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Tax-Free Pell Grants: More Money for Education

This bill makes federal Pell Grants exempt from taxable income. This means students receiving these grants will not have to pay taxes on them, increasing the actual amount available for their education. The changes will take effect starting from the 2026 tax year.
Key points
Pell Grants will be excluded from taxable income, meaning more money for students.
Pell Grant amounts will not reduce education tax credits like American Opportunity and Lifetime Learning Credits.
The changes will apply to tax years beginning after December 31, 2025.
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Status: Introduced
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Additional Information
Print number: 119_S_1610
Sponsor: Sen. Whitehouse, Sheldon [D-RI]
Process start date: 2025-05-06