Markus Andrews

Wall Street, Manhattan, New York
Andrey Denisyuk | Moment | Getty Images

In the feverish race to adopt artificial intelligence, the financial world stands at a critical juncture. The allure of general-purpose AI, the kind championed by tech giants, is undeniable. But for finance, a realm of intricate regulations and specialized jargon, this approach is a dangerous mirage.
It’s time for a reality check: finance needs its own AI, not a one-size-fits-all solution.

The idea that a generalized large language model (LLM) can seamlessly navigate the complexities of wealth management, asset management, or insurance is fundamentally flawed. These are domains with their own jargon, private data, specialized workflows and intermediaries, akin to healthcare or law.
A model trained on broad internet data will struggle with the precision required for financial calculations and regulatory compliance. Nor will it infer the multi-step process to navigate decision trees unless provided a framework.
Models fine tuned using private, public and user generated real world data and further enhanced by synthetic or simulated data using foundational large (and sometimes small) language models, for specific use cases using knowledge graphs and detailed workflow schemas to enable reasoning will soon determine the quality of your AI application in finance.
Extracting language from a document is one thing; reasoning and interacting with a specialist in a finance context, with its unique methodologies and schemas, is another. This leads to a natural inference: even the hyperscale horizontal players — the Microsofts and Amazons — and the application developers — the Salesforces and Palantirs of the world — need specialized collaborators in finance. Their generalist AI platforms, while powerful, lack the necessary domain expertise.

Specialized AI

The depth required in areas like wealth management and asset management is simply too granular. These leaders will inevitably need to collaborate with industry specialists who possess the intimate knowledge of workflows, regulations, and user experiences in finance.

The era of bulldozing LLMs through domains is over. The future lies in verticalization, where specialized AI is built in collaboration with experts who understand the intricacies of the financial world. This vertical of complex financial services is also large enough to justify these partnerships. At the same time, traditional financial service firms need to abandon the hubris of using these general platforms to build in-house. The initial impulse to build and own the technology due to domain expertise is understandable — sometimes because vendors are not mature or stable enough in an emerging industry. But this is a costly and often futile endeavor.
The AI landscape is evolving at breakneck speed. What’s cutting-edge today is outdated tomorrow. This requires repeated reassessments, a culture of clean sheet thinking and an organizational design that rewards speed. Financial institutions risk getting trapped in a perpetual cycle of development and maintenance, diverting resources from their core business. If a use case is common to the industry, chances are that a fintech focused on that use case will build, scale, learn and maintain its way to a better product faster than an internal team can.
A relevant parallel is the early evolution of CRM systems: trying to build your own in-house solution in the early 2000s when specialized partners emerged is now clearly proven to have been shortsighted. In some cases, where the firm is large — e.g. a JPMorgan or a Morgan Stanley — and has the resources to deploy towards building internal teams tackling use cases unique to them, this may make sense. It may also make sense if the platform is being used to generate and enhance their core intellectual property. Assuming that they can move fast.
As a result, for the generalist technology players as well as for the incumbent financial service firms, the smart move is to embrace partnerships. Firms should focus on what makes them unique — their special sauce — and let emergent fintechs handle the complementary heavy lifting.
In conclusion, the financial world must recognize that its AI needs are distinct. It needs specialized solutions. It needs more strategic partnerships between tech giants and finance experts. It needs traditional firms to resist an isolationist go-it-alone approach. The stakes are high. Generalist technology firms and specialized financial incumbents: beware.
Dr. Vinay Nair is the founder and CEO of TIFIN, a fintech wealth platform using AI and investment intelligence to serve the wealth and asset management industries. Previously, Nair was the founder 55ip, which was acquired by JPMorgan Chase. More

The “One Big Beautiful Bill Act” could make it harder to claim a low-income tax credit.
If enacted as written, the House-approved measure would require precertification for each qualifying child for filers claiming the so-called earned income tax credit, or EITC, starting in 2028.
However, the measure still needs approval from the Senate.

