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The Pell Grant plays a key role in funding higher education for students from low and middle-income backgrounds, opening the door for economic mobility for students across the country. It’s the largest pool of free federal funding to help pay for higher education, sending millions of students to college every year.

The grant is awarded based on a student’s financial background, and the majority of Pell recipients come from families earning less than $60,000 per year. Other factors including family size and cost of attendance determine how much students receive. The maximum Pell Grant award amount changes each year and is set by the U.S. Department of Education.

Despite incremental increases in the maximum Pell Grant, inflation, rising tuition prices, and a higher cost of living have all driven down its value. Groups have long advocated for doubling the maximum grant in order to restore its purchasing power. 

A group of senators introduced legislation in June 2024 proposing to , which would cover more than half of the average cost of a year at a public university, not accounting for possible increases in cost of attendance between now and then. After that, the grant would be adjusted each year for inflation.

To look at how the value of the grant has changed over time, we looked at what percentage of the average tuition, fees, room and board the maximum Pell Grant covered for students at public universities each year.

How has the Pell Grant’s purchasing power changed over time?

Since it first started more than 50 years ago, the Pell Grant has steadily lost purchasing power. At its peak in 1975, the maximum Pell Grant covered nearly 80% of the average cost for tuition, fees, room and board at a public four-year university. In a time when the average cost at a public university was $1,780, that left low-income college students receiving the grant with just $380 to cover, the equivalent of $2,205 today.

Source: and the College Board

The Pell Grant was worth the most in the late 1970s, with maximum Pell Grant covering 68-80% of the cost of a public university between 1975-1980. Since then, the grant’s purchasing power has had a steady decline, dropping to around 30% in the last decade. The maximum Pell Grant hasn’t covered more than half of the average cost at a public university since 1986. Today, the maximum Pell Grant covers roughly 31% of the average cost of tuition, fees, room and board at public universities.

The Pell Grant’s Purchasing Power 25 Years Ago (1999 - 2000)

In the 1999-2000 school year, the maximum Pell Grant was $3,125 dollars, which covered roughly 38% of the average cost at a public university. Students were paying $8,274 on average for tuition, fees, room and board. That left the typical low-income college student at a public university with roughly $5,000 leftover to cover out-of-pocket (approximately $9,715 in 2024 dollars).

Average Annual Cost of Attendance:

• Private University: $20,737

• Public University: $8,274

• Community College: $4,730

Minimum wage in Sept. 1999 was $5.65, meaning your average college student could cover the difference with a minimum-wage job working 19 hours per week. They could make up more than half of the leftover cost working full-time over the summer.

Students at community college could cover two-thirds of their cost of attendance on average with the maximum Pell Grant, leaving them with $1,605 to cover out-of-pocket.

The Pell Grant’s Purchasing Power 10 Years Ago (2014 - 2015)

In September 2014, students from low-income backgrounds could get as much as $5,730 of the cost of college covered by the Pell Grant. By this time, the average cost of attendance had more than doubled for both public universities and community colleges since 1999.

Average Annual Cost of Attendance:

• Private University: $37,988

• Public University: $18,632

• Community College: $9,585

For students working toward bachelor’s degrees, this covered about 31% of the average cost of tuition, fees, room and board at a public university. That left students with $12,902 to cover with part-time jobs, student loans, savings, and other aid sources (about $17,000 in 2024 dollars). Students earning minimum wage, which was $7.25 per hour in 2014, would need to work 37 hours per week to make up the difference.

For community college students pursuing an associate degree, transfer degree, or certificate, the maximum Pell Grant would cover 60% of the average cost at a public two-year college. The average student would need to cover an additional $3,855 through student loans, scholarships and other sources. Minimum-wage workers could cover this with about 11 hours per week at their job.

The Pell Grant’s Purchasing Power Today (2023 - 2024)

The maximum Pell Grant was increased to $7,395 in the 2023-24 school year. Although the U.S. Department of Education hasn’t released data on the cost of attendance for the most recent school year, the College Board’s research shows students were paying an average of $24,030 per year for tuition, fees, housing and food at public universities in 2023-24. 

