What Is Pell Grant Program?
Excerpt
- What Is Pell Grant Program?
- Purpose of the Pell Grant
- Who Can Apply?
- Steps to Apply
- How Much Is the Pell Grant Award?
- Estimating Your Award
- Primary Factors Influencing the Pell Grant Award Amount
- Factors Not Directly Influencing the Award Amount
- Strategy for Parents to Avoid Disadvantage
- Options to Help Cover School Expenses
- Noteworthy Scholarships
- Conclusion
What Is Pell Grant Program?
The Pell Grant Program is a kind of financial aid, the U.S. Federal Government offers to help undergraduate students pay for their college expenses. Fortunately, you do not have to repay the Pell Grants unlike loans, which makes the Pell Grant a fine resource for students with financial need.
To apply, you should meet following criteria. You must be a U.S. citizen or an eligible non-citizen, who are also an undergraduate student, have not earned bachelor’s degree, graduate or professional degree before. In addition, You should be with financial need, which means that financial assistance from your family is not enough for school expenses. Whether you can meet this or not determined by the EFC calculated through FAFSA.
Purpose of the Pell Grant
The Federal Pell Grant is a kind of subsidy the U.S. Federal Department of Education provides for students who need it to pay for college. Hence, it gives financial assistance to low-income undergraduate students for access to college education.
Who Can Apply?
Financial Need This criteria explains the goal of the grant, which distributes the funds to whom is really need it. Financial need is determined by the Expected Family Contribution calculated through the Free Application for Federal Student Aid (FAFSA).
Enrollment Status You must be an undergraduate student who have not earned bachelor’s degree, graduate, or professional degree before. In certain cases, post baccalaureate students in teacher certification programs may also apply.
U.S. Citizenship Candidates must be a U.S. citizen or an eligible non-citizen.
Academic Progress Must maintain satisfactory academic progress in college or career school.
Enrollment Must be enrolled or accepted for enrollment as a regular student in an eligible degree or certificate program.
Steps to Apply
- Create FSA ID
- Complete the FAFSA
- Determine Eligibility
- Award Notification
- Additional Information
1. Create FSA ID
First of all, you need to make Federal Student Aid (FSA) ID, which can be used another student aid program. Visit https://studentaid.gov
2. Complete the FAFSA
Complete the Free Application for Federal Students Aid (FAFSA) at https://www.usa.gov/fafsa. You need following information to proceed. Social Security number, federal income tax returns, W-2s, bank statement, records of investments, records of untaxed income, and an FSA ID to sign electronically.
3. Determine Eligibility
After submitting the FAFSA, the authority will make a calculation of the Expected Family Contribution. In addition, review Student Aid Report (SAR), containing the information and indicating Pell Grant eligibility.
4. Award Notification
If you are eligible, the college’s financial aid office will send an award letter, which gives details about the amount of the Pell Grant funds awarded. Funds are generally distributed directly to the student’s account to cover tuition, fees, room, and board. Any remaining funds are disbursed to the student for the other educational costs.
Additional Information
The deadline for 2024-2025 academic year is June 30, 2024. Award amount varies annually. For the 2022-2023 award year and 2023-2024, the maximum award was $6,895 and $7,395, respectively. The exact amount awarded depends on the student’s financial need, cost for attendance, enrollment status, and length of academic year.
Contact Information
For more information or assistance, students can contact the financial aid office at their college or university, or visit the Federal Student Aid website.
How Much Is the Pell Grant Award?
Mentioned above, the maximum Pell Grant award for 2023-2024 award-year was $7,395. Unfortunately, not all students receive the maximum amount. The amount awarded depends on various factors such as the student’s Expected Family Contribution, cost of attendance, enrollment status, and whether the students attends for a full academic year or less.
Estimating Your Award
To estimate your probable Pell Grant award, use FAFSA4caster. It is available on the Federal Student Aid website, which offers an estimate based on your financial information. If you need help or details on information needed, consult your school’s financial aid office. They may give you a more precise calculation based on their cost of attendance and your specific circumstances.
