JUST THE FACTS · 9:34M
5. How does the government help low-income students?
November 7, 2025 · We’re hitting the books and talking about how the government helps people pay for school. The federal government offers a range of income-based education programs, with most support aimed at families with fewer resources. In this episode of “Just the Facts: Do You Qualify?”, USAFacts founder Steve Ballmer breaks down how the government funds loans and grants, who qualifies, and how much the government spends per student. You’ll learn about the difference between federal loans and grants, who is eligible for Head Start programs, and why every college kid has to hear about the FAFSA.
Just the Facts: Do You Qualify?
5. How does the government help low-income students?
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9m
Transcript
I was the first in my family to attend college—my parents couldn’t afford it, but we also didn’t qualify for any of the means-tested support programs. When it comes to education, the federal government offers a range of means-tested education programs where eligibility depends on income, with most support aimed at families with fewer resources.
Just The Facts. Do you qualify? A look at government support in America. A six part series from USAFacts. In this episode: Education.
Means-tested support shows up in two key places: after high school and before kindergarten.
This video focuses on education programs that individuals qualify for, rather than ones like Title I that funds schools.
Let’s start with post-high school education—community colleges, four-year universities, technical schools, and graduate programs.
The federal government helps pay for these educational opportunities and training programs with both loans and grants.
Loans for low-income students have lower interest rates, and the government pays the interest while students are in school—but loans must be repaid. The government also makes unsubsidized loans, and much of the discussion about education loan forgiveness includes both loan types.
Grants, however, do not get repaid and are awarded based on need.
There are several types of grants: The largest is the Pell Grant, which we’ll explain in more detail shortly.
There are smaller grants like the TEACH Grants for students planning to teach in low-income schools and TRIO Grants that fund programs helping low-income and first-generation students access and complete college.
State and local governments also have their own aid programs.
Another form of help is Federal Work-Study (FWS), which provides part-time jobs to students with financial need.
In most of these cases, the school or the employer pays 25% of the student’s wages, and the federal government covers up to 75%. That can come as cash or help with tuition, food, housing, or books.
Some jobs are on campus, but at least 7% of this spending must go toward off-campus jobs at public-interest organizations.
In the 2022–23 school year, the federal government gave an average of $1,655 per student.
To access these programs—including state aid—students must fill out the FAFSA, or the Free Application for Federal Student Aid. It calculates how much a family is expected to contribute based on income and assets.
One form of aid not on the FAFSA are tax credits. The American Opportunity Tax Credit (AOTC) offers up to $2,500 per student in the first four years of post-high school education.
To get the full credit, the tax filer’s income must be under $80,000, with partial credits available up to $90,000. Up to $1,000 is refundable, which means you get the money whether or not you owed any taxes.
In 2024, the AOTC resulted in $2.5 billion in refunds.
Now back to Pell Grants, the largest federal grant program. Created in the 1970s, these grants cover post-high school education.
There’s no fixed income cutoff—instead, a formula considers income, household size, dependency status, and assets.
For example, a student from a single-parent household of four earning $62,000 could get the maximum award. At $90,000, they’d still qualify for the minimum.
For the 2024–25 school year, Pell Grants ranged from $740 to $7,395.
6.4 million students received Pell Grants in the 2023-2024 award year, which totaled $35 billion in federal spending.
Pell grant expenditures, recipients, and awards
In fiscal year (FY) 2024, the federal government spent $34.7 on Pell Grants. Adjusting for inflation, spending peaked in FY 2011.
For the 2024–25 school year, Pell Grants ranged from $740 to $7,395.
6.4 million students received Pell Grants in the 2023-2024 award year, which totaled $35 billion in federal spending.
The program is designed to grow with need: as more eligible students apply, the budget expands.
Pell spending fluctuates. It spiked during the Great Recession – when enrollment surged – then dropped as enrollment fell.
In 2012, Congress limited Pell eligibility to 12 semesters. That was down from a former of 18 semesters. They also tightened up other rules.
At its peak in the early 2010s, Pell spending was nearly 52% higher than it is today. All adjusted for inflation.
So how far does this aid go?
In the 2021-2022 academic year, the average cost of tuition, fees, room and board across all school types was $26,858 per year.
Average federal grant aid was $4,983. Which is about 19% of the total cost.
The Big Beautiful Bill, which passed in July 2025, expanded Pell Grant eligibility to include students enrolling in short-term workforce training programs.
It also made students who receive full-ride scholarships from other sources ineligible.
That sums it up for the major programs that apply after you graduate from high school.
Now let’s look at what happens pre-kindergarten.
Two key federal programs are Early Head Start and Head Start. Early Head Start supports pregnant women and families with infants and toddlers.
Head Start picks up when kids become age 3, and serves kids ages 3-5. Both are free, federally funded, and they take place in separate structures, or centers, homes, or in family childcare settings.
They include health services, meals, screenings, and parent coaching in addition to the basic services.
In 2024, a family of four had to earn $31,200 or less to qualify based strictly on income—which is close to the federal poverty line.
But some families automatically qualify if they are homeless, have a child in foster care or are on these other government support programs.
There are also versions of Head Start for migrant and seasonal farmworker families and for tribal communities, all run separately under the same budget.
In 2024, more than 715,000 children were enrolled in some version of Head Start.
Unlike Pell Grants, which go directly to schools on behalf of students, Head Start funding goes to local nonprofits, school districts, or other institutions. Families apply directly to these providers. If the program reaches capacity, even eligible kids may be waitlisted. Grantees must prioritize the lowest-income applicants.
In 2024, the federal government spent $12.3 billion on Head Start and Early Head Start—which is about 0.18% of the total federal budget. That funding has nearly doubled over time, adjusted for inflation. And some states also have additional funding for pre-K programs in their state.
In addition to these programs, about half of children in k-12 public schools across the country are eligible for free or reduced-price lunches through the National School Lunch Program.
So that’s how the federal government supports college, K-12, and preschool for families with lower incomes. For more data on the full US education system—information like student test scores or the economic return on a college degree—check out Just the Facts: US Population.
There’s important questions about what to do, and how to help less affluent people in our education system. People can certainly have differing points of view. We give you the facts, you decide what you think.
Thanks for watching—and please share the entire series: Do You Qualify? A Look at Government Support in America. At USAFacts, we give you the data—you make up your own mind.
Stay tuned for the next episode: Cash Assistance.
Page sources and methodology
All of the data on the video and page was sourced directly from government agencies. The analysis and final review was performed by USAFacts.
Office of Federal Student Aid
Title IV Program Volume Reports
Internal Revenue Service
Statistics of Income
