What is a Pell Grant?

Question: What is a Pell Grant?

If you think you don't have enough money to pay for college, the U.S. government can help through the Federal Pell Grant Program.

Answer: Pell Grants are federal grants for low-income students. Unlike most federal assistance, these grants do not need to be paid back. Pell grants were established in 1965, and in 2007 nearly $14 billion in grant aid was available to qualifying students. Grants range in size from $400 to $4,310, with an average award of $2,620. In 2008, the maximum award will increase to $4,731.

To qualify for a Pell Grant, a student needs to submit the Free Application for Federal Student Aid (FAFSA) to learn what his or her expected family contribution (EFC) is. A student with a low EFC often qualifies for a Pell Grant. After submitting the FAFSA, students will be informed if they qualify for Pell Grants. There is no application specifically for a Pell Grant.

Colleges and universities must meet certain federal guidelines to be part of the Federal Pell Grant Program. About 5,400 institutions qualify.

In 2007 roughly 5,339,000 students received Pell Grants. The federal government pays the grant money to the school, and each semester the school then pays the student either by check or by crediting the student’s account.

The amount of the award depends largely upon four factors:

• The student’s financial situation
• The cost of the school
• The student’s enrollment status (full time vs. part time)
• The student’s household size (and whether or not siblings are in college)