Loan rehabilitation allows the institution to eliminate the 

loan from default rate calculations. In order to rehabilitate a defaulted loan, borrowers are 

required to make nine consecutive on-time monthly payments to the institution. The first 

payment of the dictated 9-month cycle is considered the first payment of a new 10-year 

payment cycle. Once the loan is rehabilitated, the institution must update the borrower’s 

loan status with any credit reporting agency to which the default was reported. A loan can 

only be rehabilitated once.

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

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

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

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

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

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

associated with the SEOG, Work-Study, and Perkins Loan programs.

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STUDENT FINANCIAL ASSISTANCE

Federal Perkins loans

• 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

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.

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STUDENT FINANCIAL ASSISTANCE

Federal Perkins loans

• Full-time staff work in a preschool program under the Head Start Act.

• Military service in areas of hostilities and imminent danger.

• Peace Corps and VISTA service.

• Service as a law enforcement/corrections officer, firefighter, or public defender.

• Nurses and medical technicians providing health care services, professional providers of 

qualified early intervention services, and employees of qualified child/family service in 

low-income communities.

Funding levels for the past 5 fiscal years were:

(dollars in thousands)

Fiscal year Federal Capital 

Contributions1

Loan 

Cancellations

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

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

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

2014 .................................. 0 0

2015 .................................. 0 0

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

FY 2016 BUDGET PROPOSAL

The Administration proposes to expand and reform the Perkins Loan program. This legislative 

proposal will not only improve the existing Perkins Loan program, it will replace the current 

program which was authorized through September 30, 2014 (and extended for 1 year, through 

September 30, 2015), 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. The savings 

generated from this proposal would be reinvested in student aid spending, and specifically to 

continue indexing the Pell Grant to inflation beyond 2017.

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

and serviced by the Federal Government, beginning July 1, 2016. Under the Administration’s 

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

rate as Unsubsidized Stafford Loans and would accrue interest as other Unsubsidized loans do. 

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

current Perkins program.

P-41
STUDENT FINANCIAL ASSISTANCE

Federal Perkins loans

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

authority among institutions of higher education. This formula would target those institutions 

that enroll and graduate higher numbers of Pell-eligible students, and offer affordable and 

quality education and training such that graduates can obtain employment and repay their 

educational debt. Schools will continue to have discretion with regard to student eligibility. 

Existing provisions, such as the institution’s ability to transfer or reallocate Perkins Loan funds to 

other campus-based programs – SEOG and Work-Study – and current statutory formulas, 

would no longer apply.

Mandatory loan subsidy costs associated with this program would be shown in a new Federal 

Perkins Loan program account.

Because the fiscal year 2016 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 O-1.

PROGRAM OUTPUT MEASURES

Measures

Federal Perkins Loans 20141 20151 20161

Loan recipients 501,621 501,621 313,257

Loan volume2 (dollars in thousands) $1,010,264 $1,010,264 $613,044

Average loan (whole dollars) $2,014 $2,014 $1,957

Participating Institutions 1,500 1,500 1,5003

Unsubsidized Perkins Loans (proposed)

2014 2015 2016

Loan recipients — — 730,626

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

Average loan (whole dollars) — — $5,630

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.

P-42
STUDENT FINANCIAL ASSISTANCE

Federal Perkins loans

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 

2016 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 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 2012-2013. These tables include the most recent distributional data 

available, which may not correspond directly with the data provided in the Program Output 

Measures section.

Distribution of Perkins in Academic Year 2012-2013

Income Level Recipients Loan Volume Average 

Loan

Dependent:

0 - $5,999 24,080 $44,851,898 $1,863

$6,000 - 11,999 15,835 28,944,844 1,828

12,000 - 23,999 48,891 89,080,243 1,822

24,000 - 29,999 25,638 45,883,021 1,790

30,000 + 219,661 405,556,212 1,856

Subtotal – Dependent 334,105 614,316,218 1,832

Independent:

Undergraduate 100,540 176,501,409 1,756

Graduate 66,970 219,446,644 3,277

TOTAL 501,615 1,010,264,271 2,014

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STUDENT FINANCIAL ASSISTANCE

Federal Perkins loans

Distribution of Perkins to Independent Undergraduates in Academic Year 2012-2013

Income Level Recipients Available Aid Average 

Loan

0 - $1,999 25,126 $44,191,954 $1,759

$2,000 - 3,999 7,372 13,122,111 1,780

 4,000 - 7,999 13,758 24,378,089 1,772

 8,000 - 11,999 12,178 21,401,592 1,757

12,000 - 15,999 9,115 15,572,307 1,708

16,000 - 19,999 7,251 12,466,153 1,719

20,000 + 25,740 45,369,203 1,746

TOTAL 100,540 176,501,409 1,756

Distribution of Perkins Loans by Type of Institution:

The Perkins Loan program is a campus-based program and distribution of new capital funds to 

institutions is controlled by a statutory formula. Compared to 5 years ago (academic year 2008-

2009), the distribution of Perkins Loan assistance among different types of institutions has 

changed to a large degree: new Perkins Loan volume at Public 4-year institutions has increased 

by 12.4 percent over 5 years ago, and increased at Proprietary institutions by 15.6 percent over 

the same period, while volume has decreased by 58.6 percent at Public 2-year institutions.

