Pell Grants were established in 1972 by Congress as the Basic Educational Opportunity Grant program and took effect a year later. The grants were created to help low-income students pay the costs of postsecondary education. Many experts in student aid, however, say the amount of the awards has failed to keep pace with the rising costs of college. Adjusting the $1,400 maximum award in 1975 for inflation, the maximum grant’s value fell from $4,205 to $3,300 in 2000-01, according to a study by the American Council on Education.The following table shows how participation in the program, and the amount of money the federal government has devoted to it, have grown over time:
Pell Grant Growth | |||
| Year | Budget | Maximum Award | Recipients |
| 1973-74 | $122 million | $452 | 176,000 |
| 1978-79 | 2.1 billion | 1,600 | 1,893,000 |
| 1983-84 | 2.4 billion | 1,800 | 2,758,906 |
| 1988-89 | 4.2 billion | 2,200 | 3,198,286 |
| 1993-94 | 6.4 billion | 2,300 | 3,755,675 |
| 1998-99 | 7.3 billion | 3,000 | 3,855,180 |
| 1999-00 | 7.7 billion | 3,125 | 3,763,710 |
| 2000-01 | 7.6 billion | 3,300 | 3,912,000 |
| 2001-02 | 8.7 billion | 3,750 | 4,284,000 |
| 2002-03 | 10.3 billion | 4,000 | 4,444,000 (estimated) |
SOURCE: U.S. Department of Education
