Pell grants are the most common form of grant offered by the United States Department of Education. As of July, 2010, all types of educational loans and many types of scholarships and grants were completely taken over by the US government in an effort to prevent abuses and wasteful excesses of the previous educational funding systems. This included the USDE revoking the ability of colleges to make financial need based educational funding awards, directly impacting the Pell grant.
Pell Grants are issued to students who demonstrate financial need via data provided on the FAFSA, or Free Application for Federal Student Aid. This form is the standard form used by more than 4,000 colleges and universities nationwide to make financial need determinations. Named after Senator Claiborne Pell, this grant has been awarded to students for decades. New legislation passed by the Obama administration only sought to better manage the grant, and education officials estimate these changes will save hundreds of millions of dollars, making this grant available to more students than ever before.
Who are Pell Grants awarded to?
In general, Pell grants are awarded to undergraduate students that come from low income families. Overall, most grant recipients come from families that earn less than $41,000 per year. Data provided by the student on the FAFSA includes income and asset information, as well as similar information related to the parents of the student. This is because the USDE uses a formula designed by congress that takes into consideration the “Expected Family Contribution.” In theory, the EFC helps to ensure that educational expenses are shared by the family of the student and the federal government in the event that the family cannot reasonably afford to fund the child’s education in entirety.
Grants under this program are also awarded to independent students that will not have an expected family contribution. In most cases, this includes any student over the age of 24, and students that are currently enrolled in graduate, professional, or doctoral programs. Graduate and professional students are typically only awarded these grants if they are enrolled in a program that will result in certification as a teacher- especially those teachers who agree to be employed in a school that services low income families.
Pell grants are awarded once per academic year and in most cases students may only receive the award once. However, some students that are nearing completion of a rigorous degree program may be able to earn two grants in a year, which could be a full Pell, a partial Pell, or a combination of the two. A large percentage of students who apply for this federal grant through the FAFSA will not receive the maximum award, which is $5550 through the 2011 academic school year. Some students may only receive the minimum, which is $555. The determination of how much to award is based upon the student’s financial need, their program of study, school of choice, and student status.
Students that qualify for the Pell grant may also qualify for the Federal Supplemental Education Opportunity grant. This grant generally awards up to $4000 per academic year, and is reserved for students with severe financial need.
Pell grants are funds that never have to be repaid, which makes the grant particularly appealing to students who come from low income families. In some cases, students may be paid the award directly, which can be used for any cost associated with their educational expenses, including tuition, books, transportation, housing, or any other need. However, students should be aware that educational aid not provided by the federal government, such as grants, work study and scholarships from private businesses, individuals, or organizations, may reduce or eliminate the amount of aid the student would otherwise qualify for. For this reason, students should deliberate carefully when applying for the grant, as other forms of aid may have requirements that are less than favorable when compared to the Pell grant.