Pell Grant Eligibility Changes: SAI Cap and Workforce Pell

The rules for who qualifies for a Pell Grant are changing. Under the One Big Beautiful Bill Act, signed on July 4, 2025, several Pell Grant eligibility changes take effect with the 2026–27 award year, which begins July 1, 2026. Some students who used to qualify no longer will; others who did not qualify before now can. Here is what is actually different, who it affects, and what stayed the same.¹

A New Cap on the Student Aid Index

Students whose Student Aid Index reaches or exceeds $14,790 are now ineligible for any Pell Grant.¹ That figure is set at twice the maximum Pell Grant award of $7,395 for the 2026–27 year.² Before this change, students with fairly high SAI scores could still receive small Pell awards; that pathway is closed.³

One narrow exception remains. The SAI cap does not apply to dependents of certain deceased servicemembers and public safety officers who qualify under the Special Rule for Pell Grants.⁴

Foreign Earned Income Now Counts

If your family reports a foreign earned income exclusion on the FAFSA, that amount is now added back into adjusted gross income when the government determines Pell eligibility. The calculation happens automatically inside the FAFSA system. Schools can no longer use professional judgment to move foreign income into AGI for Pell purposes, because the Department of Education handles it directly.⁵ For families with foreign earnings, the effect is a higher calculated income and, potentially, a smaller Pell Grant or none at all.

Full-Ride Scholarships Now Block Pell Eligibility

If your non-federal grants and scholarships from institutional, state, or private sources add up to your full cost of attendance, you cannot receive a Pell Grant, even if you would otherwise qualify based on need.⁶ The rule mainly affects student-athletes on full-ride scholarships and others whose combined outside aid meets or exceeds their cost of attendance. Congress estimated it would affect roughly 2,000 students nationally.⁷

There is a workaround. A school can reduce non-federal aid to at least one dollar below the cost of attendance so the student keeps Pell eligibility.⁷ Under the Department of Education’s final rule, financial aid offices package Pell first and then layer other aid on top; if the non-federal total meets or exceeds cost of attendance, the school must either remove the Pell Grant or adjust the other aid. Federal dollars, such as Workforce Innovation and Opportunity Act funding, do not count toward the non-federal total. If a Pell Grant is returned because of this rule, the student’s Lifetime Eligibility Used is restored for the returned funds, so no portion of the lifetime allotment is permanently lost.⁸

Farms, Small Businesses, and Fishing Operations Off the Books Again

Starting with the 2026–27 FAFSA, families no longer report the value of a family farm on which they live, a family-owned business with 100 or fewer full-time employees, or a family-owned commercial fishing operation.¹ Those assets had been counted under the FAFSA Simplification Act; now they are excluded from the SAI calculation. For affected families, the change lowers calculated financial strength and can increase Pell eligibility or the award amount.⁹

A New Path: Workforce Pell Grants

For the first time, Pell Grants can pay for short-term career training. The Department of Education’s final rule creating the Workforce Pell Grant took effect July 20, 2026, with early implementation available from July 1, 2026.¹⁰⁸

To qualify, a program has to run between 150 and 599 clock hours and last at least 8 weeks but fewer than 15 weeks. It must lead to a recognized postsecondary credential, and it cannot be a correspondence course, study-abroad program, or direct assessment program. The training also has to align with high-skill, high-wage, or in-demand occupations and be approved by both the state governor and the U.S. Secretary of Education.¹⁰

Programs face strict performance standards: at least a 70% completion rate and a 70% job placement rate within 180 days of completion.⁶ Self-employed graduates and those who stay in the same job they held before enrollment count toward placement.⁸ Programs must also pass a “value-added earnings” test: the adjusted median earnings of completers must exceed 150% of the federal poverty guidelines for a single person, and a program with zero or negative value-added earnings loses eligibility. Published tuition and fees cannot exceed the program’s value-added earnings figure.¹⁰

A few limits on the student side: institutions choose whether to participate at all, so not every eligible-looking program will offer it. Students who already hold a graduate degree cannot use Workforce Pell, though those with only a bachelor’s degree can. And you cannot receive Pell Grants for two different eligible programs at the same time.¹⁰

What Did Not Change

Two proposals that would have reshaped Pell eligibility for millions of students did not survive into the final law. The House had proposed raising full-time enrollment from 12 to 15 credit hours and cutting off Pell eligibility for students enrolled less than half-time.⁷ The Congressional Budget Office had estimated those two changes would put about 4.4 million of 6.9 million Pell recipients at risk of reduced awards or lost eligibility.³ Both were dropped. Part-time students keep their eligibility, and the 12-credit-hour definition of full-time enrollment stays in place.⁹

The lifetime limit is also unchanged. Students can still receive Pell Grants for up to 12 semesters, equivalent to six years of full-time enrollment.⁹

Award Amounts and When To File

For 2026–27, the maximum Pell Grant is $7,395 and the minimum is $740. The Department has said it will publish revised figures if Congress modifies the amount.²

The 2026–27 FAFSA launched on October 1, 2025, and it already incorporates the SAI cap, foreign income rule, and asset exclusions. If you filed during the August–September beta testing window, you did not need to resubmit; the Department committed to reprocessing any beta applications affected by the new rules.¹

1
FSA Partners. 2026-27 FAFSA Form and Pell Grant Eligibility Updates
2
FSA Partners. 2026-27 Federal Pell Grant Maximum and Minimum Award Amounts
3
NASFAA. Analysis: Under House Reconciliation Bill, Most Students Would Receive Less Pell Grant Aid
4
Morgan State University. One Big Beautiful Bill Act and Financial Aid Impacts
5
FSA Partners. 2026-2027 Application and Verification Guide – Chapter 3: SAI and Pell Grant Eligibility
6
NASFAA. Federal Pell Grant Changes From the One Big Beautiful Bill Act – Brief for Campus Leadership
7
NAICU. Frequently Asked Questions About the One Big Beautiful Bill Act
8
NASFAA. NASFAA Deep Dive: ED Releases Final Rule for Pell Grant Provisions of OBBBA
9
NASFAA. Federal Student Aid Changes From the One Big Beautiful Bill Act
10
Federal Register. Accountability in Higher Education and Access Through Demand-Driven Workforce Pell