For 2022-2023 academic year, while the ceiling of the Pell Grant was $6,895, most students got paid an amount of $4,140, roughly. It varied due to their financial need and other factors.
The most important factor to determine how much you receive the Pell Grant award is financial need. The Free Application for Federal Students Aid decide your financial need according to its procedure. There are other factors to affect your eligibility here.
Primary Factors Influencing the Award Amount
Expected Family Contribution, EFC
EFC is an evaluation of a family’s financial condition, estimated using financial information, you submitted in FAFSA. EFC contains parent’s assets and income, your assets and income, family size, and the number of family members who attend college.
Lower Expected Family Contribution typically means a higher award amount. In contrast, higher EFC generally results in lower award amount. According to the Federal Department of Education, 51% of the Pell Grant funds go to the students whose families annual income of less than $20,000. This group explains the majority.
Next were students whose families annual income falls between $20,001 and $50,000, which accounts for 39%. Last group come from students whose family earns more than $60,000. Those make up only 6%.
Cost of Attendance, COA
Cost of Attendance generally includes tuition and fees, room and board, books and supplies, transportation, and other personal costs. It can varies from a school to other school. The Pell Grant reflects this difference to certain extent in its award amount.
Students with higher Cost of Attendance can receive higher award amount. However, lower COA generally results in lower award amount.
Award Amount-to-COA ratio
| School Type | Cost of Attendance | % of COA covered by maximum award |
| Public 2-year (in-state prices, off-campus housing) | $20,803 | 31.2% |
| Public 2-year (In-state prices, living with family) | $11,320 | 57.4% |
| Public 4-year (In-state prices, living on campus) | $25,048 | 25.9% |
| Public 4-year (living on campus) | $43,873 | 14.8% |
Enrollment Status
Full-time students generally receive more amount of the Pell Grant than Part-time students. You should take at least 12 credits per semester to be enrolled as a full-time students.
Length of Enrollment
Students wha are enrolled for a full academic year typically receive more award amount than students enrolled for a partial academic year.
Factors Not Directly Influencing the Award Amount
Race
Race is not a factor influencing the Grant eligibility and the award amount. The federal program focuses solely on financial need of students and enrollment. Race is not the factor to consider.
Geographical Location
The town, city or state where a student live does not directly influence the award amount. However, the cost of attendance, which can vary by geographic location. So, location where a student live indirectly affects the award amount.
Every student is in different financial and family situation, students should consult with their school’s financial aid office to complete FAFSA. The office can offer specific details on students’ own circumstances.
Strategy for Parents to Avoid Disadvantage
Primary Concept
You can maximize the Grant eligibility by reducing income and assets for the base year. The term base year is the tax year prior to award year. Besides the award year refers to the school year for which you request the Grant. The financial need determination is based on financial information from the base year. So, lower income and assets for the base year generally result in higher eligibility and award amount. However, In this process, you should not use dishonest or illegal method to inform your financial situation.
Capital Gains from Investment
Stay away from incurring capital gains during the base year, which are regarded as income. Sell the investment assets like stocks and bonds during second academic year in high school. If you have to sell these investment assets while your child is in college, don’t do until April of third academic year after the financial aid application has been filed.
In contrast, you had better incur capital loss from bad investments during base year. This typically reduces Expected Family Contribution and increase award eligibility.
Spending from Retirement Fund
Avoid withdrawing money from retirement fund to pay for school expenses, which are sheltered from the financial need determination process. If you take too much money out of pension fund, or take the money before filing the financial aid application, it does mean you will have move them into an included assets. This action raise your assets for the base year, which lowers award amount.
Consumer Debt
Keep clear of consumer debt, such as credit card balances and auto loans. The financial need determination process does not include consumer debt into calculation, therefore, you can have no benefits from consumer debt. Settle the credit card debt and car loans will decrease your available cash, which increase your award eligibility.
