What You Need To Know About Educational Pell Grants

What You Need To Know About Educational Pell Grants

Updated October 5, 2020
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What You Need To Know About Educational Pell Grants

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The Federal Pell Grant may award you up to $6,345* per year for school if you qualify. Find out how you may qualify.

If you need help offsetting the cost of college, you may be eligible for federal grants*. If you qualify, you may not have to repay a grant if you graduate**. Grants are only awarded to those that meet the requirements of the program.

There are quite a few different grants available for college students today, but the most common (and generally applicable) is the Federal Pell Grant. You may receive up to $6,345* per year, but it depends on how much you qualify to receive. Not everyone receives the maximum amount – it's based on your need and when you apply.

What is the Pell Grant?

The Department of Education awards grants for education to students demonstrating exceptional financial need. The award is for undergraduate students and is dependent on several key factors:

  • The amount of your family's expected financial contribution towards your education
  • The cost of the school you will attend
  • Whether you attend school full-time or part-time

You can only receive Federal Pell Grant funds for one school at a time, and the funds are disbursed per semester (half in the fall and half in the spring).

In rare cases, it may be possible to receive 150% of the amount awarded – if you attend summer school and are approved to receive additional funds. For example, if you are awarded $1,000 per semester, you may receive a total of $3,000 rather than $2,000 for the year if you attend summer school.

While your grades aren't a critical factor in your eligibility for this funding program, some schools do set a minimum 2.0 GPA to be eligible. This may vary by school, so check with your school to find out.

How Much Can You Get?

The Department of Education will decide the amount of the grant award. It hinges on a few factors, such as which school you attend, the amount of your family's contribution, and whether you attend full-time, part-time, or year-round (including the summer).

In any case, the amount of the award is only finalized after you complete the Free Application for Federal Student Aid Application.

Schools use the following information when calculating your need:

  • Taxed income
  • Untaxed income
  • Assets
  • Benefits (social security, pension, etc.).
  • Your family size
  • How many college-aged students you have

The school also considers the cost of attendance at their school in the calculation. If it's determined that you have financial need, you may be eligible to receive up to $6,345*, but most students receive less than this amount.

If you are eligible for funds, the Department of Education will pay your school directly. The proceeds are primarily used for tuition, fees, and room and board. Any funds left over will be disbursed to you to cover other costs of attending school. If you receive money in this situation, you should use it toward books, living expenses, transportation, or other school-related expenses.

Completing Your Application

Each year, the Department of Education sets a deadline date in April for the next academic year. You must apply by the deadline to be considered for the Pell Grant. Since funds are finite, though, you should try applying as early as possible for the largest chance at receiving an award.

The application process is simple:

  1. Complete the Free Application for Federal Student Aid
  2. You'll receive an analysis of your application that includes your family's expected contribution. This analysis will also indicate whether you are eligible for a Pell Grant
  3. If you are eligible, you must respond quickly to accept the grant

How to Maintain the Grant

Once you're awarded the grant, it isn't automatically awarded again every year. You must reapply each year by completing the FAFSA again to show that you are still enrolled in school. If eligible, you can use the grant for a maximum of 12 semesters. Once you use up your benefit, you cannot reapply.

Do you Have to Repay The Funds?

The funds provided by the program do not have to be repaid if you graduate**, but that's only if you fulfill the promises made to obtain the grant. If you find yourself in any of the following situations, you may need to repay some or all of the grant:

  • You withdrew from the program that the DOE awarded the grant to you
  • You dropped classes that changed your enrollment from full-time to part-time
  • You received additional scholarships outside of the DOE that reduces your liability

Your school will let you know immediately if you must repay some or all of your grant. For example, if you went from full-time to part-time, you may have to repay the portion of the grant that covered the hours you are no longer attending school.

If your school does notify you that you must repay some or all of the grant, you have 45 days to do so. If you can't afford to repay it in full within that timeframe, you can request a payment plan. If you don't make good on your debt, you could lose your chance of future eligibility for DOE grants.

Checking Your Application Status

Once you complete the FAFSA, you should hear back within one to two weeks regarding your eligibility. If you don't hear back, you can check the status online on the FAFSA home page. Log in and click on the 'My FAFSA' tab to check your application's status and the possibility of obtaining a Pell Grant.

This program is just one way to get financial assistance for college. Since the funds are limited, this is one of those 'first-come, first-serve' scenarios where the earlier you apply, the higher your chances of getting an award become.

It is a need-based award as well, which the DOE takes into consideration when you complete your FAFSA, so higher income students likely will not qualify. Exhaust all your options for federal aid, as this can help decrease the amount of student loans you need to take out, helping you decrease college costs overall.

*https://studentaid.ed.gov/sa/types/grants-scholarships/pell **https://studentaid.gov/understand-aid/types/grants#why-repay-grant

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