DEFINITION of 'Pell Grant '

A pell grant is a program that awards money to eligible undergraduate and, in certain situations, post-baccalaureate students. Unlike other Federal financial aid, the The Federal Pell Grant Program does not need to be repaid. Pell Grants are needs-based grants that are intended to provide low-income students access to post-secondary education. Grant amounts are determined by the students' expected family contribution (EFC), the cost of attendance, whether the student is full- or part-time and whether or not the students attends a full academic year.

BREAKING DOWN 'Pell Grant '

Students can receive Pell Grant funding from one school at a time. Higher education institutions that participate in the Federal Pell Grant Program can 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 (semester, trimester or quarter), or at least twice per school year where semester, trimester or quarterly terms are not defined.

Year-Round Pell Grants

Pell Grants are available year-round, as of July 2017. But not all colleges and universities offer Pell grants. To date, more than 5,400 participate in the program. During the academic year of 2017-2018, the maximum Pell Grant award was $5,920, an increase of over $100 from the maximum amount during the 2016-2017 award year period, according to the U.S. Department of Education.

“The return of year-round Pell marks a step forward for many students pursuing a postsecondary degree, who were limited by the current Pell Grant program. The way the Pell Grant program is currently structured doesn’t work for nontraditional students—those who may have entered the workforce and then come back to school or those who don’t take the standard full course load every semester," stated Justin Draeger, president and CEO of the National Association of Student Financial Aid Administrators (NASFAA) in a 2017 press release. "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."

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