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Federal Pell Grant Vs. Stafford Loan: What’s the Difference?

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

When it comes to financing higher education, many different resources are available to students. The Federal Pell Grant and the Stafford Loan are two of the most common options. 

They are both government-funded and can be used to help pay for tuition, textbooks, and other college-related expenses. But what is the difference between the two? This article will explore the differences between the Federal Pell Grant and the Stafford Loan and how each can help you pay for college.

What Are Pell Grants?

The Federal Pell Grant Program provides need-based grants to students with exceptional financial needs. This grant money does not need to be repaid and can be used to help pay for tuition, textbooks, and other college-related expenses. The amount of the grant depends on the student’s financial needs and the cost of attendance at the college.

What Are Stafford Loans?

The Stafford Loan Program is a federal loan program that provides low-interest loans to students who need help paying for college. Unlike Pell Grants, Stafford Loans must be repaid with interest. However, they typically have lower interest rates than private loans.

Eligibility For Pell Grants And Stafford Loans

Eligibility For Pell Grants And Stafford Loans

Students must meet certain criteria to be eligible for either a Pell Grant or a Stafford Loan. These criteria include having a valid Social Security number, being a U.S. citizen or eligible noncitizen, and being enrolled in an eligible college program.

Who Is Eligible For A Pell Grant?

Students must demonstrate exceptional financial need to be eligible for a Pell Grant. This means the student’s family’s income and assets must be below a certain level. The exact amount varies yearly, so checking the current year’s requirements is important.

Who Is Eligible For A Stafford Loan?

To be eligible for a Stafford Loan, students must be enrolled at least half-time in an eligible college program. In addition, they must be a U.S. citizen or eligible non-citizen and must not be in default on any student loans.

Differences In Eligibility Requirements

The biggest difference between the two programs is the eligibility requirements. Pell Grants are need-based, so students must demonstrate exceptional financial need to qualify. On the other hand, students do not need to demonstrate financial need to qualify for a Stafford Loan.

Applying For Pell Grants And Stafford Loans

In order to apply for either a Pell Grant or a Stafford Loan, students must complete the Free Application for Federal Student Aid (FAFSA). The government uses this form to determine a student’s financial need and eligibility for federal student aid.

How To Apply For A Pell Grant

To apply for a Pell Grant, students must complete the FAFSA and submit it to the college’s financial aid office. Once the FAFSA is complete, the college’s financial aid office will determine the student’s eligibility for the Pell Grant.

How To Apply For A Stafford Loan

To apply for a Stafford Loan, students must complete the FAFSA and submit it to the college’s financial aid office. Once the FAFSA is complete, the college’s financial aid office will determine the student’s eligibility for the Stafford Loan.

Comparing Costs Of Attending College With Pell Grants And Stafford Loans

When it comes to comparing the costs of attending college, the Pell Grant and the Stafford Loan offer different advantages. The Pell Grant is a need-based grant, so students must demonstrate exceptional financial need in order to qualify. The Stafford Loan, on the other hand, does not require a student to demonstrate financial need but does require repayment with interest.

Federal Pell Grant vs. Stafford Loan: Conclusion

The Federal Pell Grant and the Stafford Loan are two of the most popular options for financing higher education. They both offer different advantages and can be used to help pay for college. However, it is important to understand the differences between the two and how they can help you pay for college.

If you are interested in more articles like this, here’s one about student grants for the residents of California.

Need more resources on the difference vs. Pell Grant to other grants? Check out our article about FAFSA vs. Pell Grant to learn more.

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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