The new Pell Exclusion Rule, which impacts Pell eligibility for 2026-2027, introduces changes that will affect guidance for students.
Because of the new Pell Exclusion Rule, key changes will impact a student’s eligibility for Pell Grants starting with the 2026–2027 award year. For example, students who receive state grants, institutional scholarships or private grants that meet or exceed their Cost of Attendance for any given period will no longer be eligible for a Pell Grant during that same period. This change takes effect July 1, 2026. As a result, financial aid offices must carefully evaluate all non-federal grant aid when packaging awards.
Here’s additional information on Pell eligibility beginning with the 2026–2027 award year:
Q: If a student receives tuition remission but is still responsible for room and board, do they remain eligible for Pell?
A: Yes. Since tuition remission does not cover the entire Cost of Attendance (which includes both direct and indirect costs), the student remains Pell-eligible.
Q: Will last-dollar scholarships impact Pell eligibility under the new rules?
A: It depends on how the institution applies these funds.
- If the scholarships are used after Pell and other aid to cover remaining costs, Pell eligibility is unaffected.
- If the last-dollar scholarships, combined with other non-federal aid, fully cover the Cost of Attendance, Pell eligibility would be eliminated.
Q: If a student’s tuition is fully covered by VA benefits, are they still eligible for Pell Grants?
A: Yes. VA benefits are considered federal resources. Pell Grant eligibility is only affected when non-federal sources cover the full Cost of Attendance.
October 21, 2025