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As Senate Republicans debate President Donald Trump’s “big beautiful bill”, a lesser-known provision from the House-approved package could make it harder to claim a low-income tax credit.
If enacted as written, the House measure in the “One Big Beautiful Bill Act” would require precertification of each qualifying child for filers claiming the so-called earned income tax credit, or EITC, starting in 2028.

Under current law, taxpayers claim the EITC on their tax return — including Schedule EIC for qualifying children.
The provision aims to “avoid duplicative and other erroneous claims,” according to the bill’s text. But policy experts say the new rules would burden eligible filers, who may forgo the EITC as a result. The measure could also delay tax refunds for those filers, particularly amid IRS cutbacks, experts say.
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“You’re going to flood the IRS with all these [EITC] documents,” said Janet Holtzblatt, a senior fellow at the Urban-Brookings Tax Policy Center. “It’s just not clear how they’re going to process all this information.”
Holtzblatt, who has pushed to simplify the EITC for decades, wrote a critique of the proposed precertification last week.

“This is not a new idea, but was previously considered, studied and rejected for very good reasons,” Greg Leiserson, a senior fellow at the Tax Law Center at New York University Law, wrote about the proposal in late May.
Studies during the George W. Bush administration found an EITC precertification process reduced EITC claims for eligible filers, Leiserson wrote. During the study, precertification also yielded a lower return on investment compared to existing EITC enforcement, such as audits, he wrote.

EITC eligibility is ‘complicated’

One of the key benefits of the EITC is the tax break is “refundable,” meaning you can still claim the credit and get a refund with zero taxes owed.
That’s valuable for lower earners who don’t have a tax bill, experts say.
To qualify, you need “earned income,” or wages from work. The income phase-outs depend on your “qualifying children,” based on four IRS tests.

Eligibility is complicated.

Janet Holtzblatt
Senior fellow at the Urban-Brookings Tax Policy Center

“Eligibility is complicated,” and residency requirements for qualifying children often cause errors, said Holtzblatt with the Tax Policy Center. 
For 2025, the tax break is worth up to $8,046 for eligible families. You can claim the maximum EITC with adjusted gross income up to $61,555 for single filers and $68,675 for married couples filing jointly. These phase-outs apply to families with three or more children.
As of December 2024, about 23 million workers received the EITC for tax year 2022, according to the IRS. But 1 in 5 eligible taxpayers don’t claim the tax break, the agency estimates.

Changes could ‘complicate’ existing issues

Nine Democratic Senators last week voiced concerns about the House-approved EITC changes in a letter to Senate Majority Leader John Thune, R-S.D., and House Speaker Mike Johnson, R-La.
If enacted, the updates would “further complicate the EITC’s existing challenges and make it more difficult to claim,” the lawmakers wrote.
Higher earners are more likely to face an audit, but EITC claimants have a 5.5 times higher audit rate than the rest of U.S. filers, partly due to improper payments, according to the Bipartisan Policy Center.

The proposed EITC change, among other House provisions, still need Senate approval, and it’s unclear how the measure could change.
However, under the reconciliation process, Senate Republicans only need a simple majority to advance the bill.  More

A Topgolf location in Oxon Hill, Maryland, on March 20, 2024.
Kent Nishimura | Bloomberg | Getty Images

Sports entertainment, equipment and apparel stock Topgolf Callaway Brands surged on Monday after a high-profile corporate director bought shares in the company.
Shares rose almost 15%, hitting their highest level since May 13.

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Topgolf Callaway shares surged on Monday.

The moves comes after board member Adebayo Ogunlesi purchased about $2.5 million worth of shares last week, disclosed in a securities filing on Friday.
Purchases by corporate executives and directors can sometimes be seen as a vote of confidence in the company, and this purchase comes from an insider with the type of resume that Wall Street likes.
Ogunlesi is a founding partner and CEO of Global Infrastructure Partners, which was acquired by BlackRock last year in a $12 billion deal. Ogunlesi now serves on BlackRock’s board after that deal, and he also joined the OpenAI board in January.
The purchase by Ogunlesi comes after a difficult period for Topgolf Callaway. Even after Monday’s rally, shares are down 6% in 2025 and more than 50% over the past year. Overall, the stock has delivered a negative return since Callaway first announced its acquisition of Topgolf in October 2020.
This is Ogunlesi’s first purchase of Topgolf Callaway stock since June 2023, according to VerityData. Shares have dropped about 60% since that purchase.

