What Is a Pell Grant – And How Do You Apply?
College students who struggle to afford tuition and other expenses have an avenue to help pay for their education that doesn’t involve federal loans: the federal Pell Grant.
To qualify for a Pell Grant, you need to have a minimum GPA (2.0) and demonstrate exceptional financial need.
If you fit in those categories, here’s what you need to know.
What Is a Pell Grant?
A Pell Grant is a form of federal student financial aid that, unlike a loan, doesn’t need to be repaid. The U.S. Department of Education awards federal Pell Grants to low-income students who qualify. The grants cover tuition, room and board, and other educational fees and expenses.
The Pell Grant is a need-based program that, unlike federal student loans, never has to be repaid. With total student loan debt in the U.S. reaching nearly $1.75 trillion in 2022 affecting more than 43 million borrowers, this federal grant is an attractive alternative for students who qualify.
Created in 1972, it is named after U.S. Sen. Claiborne Pell of Rhode Island and is the largest education grant program offered by the federal government.
Like other federal student aid options, to apply for a Pell Grant students need to fill out the Free Application for Federal Student Aid (FAFSA) form.
Who Is Eligible for a Pell Grant?
Pell Grant funds are available at 6,000 educational institutions in the country. To be eligible, you must:
- Demonstrate “exceptional financial need” on the FAFSA application.
- Be a U.S. citizen or eligible non-citizen.
- Have yet to receive a bachelor’s, graduate, or professional degree.
- Maintain a minimum GPA of 2.0. Note: Individual institutions may have different GPA requirements.
Students with a parent who died in the line of duty – as a military veteran or public service officer – may also be eligible if they are under 24 and enrolled at least part-time in a college or career school.
Graduate students aren’t eligible for the Pell Grant, though some students working on a post-baccalaureate teacher certification may qualify.
Incarcerated individuals may be eligible for aid through the Second Chance Pell experiment – created in 2015 by the Obama administration to provide “education opportunities for thousands of justice-involved individuals who have previously been unable to access federal need-based financial aid.” The program expanded in the 2022-23 school year to include 200 colleges and universities now offering their prison education programs with support from the Pell Grant program.
Students unable to finish studies due to the closing of their school or who received the Borrower Defense Loan Discharge may also be eligible.
Grant recipients risk losing eligibility if they withdraw from courses, change enrollment status, or fail to meet their college or university’s GPA requirements.
How Much Money Can I Receive From a Pell Grant?
Individual grant amounts depend on a student’s Expected Family Contribution (EFC), an index number that determines eligibility for federal student aid. The number originates from the financial information provided when you complete the FAFSA.
Federal student aid administrators also factor in your school’s cost of attendance and your enrollment status.
As of the 2021-22 school year, the minimum Pell Grant award a student can receive is $650 per year (July 1 to June 30) and the maximum is $6,495. Your EFC number will determine where you fall in that range.
Also, you’ll need to reapply for the grant using the FAFSA every academic year, meaning your Pell Grant aid can change annually based on your current financial situation.
You can also apply for the “year-round Pell Grant” if you attend summer school. In this situation, you would be eligible for the same award amount you received in the fall and spring. So if your annual award amount is $4,000, and you’ll receive $2,000 in the fall, $2,000 in the spring – then you would be eligible for an additional $2,000 if you attend summer school.
Colleges and universities disburse the award funds into the student’s account balance and are reimbursed by the federal government. The timing of the disbursement varies by institution – some may make monthly payments while others might distribute all of the funds before classes begin.
How Do I Apply for a Pell Grant?
The application process is simple enough. To apply for a Pell Grant, students must fill out the Free Application for Federal Student Aid form (FAFSA). From there, financial aid administrators will determine whether the student is eligible and, if so, set the Pell Grant award amount.
The numbers say that more than 2 million students would have been eligible for the Pell Grant in the 2015-2016 school year, but they didn’t fill out a FAFSA. Further, 1.2 million would’ve qualified for the maximum Pell Grant amount.
The takeaway: Always fill out a FAFSA! You never know what you could be eligible for.
Other FAQs About Pell Grants
A federal Pell Grants is just that – a grant. It’s not a loan so you don’t need to pay it back – with a few caveats. If you withdraw from courses, change your enrollment status, or fail to meet GPA requirements after having received your award, you may have to pay it back. That could also have tax implications, so it’s not a good idea all around.
The maximum amount of awards you can receive is six years, or the equivalent of 12 semesters’ worth of Pell Grants. You’ll need to reapply for them annually via the FAFSA.
No. The FAFSA is simply a form you fill out when applying for federal student aid programs – everything from federal student loans, work-study and grants, including the Pell Grant.
Robert Bruce is a senior writer for The Penny Hoarder.
