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What Is a Pell Grant?

A is a form of financial aid provided by the U.S. Department of Education. Primarily available to undergraduate students, this grant money can be used for tuition, fees, room and board, and other expenses related to a student's college education.

Like other grants, as well as scholarships, a Pell Grant does not have to be repaid as long as recipients meet the requirements for retaining the funds. However, if recipients withdraw from courses, fail to make academic progress, or change enrollment status — for example, changing from a full-time student to a part-time schedule — after receiving the award money, they may be required to repay the grant.

Other Types of Federal Financial Aid

Pell Grants are just one type of financial aid funded by the federal government. Some students may also be eligible for one of several other grant programs, such as the Federal Supplemental Educational Opportunity Grant (FSEOG), the Teacher Education Assistance for College and Higher Education (TEACH) Grant, and the Iraq and Afghanistan Service Grant. Each has its own eligibility , and they generally do not have to be repaid except under certain circumstances. 

Some students may also choose to participate in work-study programs in order to earn hourly wages to put toward college tuition. These wages also do not have to be repaid.

Additionally, the federal government offers student loans to help college enrollees pay for their education. With federal student loans — as opposed to private student loans — students can borrow money at relatively low interest rates and repay the loans over time, following one of many different repayment plans. Student loans are not typically forgiven, although graduates who later assume public service jobs may have some or all of their student loans forgiven through Public Service Loan Forgiveness (PSLF) or a similar program.

Pell Grant Eligibility

You must meet several eligibility criteria to receive a Pell Grant. Perhaps the most important of these is exceptional financial need. To determine your need, the U.S. Department of Education uses the financial information you provide on the Free Application For Student Aid (FAFSA) to calculate your Expected Family Contribution (EFC). This number is then compared to the cost of attendance for your school, which includes tuition, books, supplies, and other fees, as well as room and board for resident students. 

If your EFC — the amount you or your family can afford to contribute to your education — is lower than your school's cost of attendance, you may receive an offer of financial aid. Your offer can be a combination of several types of aid, including grants, scholarships, and loans. If the difference between your EFC and the cost of attendance is significant, your offer may include a Pell Grant. However, if your EFC is close to or exceeds the cost of attendance, the Pell Grant income limits will prevent you from getting aid from this program.

Financial need is not the only factor, however. The following are additional criteria:

• You must be an undergraduate earning your first degree or certificate unless you are currently earning your teaching certificate.

• You may not have previously earned a bachelor's, master's, or professional degree.

• You must be enrolled in or have been accepted into an eligible degree or certificate program as a regular student.

• You must have earned a high school diploma or its equivalent.

• You must be a U.S. citizen or an eligible noncitizen.

One final criterion pertains to students who are incarcerated in a federal or state correctional facility or who have been convicted of certain crimes. Currently, these students are not eligible for Pell Grants, but this stipulation is scheduled to change on July 1, 2023, when incarcerated students enrolled in eligible educational programs may qualify for grant awards.

How to Apply For a Pell Grant

To apply for a Pell Grant, along with most other types of financial aid, you just need to complete the FAFSA, either online or on paper. The form asks several questions about your or your family's income, taxes, and so forth. 

Based on the information you provide, the U.S. Department of Education and financial aid counselors from the school you attend or those you've applied to will decide whether you qualify for aid. If so, they'll also determine how much and what types of financial aid you should get. You will receive a letter from each school you've applied to or the school you attend that details your financial aid offer.

Officially, the deadline for submitting the application is June 30, but you may want to submit your form as early as possible. Since the same application is used for most types of aid — some of which run out before all applications have been considered — submitting the form early may help you obtain additional funding. Note that some states and colleges also have earlier FAFSA deadlines, so be sure to check with your school or schools for the correct deadlines. 

If your or your family's income changes after you've already submitted your FAFSA, be sure to submit an appeal. For example, if you or one of your parents loses their job or your family suddenly has unexpected medical expenses, it may change your eligibility for a Pell Grant and other aid, or it may result in a larger award.

Keep in mind that you will need to reapply for financial aid for each academic year by submitting a new FAFSA. Here again, you or your family's financial situation may change over time, which could affect your eligibility and the award amounts you receive from year to year.

Receiving a Pell Grant

Assuming you're eligible for a Pell Grant, it's important to understand how these grants are determined and disbursed.

Awards and Limits

Although a Pell Grant will certainly help with education costs, it's unlikely that the grant alone will cover your expenses entirely. Increases in Pell Grant awards have not kept pace with rising education costs. Today, these grants typically cover only one-third of the cost of attendance. 

Th amount you receive will vary annually. Each year, your award amount will be calculated based on four factors: your EFC, your school's cost of attendance, whether you're a full-time or part-time student, and whether you plan to attend school for a full academic year. 

Under certain circumstances, you may be eligible for 150% of your award amount through a "year-round Pell." In this situation, you'd receive 100% of your award amount for the two semesters in the typical academic year, plus 50% of your award amount to be used for the summer semester.

Not only is there a cap on the amount of Pell Grant funds you can receive each year, but there is also a limit on how often you can get this grant. Currently, enrolled undergraduates can only receive Pell Grants for 12 semesters or six years.

Disbursement

Your Pell Grant award is meant to be used for the entire award year, meaning July 1 to the following June 30. The money itself will come from your college or university, but it may be disbursed to you in several different ways. Your school may distribute your funds in two equal payments — one for each semester — or in monthly installments. Also, your school may transfer the funds to you directly, or it may deposit the award money into your student account. All of these details will be laid out in your financial aid letter.

In the unlikely event that you still have some funds left at the end of the semester, you will probably receive a credit that you can use to purchase books and cover other education expenses.

Questions About Pell Grants