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The battle over international student enrollment would not just impact the schools that depend on those tuition dollars, but local and state economies, as well, reports show.
According to one recent analysis, international students at Harvard contribute $180 million to the Great Boston area.

The escalating battle between the Trump administration and Harvard University over international student visas could come at a high economic cost.
Altogether, international students who studied in the U.S. contributed $43.8 billion to the U.S. economy in the 2023-24 academic year, according to the most recent data by NAFSA: Association of International Educators. In Massachusetts, alone, international students contributed nearly $4 billion and supported more than 35,000 jobs.

At Harvard, the share of international students is disproportionately high compared to most other colleges and universities. International students accounted for 27% of Harvard’s total enrollment in the 2024-25 academic year, up from 22.5% a decade earlier.
With more than 6,000 international students, Harvard supports over 1,125 local jobs and contributes $180 million to the greater Boston economy, largely through student spending, according to a new analysis by Implan, an economic software and analysis company.
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A ban on international enrollment could destabilize a vital revenue stream, said Bjorn Markeson, an economist at Implan.
“Because Harvard has a very high international student population, it’s going to have more of that impact,” Markeson said. “The economy is a network structure, so dollars flow through. They don’t just stay in one place — and when something hits Boston, it affects New England as a whole.”

A Harvard University student walks through Harvard’s campus. 
Erin Clark | Boston Globe | Getty Images

Schools have increasingly sought out international students “because they compliment the student body, and that benefits all students,” said Robert Franek, The Princeton Review’s editor-in-chief.
But foreign students also typically pay full tuition, which makes international enrollment an important source of revenue for Harvard and many colleges and universities in the U.S., according to Franek. 

Where the Trump, Harvard battle stands

For now, the fate of international enrollment at Harvard and elsewhere is still up in the air.
Tensions between the federal government and the Ivy League university have continued to escalate after Harvard in April refused to meet a set of demands issued by the Trump administration’s Task Force to Combat Anti-Semitism.
In May, President Donald Trump attempted to ban Harvard from enrolling international students, but a federal judge issued a temporary restraining order on Friday “to maintain the status quo.”
U.S. District Judge Allison Burroughs said the restraining order would remain in effect until June 20. Meanwhile, Harvard President Alan Garber said that “contingency plans are being developed to ensure that international students and scholars can continue to pursue their work at Harvard this summer and through the coming academic year.”
In an interview with NBC News on Friday, U.S. Secretary of Education Linda McMahon said Harvard needs to do more to combat antisemitism on campus and screen admissions of foreign students.
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The Trump administration has tasked DOGE with helping to root out waste, fraud and abuse at federal agencies.
At the Social Security Administration, that has also included efforts to provide unprecedented access to the agency’s data including personal information for millions of Americans.
Whether or not that access is lawful is the subject of litigation. In a new decision, the Supreme Court sides with the Trump administration and with DOGE.

A sign in front of the entrance of the Security Administration’s main campus on March 19, 2025 in Woodlawn, Maryland. 
Kayla Bartkowski | Getty Images

The Supreme Court on Friday granted the Department of Government Efficiency access to Social Security Administration data that includes sensitive personal information of millions of Americans.
The decision comes as the federal government sought a stay, or temporary suspension, after a federal judge blocked DOGE’s access to that data in April. The nation’s highest court granted an emergency application from the Trump administration to lift that injunction; the case is expected to proceed in lower courts.

