The Pell Grant program has a $2.7 billion shortfall heading into the coming fiscal year, according to new projections from the Congressional Budget Office.

The budget office said in June that the program would run a $11.4 billion surplus, though that assumption was based on a projected drop in financial aid applications for 2024 and 2025 as a result of issues with the rollout of the new Free Application for Federal Student Aid. Instead, postsecondary enrollment increased by nearly 5 percent, according to one recent estimate.

For fiscal year 2024, the Pell Grant program had a $3.6 billion surplus before running at a deficit in fiscal year 2025. The updated projections signal that Congress might have to find additional funding in its FY 2026 budget to make up the difference. Lawmakers have yet to adopt a budget for FY 2025.

CBO estimated that the Pell Grant program could end FY 2026 down by about $10 billion, if the funding levels don’t change.

“If program funding is not shored up, students could face eligibility or funding cuts for the first time in more than a decade,” the Institute for College Access and Success warned in a blog post about the projections.