Biden seeks extra $400 a year in Pell grants for college and to expand aid to Dreamers

President Joe Biden asked Congress for a $400 annual increase in maximum Pell grants for college students as part of a budget proposal issued Friday.

The president also called to broaden eligibility to undocumented immigrants known as Dreamers.

Pell grants are available to undergraduate students who display exceptional financial need. Unlike loans, they generally don’t have to be repaid.

More from Personal Finance:
New college grad job outlook looks promising for Class of 2021
Biden tax plan may lead to more Roth retirement accounts
More colleges move to make vaccines mandatory for students

If adopted by Congress, Biden’s budget would yield the largest one-time annual increase to the federal grants since 2009, according to the proposal, signed by Shalanda Young, the acting director of the Office of Management and Budget.

Students can currently get a maximum $6,495 grant for the 2021-22 award year, which starts July 1, according to the Department of Education.

Amounts vary based on criteria like school cost, full- or part-time status, and information reported on one’s FAFSA federal student aid form (Free Application for Federal Student Aid).

The Biden administration positioned the increase as a first step toward the president’s goal of ultimately doubling grant money available to students.

The raise would promote greater racial equity and lower financial barriers for low- and middle-income students seeking a college degree, the administration said.

“To help shrink racial gaps in higher education — which have worsened amidst the COVID-19 pandemic — the discretionary request takes a significant first step toward doubling the Pell Grant by proposing to increase the maximum grant by $400,” according to the proposal.

The budget request applies to discretionary federal spending for fiscal-year 2022, which starts Oct. 1.

The proposal would also make Pell grants available to undocumented immigrants who came to the U.S. as children and are Deferred Action for Childhood Arrivals recipients.

The DACA program, created during the Obama administration, lets such individuals, known as Dreamers, stay in the country for a period of time that’s subject to renewal. However, DACA recipients are not eligible for federal financial aid like grants or loans.

Biden’s budget would allocate an extra $3 billion to the Department of Education for the measures.

Overall, the request includes $102.8 billion for the Education Department, a roughly 41% increase over the amount enacted in 2021.