September 25, 2019 By College Ave Student Loans
What is a Pell Grant?
In 2020, nearly 7.3 million students are expected to receive Pell Grant money to pay for college. That means that nearly 39 percent of undergraduate students receive the award. (U.S. Department of Education) It’s the largest government-funded grant, designed to help students with financial need pay for college.
Here are all the answers to your question: What is a Pell Grant? (And how do you get one?)
Grants are a type of financial aid that helps students pay for college. Like scholarships—they’re free money that doesn’t need to be repaid after you graduate. Most grants come from your school, private sources, your state government, or the federal government. Federal programs like the Pell Grant come directly from the U.S. Department of Education. Students need to demonstrate financial need in order to qualify.
Students can use grants to pay for college expenses, such as tuition and fees, textbooks, room and board, and any other education related costs like transportation and school supplies.
The Pell Grant is just one federal grant program. Here are some of the other grants offered by the U.S. Department of Education:
- Federal Supplemental Educational Opportunity Grants (FSEOG) – For undergraduate students with exceptional financial need.
- Teacher Assistance for College and Higher Education Grants (TEACH) – For undergraduate, post-baccalaureate, or graduate students who will fill a teaching position in an area of need.
- Iraq and Afghanistan Service Grants – For students who lost a parent or guardian as a result of military service in Iraq or Afghanistan after the events of 9/11.
If you think you may meet the requirements for the Pell Grant? Here’s how to see if you qualify.
How to Qualify for a Pell Grant
Since Pell Grants are federal funds that are awarded based on financial need, you’ll need to fill out the FAFSA (Free Application for Federal Student Aid) to qualify. The FAFSA is a free online form that will determine your eligibility for all federal financial aid for college.
Once you qualify for a Pell Grant, the amount of aid you receive will depend on the information you provided on the FAFSA.
How Much Money will I get from the Pell Grant?
For the 2019-2020 school year, the Pell Grant maximum is $6,195 per student, per year.
Maximum Pell Grant awards change annually according to government budgeting. There are many factors that will dictate the amount you get, like whether you’re a full-time or part-time student, or if you plan on attending school for the full year or just one semester. The two most important factors in determining your eligibility and amount are your Expected Family Contribution (EFC) and the cost of attendance at your chosen school.
The EFC is a formula that uses the information you provide on the FAFSA. It evaluates your family’s income, assets, and benefits, along with your family size and how many people are going to college at once. To establish your financial need, the government then compares your EFC to the cost of attendance (COA) at your school. The COA is determined by your school and includes all the expenses at your school for one year such as tuition and fees, room and board, books, supplies, and transportation. (Federal Student Aid)
You can estimate the amount of money you’ll receive using the free FAFSA4caster tool. It’s an interactive tool that lets you add any other aid you’ve received to paint a complete picture of your financial aid package. In addition to your Pell Grant estimation, you can see a predicted federal work-study amount (based on the average), and maximum Direct Subsidized Loan and Direct Unsubsidized Loan awards.
Here is an illustration of the average Pell Grant awards by income level in the 2017-2018 award year.
Source: U.S. Department of Education
The government also offers another way to increase your grant amount. Established through the 2017 Consolidated Appropriations Act, the “year-round Pell” provision says that students who complete more than one academic year (more than two semesters, for example) within an award year can receive up to 150% of the regular award. About 762,000 students received an additional $1,500 through this provision in the 2017-2018 award year.
How Do I Get My Pell Grant Money?
While the government will determine how much money you get, your school will be the one to distribute your Pell Grant money. First, you’ll receive your financial aid award letter, which will give you the details of your entire financial aid package, including the Pell Grant if you qualify. The full grant amount will cover the entire academic year and may be split into at least two payments, called disbursements. At schools with two semesters, you’ll get two disbursements, each at the beginning of the new semester.
Your college will usually apply the grant money toward your tuition, fees, and room and board first. If there is money left over, you will either get a credit to your school account or receive a refund check or direct deposit. (Federal Student Aid)
The federal Pell Grant is one of the many ways students and families pay for college. It’s free funding that comes directly from the government. The most important thing for you to do is apply using the FAFSA and wait to see if you’re eligible.
Looking for more ways to pay for college? Check out How to Pay for College: 6 Ways to Cover Your Costs.
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