Tax-Free Pell Grant Act

# Tax-Free Pell Grant Act Summary **What the Bill Would Do** The Tax-Free Pell Grant Act would make Pell Grants—federal financial aid for low- and moderate-income college students—tax-free. Currently, students who receive Pell Grants must report them as taxable income on their federal tax returns, which can increase their tax liability. This bill would change that by exempting Pell Grant money from federal income taxation, allowing recipients to keep more of their aid. **Who It Affects** The bill primarily benefits low- and moderate-income college students who rely on Pell Grants to help pay for education costs.

Pell Grants are awarded to students with substantial financial need, typically those from families earning under $60,000 annually. The change would reduce the tax burden on these students, effectively making their aid go further toward tuition, books, and living expenses. **Current Status** As of now, the bill is in committee (S 1610 in the Senate), meaning it has been introduced but has not yet been debated or voted on by the full Senate. Committee review is an early stage in the legislative process, and the bill would need to advance through committee approval, full Senate passage, and House approval before becoming law.