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How Does A Pell Grant Work?

Written by: Jody Adams
Last updated: January 31, 2024

Families considering college affordability should remember that federal Pell Grants constitute the first financial aid available to students with exceptional financial needs. Pell Grants are a great way to fund your college education without the burden of student loans. But how exactly do they work? 

In this blog post, we'll discuss the basics of Pell Grants, including eligibility criteria and how to apply. We'll also provide tips to help you maximize your grant and make the most of your college experience. 

Pell Grant: Determining Eligibility

Pell Grant: Determining Eligibility

A Pell Grant is a type of need-based financial aid the federal government provides to help low-income students pay for college. It is named after former Senator Claiborne Pell, who helped establish the program in 1972. Unlike a loan, a Pell Grant does not need to be repaid.

To be eligible for a Pell Grant, you must meet certain criteria. First, you must be a U.S. citizen or an eligible noncitizen. Second, you must demonstrate financial need, determined by the Expected Family Contribution (EFC) calculated from your Free Application for Federal Student Aid (FAFSA). Third, you must be enrolled in an undergraduate degree or certificate program at an eligible institution. Finally, you must not have already earned a bachelor's or professional degree.

How Does a Pell Grant Work?

If you are eligible for a Pell Grant, the amount you receive is determined by a combination of factors, including your EFC, the cost of attendance at your school, and whether you are enrolled full-time or part-time. The Pell Grant is awarded for each academic year, and you may receive it for up to 12 semesters or the equivalent.

Maximum Award Amounts

The maximum award amount for the Pell Grant changes each year. The maximum award amount for the 2021-2022 academic year is $6,495. However, not all students will receive the maximum award. The amount you receive depends on your financial need and the cost of attendance at your school.

Cost of Attendance and Family Contribution

The school's financial aid office determines the cost of attendance at your school and includes tuition, fees, books and supplies, room and board, transportation, and personal expenses. Your EFC, calculated from your FAFSA, is subtracted from the cost of attendance to determine your financial need. Suppose your financial need exceeds the maximum Pell Grant award. In that case, you may be eligible for additional financial aid, such as a Federal Supplemental Educational Opportunity Grant (FSEOG) or a subsidized Direct Loan.

Federal Student Aid Website

To apply for a Pell Grant, you must complete the FAFSA. The FAFSA is a free application available on the Federal Student Aid website. The FAFSA collects income, assets, and family size information to determine your EFC. You must submit a new FAFSA each academic year to be considered for financial aid.

Applying for the Pell Grant Program

When you complete the FAFSA, you will be asked if you want to be considered for a Pell Grant. If you answer yes, your information will be sent to the schools you list on the FAFSA. Your school will use the information to determine your eligibility and the amount of your Pell Grant award. You will receive a Student Aid Report (SAR) from the Department of Education with your EFC and Pell Grant eligibility information.

Benefits of Receiving a Pell Grant

Receiving a Pell Grant can provide many benefits to students. 

  • It can help cover the cost of college, which can be a significant burden for low-income families.
  • It can also help reduce the student loan debt you must take on to pay for college. 
  • Receiving a Pell Grant can open up opportunities for academic and career success. Studies have shown that students who receive Pell Grants are more likely to graduate from college.

Money for College Costs and Expenses

The Pell Grant can pay for various college costs and expenses, including tuition, fees, books and supplies, room and board, transportation, and personal expenses. The grant money is typically paid directly to your school and is first applied to any outstanding tuition and fees. If there is any remaining money, it will be refunded to you, either by check or direct deposit.

Leftover Money to Use as You Wish

If you receive more Pell Grant money than is needed to cover your tuition and fees, you can use the leftover money to pay for other expenses related to your education. For example, you could use the money to buy a laptop, pay for transportation to and from school, or cover the cost of study abroad programs. However, it's important to use the money wisely and avoid unnecessary expenses, as you may need to use some of the money to pay for future college expenses.

Professional Degree Opportunities with a Pell Grant

In addition to undergraduate degrees, the Pell Grant can also help pay for professional degree programs, such as law or medicine. However, there are some restrictions on using the grant for professional degrees. For example, the grant cannot be used to pay for a degree not necessary for your career goals or for a degree already covered by another program, such as the Health Professions Student Loan (HPSL) or the Primary Care Loan (PCL) program.

Pell Grants As An Important Source Of Financial Aid

The Pell Grant is an important source of financial aid for low-income students who want to pursue higher education. It provides students with money to cover college costs without the burden of repayment. Receiving a Pell Grant can provide many benefits, including reducing the student loan debt you must take on, opening up opportunities for academic and career success, and providing money for college costs and expenses. If you are eligible for a Pell Grant, apply by completing the FAFSA each academic year. With the help of a Pell Grant, you can achieve your academic and career goals and build a brighter future for yourself and your family.

Discover more financial aid options to further your education with our Gov Relations resource on scholarships for single mothers.

Jody Adams
Jody Adams is an accomplished editor-in-chief with a deep understanding of social care and government benefits issues. With a background in journalism and a master's degree in Public Policy, Jody has spent her career shaping the narrative around social policies and their impact on society. She has worked with renowned publications, effectively bridging the gap between complex policy analysis and public understanding. Jody's editorial expertise ensures that vital information on social care and government benefits reaches a broad audience, empowering individuals to make informed decisions.
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