In its decision, the Supreme Court concluded the Social Security Administration may give DOGE access to agency records while the case plays out “in order for those members to do their work.”
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Both the White House and the Social Security Administration called the Supreme Court decision a victory. In a statement, White House spokesperson Elizabeth Huston said it will allow the Trump administration to “carry out commonsense efforts to eliminate waste, fraud and abuse and modernize government information systems.”
Likewise, Social Security Commissioner Frank Bisignano in a statement said the agency “will continue driving forward modernization efforts, streamlining government systems, and ensuring improved service and outcomes for our beneficiaries.”
Yet others expressed grave concern in reaction to the decision, including Justice Ketanji Brown Jackson, advocacy groups and plaintiffs in the case against DOGE and the Social Security Administration.

“This is a sad day for our democracy and a scary day for millions of people,” said the coalition of plaintiffs including American Federation of State, County and Municipal Employees; the American Federation of Teachers; and the Alliance for Retired Americans, who are represented by Democracy Forward.
“This ruling will enable President Trump and DOGE’s affiliates to steal Americans’ private and personal data,” they said, while vowing to “use every legal tool at our disposal” to prevent the misuse of public data as the case moves forward.

Millions of Americans’ sensitive data at stake 

The dispute focuses on how much access DOGE should have to Americans’ personal data.
The plaintiffs filed an initial complaint in early March, stating the Social Security Administration had “abandoned its commitment to maintaining the privacy” of the sensitive personal information of millions of Americans under DOGE’s influence.
The Social Security Administration collects and stores some of the “most sensitive” personally identifiable information of millions of Americans, ranging from seniors to adults to children, the complaint notes.

When applying for a Social Security number, the agency requires the disclosure of place and date of birth, citizenship, ethnicity, race, sex, phone number and mailing address. It also requires parents’ names and Social Security numbers.
But the agency is also privy to other personal data, including personal health information, the complaint notes. That includes:

driver’s license and identification information
bank and credit cards
birth and marriage certificates
pension information
home and work addresses
school records
immigration and naturalization records
family court records
employment and employer records
psychological and psychiatric health records
hospitalization records
addiction treatment records
records for HIV/AIDS tests

The Social Security Administration also collects tax information, including total earnings, Social Security and Medicare wages and annual employee withholdings.

DOGE has not only accessed the agency’s sensitive and protected information; it has also publicly shared it, according to the complaint. The actions of the defendants, including the Social Security Administration, DOGE and leaders including former head Elon Musk, have deprived Americans of privacy protections guaranteed by federal law and made their personal information vulnerable, the complaint alleges.
In her dissent, Jackson, joined by Justice Sonia Sotomayor, notes that records show “DOGE received far broader data access” than the Social Security Administration usually allows in fraud, waste and abuse investigations. Typically, those investigations start with high level, anonymized data, with more access to more detailed information only granted as necessary.
Justice Elena Kagan also dissented in the 6-3 decision.
“The government wants to give DOGE unfettered access to this personal, non-anonymized information right now – before the courts have time to assess whether DOGE’s access is lawful,” Justice Jackson wrote.
While litigation is pending, the government has asked to temporarily suspend the lower court’s temporary limitations on DOGE’s access to Social Security data, she noted.
“But the government fails to substantiate its stay request by showing that it or the public will suffer irreparable harm absent the court’s intervention,” Justice Jackson wrote. More

The U.S. Department of Education has repeatedly promised student loan borrowers in the Saving on a Valuable Education plan forbearance that interest is not accruing on their debt.
But one woman in SAVE has seen her balance rise by thousand of dollars, and even received a notice from her lender stating that interest was continuing to collect on her debt.
Other people facing the same issue have taken to social media, looking for answers.

Los Angeles, CA – May 17: Signage and people along Bruin Walk East, on the UCLA Campus in Los Angeles, CA, Wednesday, May 17, 2023.
Jay L. Clendenin | Los Angeles Times | Getty Images

An unexpected $3,000 in interest

Ellie Bruecker
Courtesy: Bruecker Family

Despite the government’s promises, Bruecker’s student debt has grown by around $3,000 during the roughly yearlong SAVE reprieve, her loan documents show.
“I saw those numbers and my eyes bugged out of my head,” said Bruecker, 34.
She’s not the only SAVE borrower seeing interest accruing: Other people facing the same issue have taken to social media to try and get answers.

