The federal government funds several higher education grant programs in addition to the Pell Grant Program. Those grant programs are explained below.
Academic Competitiveness Grants (ACG) and National Science and Mathematics Access to Retain Talent (SMART) Grant Programs
Academic Competitiveness and SMART Grants are relatively new direct grants available to Pell Grant recipients in addition to their Pell Grant awards. They were established by the Higher Education Reconciliation Act of 2005 as part of President Bush’s "American Competitiveness Initiative" and took effect in 2006. Both programs were set to end after fiscal year 2010, and no funds were provided for either program after that year.
Academic Competitiveness Grants are given to low-income first and second year undergraduate students who complete a "recognized rigorous secondary school program of study." Students must take and pass a specific set of college preparation courses in high school, as selected by each state and approved by the Department of Education, or complete two Advanced Placement or International Baccalaureate courses and pass the accompanying exam. A first-year undergraduate can receive up to $750 in ACG aid and a second-year undergraduate can receive up to $1,300. An estimated 786,000 students were set to receive ACG aid in the 2010-11 school year at a cost of $548 million.
SMART Grants are available to low-income third and fourth year undergraduate students majoring in engineering, mathematics, science, technology or high-priority foreign languages. Eligible students must maintain a cumulative GPA of 3.0 or higher. SMART Grants provide up to $4,000 for each of the third and fourth undergraduate years. An estimated 150,000 students were slated to receive SMART Grants in the 2010-11 school year, at a cost of $384 million.
Federal Supplemental Educational Opportunity Grant (SEOG) Program
The SEOG Program provides federal funds for need-based grants directly to approximately 4,000 participating institutions of higher education. The government uses a statutory formula to determine how much each institution receives, and then universities and colleges are required to contribute institutional funds equivalent to 1/3 of the federal allocation. In contrast to Pell Grants and student loans, SEOG grants are campus administered. Recipient institutions have flexibility in deciding how to distribute the funds as long as they prioritize students with exceptional financial need. Students are typically awarded grants ranging from $100 to $4,000 per year, with the average award being $716 per year. The number and level of grants depends on the availability of funds at each school. For the 2012-13 school year, the program was allocated $735 million in federal funds.
In the 2009-10 school year, the City University of New York - Central received the largest SEOG grant at $7.2 million and the Sacred Heart Major Seminary in Michigan received the smallest at $1,270.
Federal Work-Study (FWS) Program
The Work-Study Program provides federal funds to institutions of higher education to support part-time employment for low-income students as part of their financial aid package. Students at participating institutions may be eligible for Work-Study aid based on their financial information submitted in the Free Application for Federal Student Aid (FAFSA). Institutions may use federal Work-Study funds to subsidize employment opportunities for students at either the school or with outside employers.
Congress sets total available funding for the Work-Study program through the annual appropriations process. The Department of Education allocates funds to each institution according to that school’s past funding levels under the program and the total financial need of eligible students enrolled in the school during the previous year. Approximately 3,400 institutions participate in the program. Usually, the participating school or employer must fund at least half of each student’s wages, which must be at least the federal minimum wage. Institutions of higher education determine a student’s Work-Study award based on the student’s financial need and the amount of funding the school receives through the program. The average award per student in fiscal year 2012 totaled $1,700 per academic year. Congress provided the program with $977 million in fiscal year 2012, roughly the same as it had in the previous five fiscal years. President Obama requested $1.13 billion for the program in fiscal year 2013 to expand available aid and target institutions that elect to participate in a an employer partnership pilot program.
In the 2009-10 school year, New York University received the largest Work-Study grant at $11.5 million and Tohono O'odham Community College in Arizona received the smallest at $20.
Funding for Low-Income and Minority-Serving Institutions
Title III of the Higher Education Act of 1965 provides funds directly to institutions of higher education that serve low-income and minority students. Approximately $707 million was made available for these initiatives in fiscal year 2012. Title III funds can be used by relevant institutions to improve academic quality through staff or curricula development, support administrative improvements, or expand fiscal capacity, for example by establishing endowment funds. Other activities such as construction, infrastructure improvement, and student services are also supported by Title III funds.
Institutions must demonstrate that they support low-income or minority students in order to be eligible for Title III funds. Title III, Part A aid generally goes to institutions at which a large percentage of the student body receives a Pell Grant or other need-based federal aid. A portion of Part A funds are also set aside for American Indian Tribally-Controlled Colleges and Universities. Title III, Part B aid is specifically for Historically Black Colleges and Universities. Hispanic-Serving Institutions can receive similar competitive grants under Title V of the Higher Education Act.
|Higher Education Grant Programs 2011-12 Academic Year|
|Program||Funding (billions)||Maximum Grant||Average Grant||Number of Recipients|
|Aid for Minority-Serving Institutions||$0.707||N/A||N/A||N/A|
|*First-year students received $750, second-year students received $1,300.|
|Source: U.S. Department of Education; New America Foundation|