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grant aid does not cover the total cost of attendance. Most recipients come from families with income levels below $30,000 a year. However, tPresident’s Fiscal Year 2026 budget proposes eliminating SEOG for the most financially vulnerable studentsis poorly targeted and duplicative of Pell grants – though the budget also calls for a cut to Pell Grants. In combination with the FY26 budget proposal to decrease the maximum Pell grant award, the nearly two million students who receive SEOG annually will face even greater financial hardship and may have to decide to forgo completing their college education or take on more debt, creating a burden that persists long after graduation and hinders their opportunity for upward economic mobility.
Proposed Pell Grant and SEOG Cuts Jeopardize College Affordability for Millions of Low-Income Students
The existing Pell Grant program is already insufficient in helping students from low-income families cover the entire cost of attendance at a college or university, which includes both tuition and non-tuition expenses. This means students need access to additional grant aid to afford a postsecondary education, to work excessive hours, or to take out loans to cover the unmet need.
The Pell Grant program is perhaps the most notable of the federal grant aid programs, making higher education possible for nearly seven million students annually. Student grant aid, like Pell Grants and SEOG, does not need to be repaid and has contributed to increased college enrollment, credit accumulation, persistence, and degree completion for students from low-income backgrounds. Despite the role Pell Grants play in closing the college affordability gap for students and families with household incomes below $40,000, the Administration is proposing to reduce the maximum Pell Grant award by $1,685 from the prior year, which will negatively impact millions of students’ ability to pay for college.
SEOG Has Helped Students with the Greatest Financial Need Afford College
To address this affordability gap, the federal government provides higher education institutions with funding for additional grant aid to undergraduate students with exceptional financial need through the SEOG program. Institutions that are eligible to participate in the program must match the federal share of funding from their own resources so that the federal share of funding is no greater than 75 percent and must use the funds solely for student grant awards. The program is designed to supplement the aid students receive from other sources, giving priority to students who qualify to receive a Pell Grant and have the greatest need as determined by income. Institutions may progressively fund other low-income students who are not eligible for Pell grants, if remaining SEOG funds are available. The minimum SEOG award is $100 and the maximum award is $4,000, with the average grant to students totaling $952. Students can use the grant aid to pay for tuition and fees as well as books, supplies, and other institutional charges such as housing and meals.
SEOG Complements the Pell Grant and is Well-Targeted to Both Dependent and Independent Students with High Financial Need
Nearly all (98%) of SEOG recipients also receive Pell Grants. While Pell Grant awards are determined through a combination of a student’s income level and their enrollment intensity (the number of credit hours taken in a semester), SEOG can be combined with Pell Grant funding, but is more flexible and does not have a credit limit or semester limit. In the academic year 2022-23, 62 percent of dependent students and 80 percent of independent students who received FSEOG had household incomes below $30,000.
Eliminating SEOG Based on Unfounded Claims and Faulty Evidence Puts the Most Vulnerable Students at Risk
Currently, there are nearly two million students relying on the federal government to disburse SEOG funds to their institutions, enabling them to continue their education. Not having sufficient resources to pay for college is a significant reason students give for discontinuing their pursuit of a college degree. Sudden elimination of the SEOG program could deter students from enrolling in college, hinder their ability to complete college, and increase student debt.
The SEOG allocation process could certainly be improved to provide a greater share of funding to institutions serving most students from low-income backgrounds. There are existing proposals advocating for modernizing the campus-based aid allocation formula to reflect the comparative need of the student populations across all sectors of higher education instead of disproportionately benefiting higher cost colleges and universities, as the current formula allows. As almost all students receiving SEOG also receive Pell Grants, we advocate for the strengthening of the Pell Grant program, so it covers more of the cost of attendance and reduces the need for supplemental grant aid. Cutting SEOG while reducing other forms of need-based aid is not reform; it induces students to drop out and increases the amount of debt they need to take on to enroll in college.
We urge lawmakers to reject any proposed cuts to the maximum Pell Grant award and the elimination of SEOG and consider policy reforms and recommendations informed by data and practice to improve the federal government’s role in funding campus-based grant aid.
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