NerdWallet: Pell grants are a drop in the bucket—how parents and students can minimize student loan debt

by | Apr 18, 2023 | Stock Market

This article is reprinted by permission from NerdWallet.  Many years ago, one federal grant could cover all tuition and fees for the most at-need college students. And though the rise in the cost of college has slowed considerably in the past decade, the Pell Grant’s impact has dwindled to a fraction of what it once was.

My mother relied on the Pell Grant — the largest source of federal grant aid — in the 1980s, raising three kids alone and working full time. This was before online classes, and she commuted both to work and then to the next town over for school. Back then, the maximum Pell Grant would cover more than the average tuition and fees at public, four-year institutions. In the early 2000s, I did the same, chasing my undergraduate degree while working in retail and raising my daughter as a single mom. Then, the maximum Pell Grant covered 91% of those costs. Now, a couple of decades later, it covers only 68%. Don’t miss: Why I abandoned my 529 college savings plan and switched to Series I bonds instead The Pell is not just for non-traditional students like my mom and me, but lower-income traditional students too. In the 2021-22 school year, an estimated $26 billion was distributed through the Pell program. But that money isn’t going nearly as far as it once did, compounding the burden of student and parental debt among those who can stand it least. Over the past 20 years, the price of attending the most affordable colleges has risen 64% after adjusting for inflation. The maximum Pell Grant has risen just 6%.

Article Attribution | Read More at Article Source

Share This