The Pell Grant Preservation and Expansion Act of 2026 aims to strengthen the Federal Pell Grant program, making it a more reliable and substantial source of financial aid for postsecondary education. A central provision of this bill is the incremental increase of the maximum Federal Pell Grant award, starting at $10,000 for award year 2026-2027 and reaching $15,000 by 2031-2032 , after which it will be adjusted annually based on the Consumer Price Index. Crucially, the program would transition from discretionary to a fully mandatory funding structure , ensuring consistent appropriations from the Treasury. The bill significantly broadens eligibility for federal financial aid. It extends Federal Pell Grant eligibility to "Dreamer students," defined as certain non-citizens who entered the U.S. as minors and meet specific educational or military service criteria, or were eligible for deferred action programs. Furthermore, the legislation restores Pell Grant access for students whose non-federal grants and scholarships previously made them ineligible, by repealing a prior restriction. For students demonstrating the highest financial need, specifically those with a Student Aid Index (SAI) less than zero, the bill provides for an increased Pell Grant award that exceeds the maximum by the negative SAI amount. It also establishes a special rule that automatically assigns an SAI of -$1,500 to recipients of means-tested federal benefits, or their parents/spouses, simplifying access for these vulnerable populations. The total duration of Pell Grant eligibility is also expanded from 12 semesters to 18 semesters , offering more time for students to complete their education. To reduce financial aid penalties, the bill revises institutional policies for Satisfactory Academic Progress (SAP) . It introduces new statuses like "financial aid warning" and "financial aid probation" to provide students with opportunities to correct academic deficiencies before losing aid. A key reform allows students who have been out of school for at least two years to have their SAP eligibility "reset" up to two times, enabling them to re-enroll without past academic issues immediately impacting their aid. Institutions are also required to provide clear SAP policies and notifications to students.