When discussing how to pay for college, many parents and students alike get excited by the idea of scholarships. It means you are a high-achieving student, and it’s money you won’t need to pay back. While scholarships are certainly worthy of celebration, did you know that there are many federal grants for which you may be eligible, that also won’t have to be repaid?
One of these grants is the federal Pell Grant, which is given out by the U.S. government. Because of its reputation as being a grant for low-income families, thousands of students each year who may qualify do not apply. This leads to a reported $2.9 billion in Pell Grant Funds in 2014 going unused due to low applicant numbers.
With all of that money on the table, it’s worth it for students to get to know more about a Pell Grant. How can it help pay for school, and potentially lower the amount you have to borrow?
How Pell Grants work
Like other forms of federal, state, and school aid, students can apply for Pell Grants by filling out the Free Application for Federal Student Aid (FAFSA). Administered by the U.S. Department of Education, you’ll absolutely receive the full amount if you qualify each year, and Pell Grants are either paid to your school or paid out to you directly.
Pell Grants are given to students pursuing an undergraduate degree based on the Adjusted Gross Income (AGI) and Expected Family Contribution (EFC) reported by their family on their FAFSA.
Yes, most Pell Grant recipients are students with a household AGI of $50,000 or less, but depending on how many children in the family are in college at the same time, students in families with higher AGI can qualify for more grant dollars than they were previously aware of.
Unlike student loans, Pell Grants do not have to be repaid. So, yes, it’s basically free money — and you might be missing out by not applying!
How much can I qualify for?
The maximum amount students can receive in Pell Grants changes annually, but for the 2016-2017 school year the max is $5,815. This is an increase from the amount in 2014 and 2015. Students may or may not receive the maximum award depending upon a few factors, namely:
- Total financial need
- Cost of attendance at desired institution
- A student’s status (either full- or part-time)
- How long you’ve been in school (you can only receive Pell Grants for a total of 12 school semesters, or roughly six years.)
It is also worth noting that if your parent or guardian died in combat in Iraq or Afghanistan, or during the events of 9/11, you may be eligible to receive additional Pell Grant Funds, regardless of your family’s income.
What determines Pell Grant eligibility?
Technically everyone is eligible, although it is only given to students with legitimate financial need. There are, however, a few Pell Grant qualifications you must meet. These grants are only given to students who:
- Have completed a Pell Grant application
- Have not previously received a Bachelor’s degree
- Have received a high school diploma or GED
- Are registered to attend a higher education institution that will accept a federal Pell Grant as payment
Non-U.S. citizens and convicted felons are ineligible to receive funds.
Each year federal Pell Grant funds are left unused because students who feel they may not meet the Pell Grant requirements do not take the time to fill out the FAFSA, or they do not complete the FAFSA on time.
With the cost of college still on the rise, and with more middle-class Americans applying for aid than ever, it makes sense to fully research your options either way. Completing a Pell Grant application is free and easy, so there’s no reason not to submit one. You never know how much you may qualify for until you apply!
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