Average Annual Cost of Attendance:

• Private University: $56,190

• Public University: $24,030

• Community College: N/A

That school year, the maximum Pell Grant covered about 31% of the average cost, leaving college students with a $16,635 difference to make up. Someone working a job at federal minimum wage ($7.25, which it’s been since 2009) would have to work 48 hours per week to cover those costs without taking out loans.

For community college students, the latest data available is from the Department of Education for the 2022-23 school year, when the maximum Pell Grant covered 58% of the average tuition, fees, room, and board – roughly $12,000 in 2022. This leaves your average community college student with $5,000 left to cover out-of-pocket. A minimum-wage employee could do this working about 15 hours per week.

Which schools offer the lowest cost for Pell recipients?

Because they are more affordable in general and offer in-state tuition for students, public four-year universities and community colleges are generally the best option for low-income students trying to keep costs down.

Community colleges typically serve a more localized community compared to four-year colleges, and often help bridge the education gap for people who don’t live near a public university. They also give students an opportunity to complete the first two years of their bachelor’s degree at a lower cost compared to a public or private four-year university. For students from low-income backgrounds, attending a community college offers the best opportunity to keep costs low and get the most out of their Pell Grant. 

However, it’s important to note that most students don’t receive the maximum Pell Grant. Roughly 43% of community college students receiving the Pell Grant got less than $3,000 in the 2021-22 school year, according to data from the from the Federal Student Aid office. About 19% of Pell recipients at community colleges received more than $6,000.

For students at public four-year universities, the maximum Pell Grant today covers about 31% of the average annual cost. While public universities are more expensive than community colleges, they are still typically more affordable than private universities for students who qualify for in-state tuition. About a third (32%) of students at public universities received the maximum Pell Grant in the 2021-22 school year. Students at public universities also tend to rely on state grants, scholarships, work-study funding, student loans, and sometimes aid from their schools to bridge the gap.

Private universities are a mixed bag in terms of affordability. They tend to be more expensive than public schools, which means federal aid such as the Pell Grant and work-study funding won’t go as far. However, students at private universities tend to rely more on aid from the university itself, so depending on where they go and how much aid their school can provide, they may end up with a more affordable education.

About one in three students at private universities received the maximum Pell Grant in 2021, meaning they weren’t much more likely to receive full federal funding than their public school counterparts.

The case for doubling the Pell Grant

One of the main critiques of the Pell Grant is that it . In the last 25 years, the maximum Pell Grant has increased by $3,770. Meanwhile, the average cost of attending a public four-year university has increased by $14,115, based on data for the .

Those increases are partially due to higher tuition rates, but a significant chunk of that is due to the rising cost of living, especially for students at public schools. While grew by $6,401 from 1999 to 2022, room and board increased by $7,714 in the same time period. Students at community colleges saw a similar increase in room and board, but tuition and fees rose by just $2,250.

Doubling the Pell Grant is long overdue, as incremental increases in funding over the years have not kept up with the rising cost of college. While inflation adjustments are critical in helping the Pell Grant keep pace with inflation, the maximum Pell Grant will still need continuous increases to help account for rising housing prices, which in some cases dramatically drive up the cost of attendance for students, especially in more expensive cities and states.

Methodology

This study used data on the annual maximum Pell Grant from the in current dollars and average cost of tuition, fees, room, and board from the in current dollars.

It’s important to note that just looking at average tuition, fees, room, and board does not fully capture the cost of college for students. Room and board may not be the same price as what students pay living off campus, and this also does not include costs like transportation and textbooks.

While looking at the average cost of attendance, which includes costs such as transportation and textbooks, may more accurately encompass what students pay, that data was not available for all the years that the Pell Grant has been offered. We used average tuition, fees, room, and board instead to ensure consistency between comparisons over the years, but it likely underestimates the total cost students incur.