At one point, around 8 million people were enrolled in the SAVE plan, according to the Education Dept.
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Bruecker happens to work as the director of research at The Institute for College Access & Success, a nonprofit that does advocacy work in the higher education space. But she wonders how many student loan borrowers will even know that this wasn’t supposed to happen, let alone be able to get it corrected.
“Will they resolve this for everyone, or just those who get them on the phone and are loud about it?” she said.

Advocate: Check your loan history

It’s unclear how widespread the issue is.
A spokesperson for the Education Dept. did not answer CNBC’s questions about the issue that some borrowers are facing, but said that those “enrolled in the SAVE Plan remain in a forbearance that is not accruing interest.”
Mohela did not immediately respond to a request for comment.
But Mohela has a notice at the top of its website that reads: “If you recently received an interest notice for your student loan account, please know that this is not a bill, and no action is necessary at this time.”
The notice goes on to say that, “For borrowers on the SAVE administrative forbearance, interest is currently set at 0%. Refer to your loan details in your notice.”
The company does not say that the alerts were sent in error, but they likely were, said higher education expert Mark Kantrowitz.
“MOHELA sent out misleading notices to their borrowers who are in the SAVE repayment plan,” Kantrowitz said.
“Borrowers who are worried about the MOHELA letter should check their loan history to see if the balance has changed,” Kantrowitz added. If their debt has grown since July 2024, “they should contact MOHELA,” he said.

Educator and former U.S. Representative Dr. Jamaal Bowman speaks to hundreds of students from Washington, DC universities protesting U.S. President Donald Trump’s dismantling of and funding cuts to the Department of Education, in Washington, D.C., U.S. April 4, 2025. 
Allison Bailey | Reuters

Bruecker said her loan records from both Mohela and the Education Dept. reflect a higher balance after roughly around $3,000 in interest was added to her debt during the forbearance.
“Mohela has been allowing interest to accrue the entire time my loans have been in this SAVE forbearance,” she said.
Bruecker tried to contact Mohela to correct the error, but said she was unable to reach a representative despite waiting on the phone for hours.
In recent months, the Trump administration has terminated around half of the Education Department’s staff, including many of the people who helped assist borrowers when they ran into issues like this one. A federal judge has ordered Trump officials to reinstate the terminated employees, but the administration is now asking the Supreme Court to block that order.
“With the level of dysfunction at the Education Department right now, I have a real distrust this is going to get resolved for people,” Bruecker said.

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Macro uncertainty is keeping the market volatile, but investors ought to keep their focus on stocks that can provide compelling long-term returns.
Top Wall Street analysts’ recommendations can help inform investors as they pick the right stocks that can weather short-term pressures with solid execution and generate impressive returns over the long term.

With that in mind, here are three stocks favored by the Street’s top pros, according to TipRanks, a platform that ranks analysts based on their past performance.

Nvidia

Semiconductor giant Nvidia (NVDA) is this week’s first stock pick. The company reported market-beating results for the first quarter of fiscal 2026. Despite chip export restrictions, Nvidia remains confident about the demand for its artificial intelligence infrastructure.
Following the Q1 print, JPMorgan analyst Harlan Sur reiterated a buy rating on Nvidia stock with a price target of $170. The analyst noted that the company delivered solid revenue despite lost sales related to the H20 chip export restrictions on shipments to China. However, NVDA’s margins and EPS were hit by the $4.5 billion write-down related to H20 inventory write-downs.
Excluding H20 shipments, Sur projects that the July quarter data center revenue is growing at about 16% quarter over quarter, driven by continued robust spending by customers on their AI/accelerated compute projects and persistent strength in production and deployment ramp of Nvidia’s Blackwell platform. 
The analyst added that the demand for Nvidia’s Blackwell platform is very strong and is expected to continue to surpass supply for many quarters. Sur believes that management has good visibility for solid growth through calendar year 2026, backed by recent mega data center deals (including those with UAE, Saudi Arabia, and Taiwan) and the end of the diffusion rule.  

