The cost of college continues to rise. Tuition and fees alone averaged almost $10,000 a year for four-year public institutions in 2017-2018, according to the College Board. And that number didn’t include room and board, travel, and other costs.
One way to pay for school is with grants, including the Federal Pell Grant. Grants and scholarships are awards students don’t need to repay. Read on to find out what a Pell Grant is and how you can get one to help you pay for school.
What is a Pell Grant?
Pell Grants, and most other grants for college, are need-based, while most scholarships are merit-based. But both are free funds you don’t have to pay back — unlike student loans.
All incoming freshmen should complete a Free Application for Federal Student Aid (FAFSA). To remain eligible for Pell Grants and other forms of federal aid, you must fill out a FAFSA every year you’re in school. Your family’s income will be a big factor in determining how much aid you’ll receive from the government, including grants.
How to get a Pell Grant
After you fill out your FAFSA, you’ll be notified of your Expected Family Contribution (EFC) in your award letter, which also outlines how much aid you’ll receive from scholarships, grants, and loans. You’ll be considered for other federal grant programs when you complete the FAFSA, but the Pell Grant is one of the largest available.
While there’s no age limit, Pell Grants are awarded to undergraduate students who are enrolled at least part time. Your school can use your Pell Grant funds to pay you directly or apply them to your costs — or a combination of both.
Keep in mind that you can receive Federal Pell Grants for no more than 12 semesters (or about six years), but the Department of Education doesn’t say they have to be consecutive.
How to qualify for a Pell Grant
Pell Grants are awarded to students who demonstrate financial need. If you have greater need, you’ll be awarded more than someone who has the means to contribute financially to their education.
You don’t need to choose a particular school to qualify for a Pell Grant, but some colleges might offer their own awards in addition to any federal grants you receive.
How much money do Pell Grants award?
How much you’re awarded will depend on several factors:
- Your financial need
- Your school’s cost of attendance
- Whether you’re a full-time or part-time student
- Whether you plan to attend for a full academic year
The maximum Pell Grant award for the 2017-2018 school year was $5,920, according to the Department of Education. Amounts can change yearly, and if your status changes, so will your award amount.
Since the average cost of tuition and fees at a four-year public institution is nearly double the maximum Pell Grant award, you’ll probably need more than this one grant to pay for college. That’s OK. It’s common for students to use multiple resources to pay for college.
How to pay for college in other ways
Once you’ve exhausted your federal options, research grant opportunities at the state and institutional levels. Many scholarships are available as well. While most scholarships are based on merit, not need, you might be able to use them to find extra money for college. They can be as specific as scholarships for black women or as broad as scholarships for attending a certain school.
Loans also can help you pay for college. There are federal loans, such as the ones outlined in your award letter, and private student loans, which you can apply for in addition to any federal aid you receive. Your parents also can see if they qualify for Parent PLUS Loans to help cover your college costs.
There are many different and affordable ways to pay for college, so don’t limit yourself.
Need a student loan?Here are our top student loan lenders of 2019!
|2 Important Disclosures for College Ave.
College Ave Student Loans products are made available through either Firstrust Bank, member FDIC or M.Y. Safra Bank, FSB, member FDIC. All loans are subject to individual approval and adherence to underwriting guidelines. Program restrictions, other terms, and conditions apply.
(1)All rates shown include the auto-pay discount. The 0.25% auto-pay interest rate reduction applies as long as a valid bank account is designated for required monthly payments. Variable rates may increase after consummation.
(2)This informational repayment example uses typical loan terms for a freshman borrower who selects the Deferred Repayment Option with an 8-year repayment term, has a $10,000 loan that is disbursed in one disbursement and a 7% variable Annual Percentage Rate (“APR”): 96 monthly payments of $179.28 while in the repayment period, for a total amount of payments of $17,211.20. Loans will never have a full principal and interest monthly payment of less than $50. Your actual rates and repayment terms may vary.
(3)As certified by your school and less any other financial aid you might receive. Minimum $1,000.
Information advertised valid as of 5/22/2019. Variable interest rates may increase after consummation.
* The Sallie Mae partner referenced is not the creditor for these loans and is compensated by Sallie Mae for the referral of Smart Option Student Loan customers.
3 = Sallie Mae Disclaimer: Click here for important information. Terms, conditions and limitations apply.
4 Important Disclosures for Discover.
5 Important Disclosures for SunTrust.
Before applying for a private student loan, SunTrust recommends comparing all financial aid alternatives including grants, scholarships, and both federal and private student loans. To view and compare the available features of SunTrust private student loans, visit https://www.suntrust.com/loans/student-loans/private.
Certain restrictions and limitations may apply. SunTrust Bank reserves the right to change or discontinue this loan program without notice. Availability of all loan programs is subject to approval under the SunTrust credit policy and other criteria and may not be available in certain jurisdictions.
©2019 SunTrust Banks, Inc. SUNTRUST, the SunTrust logo and Custom Choice Loan are trademarks of SunTrust Banks, Inc. All rights reserved.
6 Important Disclosures for LendKey.
7 Important Disclosures for CommonBond.
A government loan is made according to rules set by the U.S. Department of Education. Government loans have fixed interest rates, meaning that the interest rate on a government loan will never go up or down.
Government loans also permit borrowers in financial trouble to use certain options, such as income-based repayment, which may help some borrowers. Depending on the type of loan that you have, the government may discharge your loan if you die or become permanently disabled.
Depending on what type of government loan that you have, you may be eligible for loan forgiveness in exchange for performing certain types of public service. If you are an active-duty service member and you obtained your government loan before you were called to active duty, you are entitled to interest rate and repayment benefits for your loan.
A private student loan is not a government loan and is not regulated by the Department of Education. A private student loan is instead regulated like other consumer loans under both state and federal law and by the terms of the promissory note with your lender.
If your private student loan has a fixed interest rate, then that rate will never go up or down. If your private student loan has a variable interest rate, then that rate will vary depending on an index rate disclosed in your application. If the interest rate on the new private student loan is less than the interest rate on your government loans, your payments will be less if you refinance.
If you don’t pay a private student loan as agreed, the lender can refer your loan to a collection agency or sue you for the unpaid amount.
Remember also that like government loans, most private loans cannot be discharged if you file bankruptcy unless you can demonstrate that repayment of the loan would cause you an undue hardship. In most bankruptcy courts, proving undue hardship is very difficult for most borrowers.
8 Important Disclosures for Citizens Bank.
Citizens Bank Disclosures
|3.99% – 11.32%2||Undergraduate, Graduate, and Parents|
|4.50% – 11.35%*,3||Undergraduate and Graduate|
|4.84% – 13.49%4||Undergraduate and Graduate|
|4.25% – 11.30%5||Undergraduate and Graduate|
|4.50% – 9.47%6||Undergraduate and Graduate|
|3.74% – 9.72%7||Undergraduate, Graduate, and Parents|
|4.45% – 12.32%8||Undergraduate, Graduate, and Parents|