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Pell Grants: What It Is, How to Apply, and Examples

Last updated 03/19/2024 by

Alessandra Nicole

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Fact checked by

Pell Grants are crucial federal financial aids for students with demonstrated financial need in pursuing higher education, offering funds that do not require repayment in most cases. To qualify, students must complete the Free Application for Federal Student Aid (FAFSA), with the amount awarded determined by a school’s financial aid office and based on various factors such as family income, expenses, and the cost of attendance. Pell Grants are just one component of federal financial aid, supporting eligible undergraduates to cover education costs. The program is named after Senator Claiborne Pell, a staunch advocate for higher education accessibility.

What is a Pell grant?

Understanding federal financial aid for students

A Pell Grant stands as a need-based federal aid program for students pursuing post-secondary education. In contrast to loans, Pell Grants don’t typically require repayment. These grants aim to assist eligible students with financial constraints in affording higher education, covering costs such as tuition, books, and living expenses.

How a Pell grant works

Application process and determining eligibility

To apply for a Pell Grant, students and parents complete the Free Application for Federal Student Aid (FAFSA), providing information about family finances. Financial aid officers at respective schools use this data to calculate a student’s Expected Family Contribution (EFC) against the Cost of Attendance (COA) to assess the need for aid.

Financial aid awarding and utilization

Once the school determines eligibility, it offers a combination of aid, including Pell Grants, subsidized/unsubsidized loans, and work-study opportunities to bridge the financial gap between EFC and COA. The aid offer is usually made in conjunction with the acceptance letter from the college.

Eligibility and duration

Primarily available to undergraduates, Pell Grants have certain limits and duration. Eligibility typically ceases upon degree completion or when the Lifetime Eligibility Used (LEU) reaches its maximum.

Pell grant maximums and other limits

Grant amounts and terms

For the 2023–2024 school year, the maximum annual Pell Grant is $7,395, and the total lifetime limit extends to 12 terms or approximately six years. The government monitors the Lifetime Eligibility Used (LEU) while a student receives Pell Grants.

Policy changes and impacts

Notable policy changes, like those proposed in President Biden’s federal student loan plan, aim to alleviate debt burdens. However, certain rulings or changes in legislation, such as the Supreme Court’s decision on loan forgiveness, can affect these plans.

Other federal grants for education

Diverse federal aid programs

Besides Pell Grants, the federal government supports various aid programs, including the Federal Supplemental Educational Opportunity Grants (FSEOG), TEACH Grants, and Iraq and Afghanistan Service Grants, each catering to specific educational needs and criteria.

How do you stay eligible for Pell grants?

Maintaining eligibility and satisfactory academic progress

Continued eligibility for Pell Grants necessitates the annual submission of the FAFSA and maintaining satisfactory academic progress according to the school’s standards. Any default on student loans might lead to temporary loss of eligibility.

What happens to unused Pell grant money?

Allocation and disbursement

Unused Pell Grant funds usually go toward tuition and related expenses, with any excess, known as a “credit balance,” paid directly to the student within a specified timeframe, unless the student authorizes the funds for future use.

Do you have to pay back Pell grants?

Grants and repayment scenarios

Typically, Pell Grants, akin to scholarships, do not require repayment. However, certain circumstances like program withdrawal or altering enrollment status might necessitate partial or full repayment. The school notifies students of any owed amounts and the repayment process.

Who was Pell?

Legacy of Claiborne Pell

Pell Grants are named in honor of U.S. Senator Claiborne de Borda Pell of Rhode Island, a passionate proponent of expanding educational opportunities, particularly for students with financial need.
Here is a list of the benefits and drawbacks to consider.
  • Do not require repayment in most cases
  • Support students with financial need
  • Help cover educational expenses
  • Aim to make higher education accessible
  • Subject to eligibility criteria
  • Lifetime limits on funding
  • Dependent on federal regulations
  • Reduction due to policy changes

Frequently asked questions

What is the eligibility criterion for Pell grants?

The eligibility for Pell Grants is primarily determined by the Expected Family Contribution (EFC) calculated from the Free Application for Federal Student Aid (FAFSA). The school evaluates this against the Cost of Attendance (COA) to assess the financial need of the student.

Are Pell grants only available to undergraduates?

Typically, Pell Grants are aimed at supporting undergraduate students. However, there are exceptions for certain post-baccalaureate teacher training programs.

Is there a limit to the number of terms or years one can receive Pell grants?

Yes, there is a limit. For the 2023–2024 school year, the maximum lifetime limit is 12 terms or approximately six years of funding.

Can students lose their eligibility for Pell grants?

Yes, students might temporarily lose eligibility if they default on a student loan or fail to maintain satisfactory academic progress, as defined by the school.

What happens if there is unused Pell grant money?

Any remaining Pell Grant funds after covering tuition and related expenses are disbursed to the student. This excess, termed a “credit balance,” should be paid to the student within a specified timeframe unless authorized for future expenses.

Do students have to repay Pell grants?

Under most circumstances, Pell Grants, like scholarships, do not need to be repaid. However, certain scenarios, such as withdrawing from a study program or changes in enrollment status, might require partial or full repayment.

Who was Senator Claiborne Pell?

Senator Claiborne de Borda Pell was an advocate for expanding educational opportunities, especially for students facing financial constraints. Pell Grants are named in his honor.

Key takeaways

  • Pell Grants offer need-based federal aid for higher education without requiring repayment in most cases.
  • Eligibility and grant amount are determined by FAFSA data and school evaluations based on financial need.
  • There are limits to the total amount and duration of Pell Grants a student can receive.
  • Policy changes and rulings may impact federal student aid programs.

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