A Democratic bill with 2 Republican cosponsors · See all 3 cosponsors
Last activity — Read twice and referred to the Committee on Finance.
In committee
Introduced and handed to a committee in the chamber it started in.
The committee holds it, and most bills are never heard from again. A hearing or a committee vote would be news; silence is the usual outcome, and it kills the bill without anyone voting against it.
Its path through Congress
- Introduced
- In Committee
What this bill would do
The Tax-Free Pell Grant Act aims to change the Internal Revenue Code of 1986. It expands the exclusion of Federal Pell Grants from an individual's gross income. These changes will apply to taxable years starting after December 31, 2025.
Yes· 3 of 14
- Scored +9
Would households on low incomes be better off under this?
Pell Grants are exclusively for low-income students, making this a direct financial benefit.
- Scored +9
Would students be better off under this?
Directly increases the after-tax value of Pell Grant funding for students.
- Scored +8
Would people in their twenties and thirties be better off under this?
Primarily benefits college-aged students receiving Pell Grants.
The opposite
- Scored -1
Does this reduce what the federal government owes?
Reducing taxable income slightly decreases federal tax revenue.
Who it would affect, and how
Potential Positive Impacts for People
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Tax Exclusion for Pell Grants: Under Section 2(a), individuals receiving a Federal Pell Grant under section 401 of the Higher Education Act of 1965 can exclude these funds from their gross income. This provides a financial benefit by reducing the amount of income subject to tax.
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Credit Availability: Section 2(b) ensures that Federal Pell Grants are not used to adjust the American Opportunity and Lifetime Learning Credits. This allows individuals to potentially maintain those tax credits while also receiving Pell Grant funds.
Potential Negative Impacts for People
- No negative impacts for people are explicitly mentioned in the provided text.
Groups and Interests Ranking
Every group the model scored this bill for, from -10 to +10. Tap or hover a score for the reason it gave.
- Demographic And Interest Groups
- Would households on low incomes be better off under this? — Pell Grants are exclusively for low-income students, making this a direct financial benefit. Would students be better off under this? — Directly increases the after-tax value of Pell Grant funding for students. Would people in their twenties and thirties be better off under this? — Primarily benefits college-aged students receiving Pell Grants. Would Black Americans be better off under this? — Positively impacts minority groups who are statistically more likely to rely on Pell Grants. Would Hispanic Americans be better off under this? — Positively impacts minority groups who are statistically more likely to rely on Pell Grants. Would Native Americans be better off under this? — Positively impacts minority groups who are statistically more likely to rely on Pell Grants. Would Asian Americans be better off under this? — Benefits low-income students within this demographic. Would white Americans be better off under this? — Benefits low-income students within this demographic. Would middle-income households be better off under this? — Some middle-income students may qualify or benefit from related tax credits.
- Social Issues And Justice
- Is this likely to lift people out of poverty? — Increases the net financial aid available to the lowest-income students. Does this narrow racial gaps in how people are treated? — Pell Grants disproportionately benefit minority students, reducing their tax burden.
- Education And Technology
- Does this make college cost less? — Makes college more affordable by removing the tax burden on Pell Grants.
- Economy And Finance
- Does this cut taxes for middle-income families? — Provides tax relief for middle-class students receiving Pell Grants. Is this likely to grow the economy? — Increases disposable income for low-income students which can stimulate local spending. Does this reduce what the federal government owes? — Reducing taxable income slightly decreases federal tax revenue.
- 5/6/2025
- Read twice and referred to the Committee on Finance.
- 3 Cosponsors added.
- Introduced in Senate
One bill Congress.gov lists as related to this one — companions in the other chamber, earlier versions, and bills this one absorbed or was folded into.
Chuck GrassleyRepublican · Iowa
Thomas TillisRepublican · North Carolina
Ron WydenDemocrat · Oregon