Increasing funding for Federal Pell Grants

Section 401(b) of the Higher Education Act of 1965 (20 U.S.C. 1070a(b)) is amended— (1) in paragraph (5)(A)— (A) in clause (i), by striking and; (B) in clause (ii), by striking the period and inserting; and; and (C) by adding at the end the following: (iii) beginning in award year 2028–2029 and for each subsequent award year, an additional amount equal to the quotient of— (I) the amount of the appropriation under paragraph (7)(A)(v) for the fiscal year that includes the first day of the award year; divided by (II) the number of students expected to be eligible for Federal Pell Grants for such award year, as determined by the Secretary.; and (2) in paragraph (7)— (A) in subparagraph (A)— (i) in clause (iii), by striking and after the semicolon; (ii) in clause (iv), by striking the period and inserting; and; and (iii) by adding at the end the following: (v) the amount determined under subparagraph (C) for fiscal year 2028 and each succeeding fiscal year.; (B) by redesignating subparagraph (C) as subparagraph (D); and (C) by inserting after subparagraph (B) the following: (C) Amount of additional appropriations (i) First-year rule For fiscal year 2028, the amount determined under this subparagraph shall be the amount of savings to the Federal Government generated by the amendments made by sections 3 and 4 of the PELL Act of 2025 for the first full fiscal year following the date of enactment of such Act— (I) as compared to the full fiscal year immediately preceding such Act; and (II) as determined by the Director of the Office of Management and Budget. (ii) Inflation adjustments For fiscal year 2029 and each subsequent fiscal year, the amount determined under this subparagraph shall be the amount determined under this subparagraph for the preceding fiscal year, increased by the percentage increase, if any, in the Chained Consumer Price Index for All Urban Consumers for the most recent full calendar year. (iii) Two-year availability The amount appropriated for a fiscal year, as determined in accordance with this subparagraph, shall remain available until the last day of the fiscal year following the fiscal year for which the determination is made..