Overall, Sur concluded that Nvidia is staying ahead of competitors with its silicon, hardware and software platforms and an impressive ecosystem, “further distancing itself with its aggressive cadence of new product launches and more product segmentation over time.” 
Sur ranks No. 38 among more than 9,600 analysts tracked by TipRanks. His ratings have been profitable 66% of the time, delivering an average return of 23.4%. See Nvidia Ownership Structure on TipRanks.

Zscaler

We move to cybersecurity company Zscaler (ZS). The company’s results for the fiscal third quarter surpassed expectations, fueled by the demand for its Zero Trust Exchange platform and the growing need for AI security.
In reaction to the upbeat results, JPMorgan analyst Brian Essex reaffirmed a buy rating on Zscaler stock and boosted the price target to $292 from $275, saying, “We are encouraged by the strength in the quarter, particularly when off-calendar peers seemed to struggle with macro headwinds a bit more than expected.”
The analyst noted that Zscaler raised its full-year outlook for revenue, profitability and billings. He explained that the company’s performance was backed by encouraging contributions from emerging products like Zero Trust Everywhere, Data Security Everywhere and Agentic Operations. In fact, these emerging products are approaching $1 billion in annual recurring revenue (ARR).
Essex noted that large customer momentum continued to be solid in Q3 FY25, with the number of customers with over $1 million of ARR increasing 23% year over year, keeping Zscaler on track to exceed $3 billion of ARR in the fiscal fourth quarter. He emphasized that macro commentary was better than anticipated, as management stated that the company didn’t witness a “softer April,” though IT budgets remain tight.
Commenting on Zscaler’s Red Canary acquisition, Essex views this deal as encouraging, given that it is expected to enable the company to leverage the IP (intellectual property) and threat intel capabilities of Red Canary.
Essex ranks No. 652 among more than 9,600 analysts tracked by TipRanks. His ratings have been successful 58% of the time, delivering an average return of 12.6%. See Zscaler Hedge Fund Trading Activity on TipRanks.

Salesforce

Customer relationship management software provider Salesforce (CRM) recently reported better-than-projected revenue and earnings for the first quarter of fiscal 2026 and raised its full-year forecast. The company also announced the acquisition of data management company Informatica for $8 billion.
Following the results, TD Cowen analyst Derrick Wood reiterated a buy rating on CRM stock with a price target of $375. Wood noted that the company’s Q1 FY26 revenue and current remaining performance obligations surpassed expectations.
“We think its renewed focus on accelerating sales capacity growth is a strong demand signal & should unlock higher growth next year,” said Wood.
The analyst highlighted that AI adoption is ramping for Salesforce, with Data Cloud and AI ARR rising more than 120% year over year and reflecting strong early traction for the company’s Agentforce offering. Wood noted that 30% of net new Agentforce bookings came from existing customers expanding their usage. The analyst stated he is encouraged by the scale and velocity of Data Cloud, which he considers to be a leading indicator of Agentforce adoption as customers gear up to power agentic workflows.
Wood contends that with margins now in the mid-30% range, Salesforce is focusing more on growth by re-deploying AI cost savings. Notably, the company is increasing its workforce more aggressively, following a flat sales headcount in the last two to three years. The analyst sees this as a signal of positive demand, with management indicating that pipelines are growing by the double-digits.
Wood ranks No. 176 among more than 9,600 analysts tracked by TipRanks. His ratings have been profitable 62% of the time, delivering an average return of 14.8%. See Salesforce Technical Analysis on TipRanks. More

Pell Grants, college aid for low-income families, could be slashed under both the White House budget proposal and House GOP reconciliation bill.
President Donald Trump’s budget would cut the maximum award to the lowest amount in roughly a decade.
About 40% of undergraduates rely on Pell Grants to pay for college, and experts say if the plans are enacted, many of the lowest-income students would be forced to drop out.

