Pell Grants

In response to a congressional request, GAO analyzed a proposal to substitute Pell Grants for guaranteed student loans, focusing on the: (1) costs associated with increasing the size and availability of Pell Grants; and (2) characteristics of Pell Grant recipients.

GAO found that: (1) 2.8 million undergraduate students received over $3.4 billion in grants in the 1986 through 1987 school year to finance their education; (2) the average grant was $1,249; (3) most of the recipients were full-time, first-year students who received no financial support from a parent; (4) 35 percent of the recipients reported no income; (5) few recipients received the maximum dollar award or the maximum 60 percent of attendance cost; (6) about one-third of the first-year students did not receive a Pell Grant the following year; and (7) fewer students attending 2-year commercial trade schools received grants in subsequent years than 2-year public and private school students. GAO also found that, in school year 1986 through 1987, the costs to raise the maximum Pell Grant to 100 percent of the cost of attendance for: (1) students with no income would have totalled $651 million for a maximum grant of $2,100 and an additional $84 million for a maximum grant of $2,200; and (2) all recipients, regardless of income, would have totalled $2.2 billion for a $2,100 grant and an additional $200 million for a $2,200 grant.