Historically, institutional scholarships were the sole source of assistance available to students unable to afford college. While the GI bill provided education grants to returning veterans, non-veterans remained dependent on college resources until a second education grant program was enacted. The Education Opportunity Grant (EOG) was introduced under Title IV of the Higher Education Act of 1965. A third grant program, the Basic Educational Opportunity Grant (BEOG), was created by the 1972 Higher Education Amendments (Reauthorization). This legislation expanded the definition of higher education to include career and vocational education as well as the traditional post-secondary education.
The 1972 legislation also instituted the State Student Incentive Grant (SSIG), a matching-funds program that encouraged states to establish need-based student grant programs. The Academic Competitiveness Grant (ACG) and National Science and Mathematics Access to Retain Talent Grant (SMART) were authorized under the Higher Education Reconciliation Act of 2005, and the Teacher Education Assistance for College and Higher Education Grant (TEACH) was authorized under the College Cost Reduction and Access Act of 2007.
The EOG was designed to help lower-income undergraduate students attend college. From 1965 to 1972 the program was a stand-alone grant program, but the 1972 legislation eliminated this stand-alone status by linking the grant to the BEOG. The EOG became the Supplementary Educational Opportunity Grant (SEOG) in that legislation.
The BEOG was also a need-based grant program intended to ensure a minimum level of funding for eligible students. Awards were determined using the needs-analysis formula created in the 1972 legislation. The formula calculated the financial gap between the students' ability to pay and the cost of higher education. Initially, the maximum grant award was $1,400. Any remaining financial need was funded either through the SEOG or student loans.
In 1978, the Middle Income Student Assistance Act changed the income restrictions for BEOG recipients, expanding eligibility to families earning higher incomes.
In 1980, the name of the BEOG was changed to the Pell Grant.
In 2007, reauthorization legislation increased the maximum Pell award from $4,300 in 2007-08 to $5,400 in 2012-13. The American Recovery and Reinvestment Act of 2009 increased the maximum Pell award by $500.
In 1986, reauthorization legislation restricted the number of years a student could be enrolled as a full-time student and gave Pell grant recipients priority for the SEOG. In 1992, reauthorization legislation established the "statutory definition of an academic year with a number of hours and weeks."