Changes to Federal Pell Grant Eligibility: The Effect of Policy and Program Changes on College Students at Public Institutions in Kentucky

Abstract

Data from all 2010-2011 undergraduate students, who received a Pell Grant disbursement at Kentucky’s two-year and four-year public institutions, were used to simulate the eligibility changes to the Pell Grant program in the Consolidated Appropriations Act of 2012 and from the termination of year-round Pell. Specifically, these changes: a) the number of semesters a student may receive a full-time Federal Pell Grant award reduced from 18 to 12, b) the income threshold for an automatic zero EFC reduced from $32,000 to $23,000, c) elimination of eligibility for students who would have received less than 10% of the maximum award, d) eligibility achieved based on passing an ability to benefit test or by completing six credit hours of post-secondary education, and e) the termination of year-round Pell affect students at two-year and four-year institutions differently. In general, more students at two-year institutions and racial minorities will be affected greatly by the Pell Grant changes. Opportunities and challenges for financial aid administrators are discussed in light of these changes and their subsequent affects.