The table below illustrates the sector distribution of Perkins loans to students in 2012-2013:

Distribution of Perkins by Type of Institution Academic Year 2012-2013

Institution Type Percent of Perkins Aid Loan Volume Recipients Average Loan

Public 4-Year 43.6% $440,613,240 242,973 $1,813

Public 2-Year 0.5% 4,960,036 2,554 1,942

Private 52.7% 531,912,313 235,461 2,185

Proprietary 3.2% 32,778,682 20,627 2,685

TOTAL 100.0% 1,010,264,271 501,615 2,014

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

P-44
STUDENT FINANCIAL ASSISTANCE

Iraq and Afghanistan service grants

(Higher Education Act of 1965, Title IV, Part A, Subpart 10)

(dollars in thousands)

FY 2016 Authorization: Indefinite

Mandatory Budget Authority:

Iraq and Afghanistan service grants budget 

authority 2015 20161 Change

$340 0 -$340

1 The 2016 request reflects the President’s Budget policy to end the current Iraq and Afghanistan Service Grants 

program and consolidate it into the Pell Grant program. The estimated 2016 budget authority for Iraq and 

Afghanistan Service Grants is $396 thousand.

PROGRAM DESCRIPTION

The Iraq and Afghanistan Service Grants program provides non-need-based grants to students 

whose parent or guardian was a member of the Armed Forces who died in Iraq or Afghanistan 

as a result of performing military service after September 11, 2001. Students are not required to 

be eligible for a Pell Grant in order to receive a Service Grant; however, the student must be

24 years old or younger; or, if older than 24, must have been enrolled in an institution of higher 

education at the time of the parent or guardian’s death.

Service Grants are equal to the maximum Pell Grant for a given award year, which is $5,775 in 

the 2015-2016 award year, and will increase with inflation for the 2016-2017 award year. 

Service Grants are excluded from the total “estimated financial assistance” used to determine a 

student’s eligibility for other Title IV Federal financial aid. In combination with other student aid, 

however, the Service Grant may not result in a student’s awards exceeding their cost of 

attendance. As with Pell Grant eligibility, students are limited to 12 semesters of full-time 

enrollment.

Funding levels for the past 5 fiscal years were:

(dollars in thousands)

2011 ............................................... $183

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

2013 ............................................... 236

2014 ............................................... 294

2015 ............................................... 340

FY 2016 BUDGET PROPOSAL

The Administration’s 2016 Budget proposes to end the current Iraq Afghanistan Service Grants 

(IASG) program and consolidate it into the Pell Grant program. As a result of sequestration, the 

current IASG program has, since award year 2012-2013, annually reduced the maximum grant

P-45
STUDENT FINANCIAL ASSISTANCE

Iraq and Afghanistan service grants

for which recipients are eligible. This policy would allow these students to receive the full, 

equivalent Pell Grant (which is not subject to sequestration). The first Service Grants were 

made in award year 2010-2011. Fewer than 1,000 awards are expected to be made with fiscal 

year 2016 funds during academic year 2016-2017.

PROGRAM OUTPUT MEASURES

Measures Program output measures 2014 2015 2016

Recipients 1 1 1

Aid Available to students (dollars in thousands)2 $331 $376 0

Maximum grant (whole dollars)

3 $5,317 $5,381 0

Average grant (whole dollars) $4,940 $5,013 04

1 Recipients estimated to number fewer than 1,000.

2 Aid available is the amount of funding available for new IASG awards to students in any single academic year. 

This amount differs from budget authority because 1 fiscal year spans across 2 academic years. For instance, total 

aid available in fiscal year 2014 is comprised of portions of both academic year 2013-2014 (ending June 30) and 

2014-2015 (beginning July 1). Amount of aid available in fiscal year 2016 reflects Budget policy to move IASG to the 

Pell Grant program. In 2016, aid available is estimated to be $476 million.

3 Maximum grant amounts reflect impact of sequestration. Amount of maximum grant in 2016 reflects Budget 

policy to move IASG to the Pell Grant Program.

4 Amount of average grant in 2016 reflects Budget policy to move IASG to the Pell Grant program.

PROGRAM PERFORMANCE INFORMATION

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

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

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

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

2016 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.

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STUDENT FINANCIAL ASSISTANCE

Iraq and Afghanistan service

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 2013-2014.

Distribution of IASG by Type of Institution 2013-2014

Institution Type Percent of IASG Aid Available Aid Recipients Average Award

Public 4-Year 62.8% $182,765 38 $4,810

Public 2-Year 11.1% 32,365 7 4,624

Private 23.7% 69,080 16 4,318

Proprietary 2.4% 6,984 2 3,492

TOTAL 100.0% 291,194 63 4,720

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

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