Carol Yepes | Moment | Getty Images

For many students and their families, federal student aid is key for college access.
And yet, the Trump administration’s budget proposal for fiscal year 2026 calls for significant cuts to higher education funding, including reducing the maximum federal Pell Grant award to $5,710 a year from $7,395, as well as scaling back the federal work-study program. The proposed cuts would help pay for the landmark tax and spending bill Republicans in the U.S. Congress hope to enact.

Roughly 40% of undergraduate students rely on Pell Grants, a type of federal aid available to low-income families who demonstrate financial need on the Free Application for Federal Student Aid. Work study funds, which are earned through part-time jobs, often help cover additional education expenses. 
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President Donald Trump’s “skinny” budget request said changes to the Pell Grant program were necessary due to a looming shortfall, but top-ranking Democrats and college advocates say cuts could have been made elsewhere and students will pay the price.
“The money we invest in post-high school education isn’t charity — it helps Americans get good jobs, start businesses, and contribute to our economy,” Sen. Elizabeth Warren, D-Mass., told CNBC. “No kid’s education should be defunded to pay for giant tax giveaways for billionaires.”

Pell Grants are ‘the foundation for financial support’

Nearly 75% of all undergraduates receive some type of financial aid, according to the National Center for Education Statistics.

“Historically the Pell Grant was viewed as the foundation for financial support for low-income students,” said Lesley Turner, an associate professor at the University of Chicago Harris School of Public Policy and a research fellow of the National Bureau of Economic Research. “It’s the first dollar, regardless of other types of aid you have access to.”

Under Trump’s proposal, the maximum Pell Grant for the 2026-2027 academic year would be at its lowest level in more than a decade.
“The Pell reduction would impact the lowest-income families,” said Betsy Mayotte, president of The Institute of Student Loan Advisors, a nonprofit.
More than 92% of Pell Grant recipients in 2019-2020 came from families with household incomes below $60,000, according to higher education expert Mark Kantrowitz.

How Pell Grant cuts could affect college students

If the president’s cuts were enacted and then persisted for four years, the average student debt at graduation will be about $6,500 higher among those with a bachelor’s degree who received Pell Grants, according to Kantrowitz’s own calculations.
“If adopted, [the proposed cuts] would require millions of enrolled students to drop out or take on more debt to complete their degrees — likely denying countless prospective low- and moderate-income students the opportunity to go to college altogether,” Sameer Gadkaree, president and CEO of The Institute for College Access & Success, said in a statement.  
Already, those grants have not kept up with the rising cost of a four-year degree. Tuition and fees plus room and board for a four-year private college averaged $58,600 in the 2024-25 school year, up from $56,390 a year earlier. At four-year, in-state public colleges, the average was $24,920, up from $24,080, according to the College Board.

The Pell program functions like other entitlement programs, such as Social Security or Medicare, where every eligible student is entitled to receive a Pell award.
However, unlike those other programs, the Pell program does not rely solely on mandatory funding that is set in the federal budget. Rather, it is also dependent on some discretionary funding, which is appropriated by Congress.
The Congressional Budget Office projected a shortfall this year in part because more students now qualify for a Pell Grant due to changes to the financial aid application, and, as a result, more students are enrolling in college.

Cutting the Pell Grant is ‘extreme’

Although there have been other times when the Pell program operated with a deficit, slashing the award amount is an “extreme” measure, according to Kantrowitz.
“Every past shortfall has been followed by Congress providing additional funding,” he said. “Even the current House budget reconciliation bill proposes additional funding to eliminate the shortfall.”

However, the bill also reduces eligibility for the grants by raising the number of credits students need to take per semester to qualify for the aid. There’s a concern those more stringent requirements will harm students who need to work while they’re in school and those who are parents balancing classes and child care.
“These are students that could use it the most,” said the University of Chicago’s Turner.
“Single parents, for example, that have to work to cover the bills won’t be able to take on additional credits,” Mayotte said.
“If their Pell is also reduced, they may have to withdraw from school rather than complete their degree,” Mayotte said. More