There are more strategies to maximize award eligibility and amount not mentioned here. I will give more strategies when similar topics are treated. Please, keep in mind that you should not use dishonest or illegal method. The strategies mentioned here are legal things.
Options to Help Cover School Expenses
For a student entering college in the U.S. who is in short on school expenses, there are several options to help cover costs. I prepare easier options among them. In the matter of financial aid or scholarships that are easier to get, the crucial point is the targeting based on your specific qualification, location or circumstances. Here are some easier option for you.
- 1. FAFSA
- 2. Institutional Scholarships
- 3. Local and Regional Scholarships
- 4. Employer-based Scholarships
1. Free Application for Federal Student Aid
Most U.S. students are eligible to apply for FAFSA, and it decides eligibility for federal grants, loans, and work-study. Students with significant financial need can receive federal grants like the Pell Grant, which they don’t have to repay it. Complete the FAFSA form at studentaid.gov. You should apply ASAP because some aid is on a first-in, first-come rule.
2. Institutional Scholarships
Colleges and universities tend to provide merit-focused or need-focused scholarships. These can be easier to obtain since you only compete with applicants to that school. Pay attention to the financial aid office at the school you are applying to. Many colleges automatically regard you for scholarships based on your application, so you don’t have to do further things.
3. Local and Regional Scholarships
Scholarships from local institutions, businesses or communities have tendency to have fewer applicants and are less known, which makes them less competitive. Get in touch with local civic organizations, local companies, and local banks. In addition, don’t forget to check local communities’ website for availability.
4. Employer-based Scholarships
Many employers such as AT&T, Dupont, IBM and more offer scholarships or tuition assistance for employee and their children. Search your or your parents’ employer to see the availability.
Noteworthy Scholarships
Scholarship is a kind of financial aid for students like grants, which you don’t have to pay back. However, for scholarship, financial need is not important factor unlike grants. So, students in various situation can access scholarships to compensate school expenses.
1. The Gates Scholarship
The Gates Scholarship is a highly selective and last-dollar for outstanding, minority from low-income family. Scholars will receive funding for the full cost of attendance, which includes tuition, fees, room, board, book, transportation and other personal expenses.
To apply, you must be a high school senior, at least one of African-American, American Indian/Alaskan Native, Asian & Pacific Islander American and/or Hispanic American. Also be Pell-eligible, a U.S. citizen, national, or permanent resident. Besides, you have a minimum cumulative weighted GPA of 3.3 on 4.0 scale.
You may be regarded as an ideal candidate if you are upper 10% in your class, demonstrated leadership ability, and exceptional personal skills.
2. QuestBridge National College Match
QuestBridge National College Match scholarship offers students who are excel in academic performance with financial aid. The recipients are admitted early to one of QuestBridge’s college partners with a full four-year scholarship, worth over $325,000
To qualify, you must be a high school senior in U.S. regardless of citizenship, who is going to attend at the fall after graduation. Also, must be U.S. Citizens and permanent residents who live abroad. Earning primarily A’s in the most challenging courses. Strong writing skills and intellectual curiosity plus resilience, integrity and motivation to succeed.
Conclusion
The Pell Grant Program is a kind of financial aid, which U.S. Federal Government offers to help undergraduate student pay for their educational expenses. Fortunately, you do not have to pay back the grant unlike loans, which makes the Pell Grant fine resource for students with financial need.
To apply for the grant, you must be a U.S. Citizen or an eligible non-citizen, who are enrolled in a college or a university, have not earned bachelor’s degree or professional degree before. The most important factor to be eligible is financial need, which is determined by Expected Family Contribution estimated through Free Application for Federal Student Aid.
Higher EFC generally means lower award amount. Therefore, to maximize eligibility and award amount, you need to reduce income and assets for the base year. Please, keep in mind that you should not use dishonest and illegal method for this. There are several strategies to decrease income and assets for the base year legally in this post. In addition, higher cost of attendance typically results in higher award amount. You should be legal all though this. I expect this post to be helpful for you to be eligible. Thanks for reading and good luck.