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Pell Grants

Article on Pell Grants

The U.S. federal government’s student aid program offers a handful of grant opportunities to help post secondary students finance higher education. The Pell Grant is one such needs-based grant intended to help low-income students cover the cost of school. Grants, unlike loans, do not have to be repaid, and are thus the most coveted forms of federal aid. Obtaining a Federal Pell Grant also opens the door to potentially receiving other federal grant options, and for this reason, knowing the ins and outs of the acceptance process is crucial.

Eligibility

In order to be eligible to receive Pell Grants, students must demonstrate financial need and be attend one of the approximately 5,400 participating institutions. Eligible students may have family incomes up to $60,000, although most funding is distributed to students with family incomes below $30,000. Pell Grants can only be used for study towards a certificate, diploma, or degree. Funds are typically reserved for those students who have not yet received their bachelor’s degree, or who are enrolled in their first qualifying professional degree programs.

Application Process

As with all forms of federal aid financing programs, the first step in the application process involves filling out the Free Application for Federal Student Aid (FAFSA.) This can be completed in hard copy or online at the FAFSA website. Once completed, applicants will receive a Student Aid Report (SAR) notifying them if they are eligible to receive a Pell Grant. Once eligibility has been established, individual schools will calculate the award package for each student and distribute funds accordingly.

Award Amount

Pell Grants are based on a formula established by Congress. This formula depends on a number of factors including the price of attendance (of the applying institution), the family’s financial situation, family size, and whether enrolment is full-time or part-time. The maximum Pell Grant award for the 2010 – 2011 academic award year is $5,550. Students may receive up to two Pell Grant awards per year as long as the total award does not exceed the maximum award limit.

Distribution of Funds

Once awarded and accepted, federal funds are given directly to the school; schools then choose the most appropriate disbursal plan. Pell Grants can be applied directly to the students’ school account, the school can pay students (usually by check), or these methods can be combined. Funds must be disbursed at least once per term but can be distributed more frequently. Schools without terms, semesters, or trimesters must disburse funds at least twice per academic year.

The Federal Pell Grant is a need-based grant opportunity for those students demonstrating high financial need. This particular grant is considered the federal foundation grant, the most important to understand. This is because in order to qualify for any of the other federal grants, students must first prove eligibility for Pell Grant funding. Applying for grant funding is so important for low-income students because grant money, unlike loans, does not have to be repaid.