What is a Pell Grant
A Pell Grant is a Federal program which awards money to eligible, low-income undergraduate students so that they may attend a post-secondary institution. Post-secondary schools include universities, colleges, or trade and additional schooling which happens after graduation from high school. Unlike other Federal financial aid, The Federal Pell Grant Program does not require repayment of the grant funds.
Pell Grants are need-based grants which provide low-income students access to post-secondary education. All students wishing to receive a Pell Grant must complete a Free Application for Federal Student Aid (FAFSA®). The application may be filled out online and will require financial and tax information of the student and the student's family. All schools selected during the application process will receive an electronic copy of the application.
Calculation of Pell Grant Amounts
The financial aid counselors at the post-secondary school determine the total dollar amount a student may claim from the entire value of the Pell Grant. Their calculations use the difference between expected family contribution (EFC) and the cost of Attendance (COA) to arrive at the grant amount of need-based funds.
- Expected family contribution (EFC) looks at the student and family's taxed and untaxed income and other assets such as Social Security benefits and investment accounts
- Cost of Attendance (COA) includes the fees and tuition for the school as well as the cost of books, room, board, and other expenses
The financial aid counselors may also consider help which comes from other sources such as scholarship programs and loans when determining the level of the Pell Grant funding. In certain situations, post-baccalaureate students may also receive a Pell Grant.
Getting Pell Grant Funds
Students may receive Pell Grant funding from only one school at a time. Higher education institutions which participate in the Federal Pell Grant Program may credit the Pell Grant to the student's school account or pay the student directly, typically by check. The school must release funds at least once per term. The term varies by school and can be a semester, trimester or quarter. If the selected post-secondary school does not have defined attendance terms, the grant funds release at least twice per school year.
As of July 2017, Pell Grants are available year-round. Initially, Pell Grants did not cover summer sessions which affected thousands of students. President Donald Trump signed the federal spending bill in May 2017 which restored the year-round use of the funds. However, not all colleges and universities accept Pell Grants. To date, more than 5,400 post-secondary schools participate in the program. During the academic year, between July 1, 2018, and June 30, 2019, the grant amount increased to $6,095, according to the U.S. Department of Education.
Real World Example of Year-Round Pell Grants
In a 2017 press release, Justin Draeger, president and chief executive officer (CEO) of National Association of Student Financial Aid Administrators (NASFAA) said:
"Under year-round Pell, students who wish to pursue their degrees throughout the year will receive financial aid when they need it, rather than having to wait until the following semester, ultimately allowing them to complete their education more quickly so they can take on less debt and enter, or re-enter, the workforce more quickly,"