Pell grants have been the mainstay of the U.S. Department of Education since they were introduced by Senator Claiborne Pell in 1973. Previously the Higher Education Act of 1965 had laid down legislation that paved Pell’s way forward. They provide financial aid to U.S. college students which do not have to be repaid. Whether funding is granted and how much is granted is worked out on a needs basis.
In most cases if you are on a low income you will receive some sort of help. Although, because of rising costs of education it’s virtually impossible to get your COA (Cost of Attendance) paid in full. The eligibility of students is worked out through an income test formula (see Pell grant eligibility). This takes in to account whether the student is a dependant or if they are classed as independent and what the household income and outgoings are.
The grants which are aimed at providing help for post secondary education are available in around 5,400 education institutions around the country. Application is through the Free Application for Federal Student Aid (FAFSA). They require a certain amount of information and documentation during the process and having things ready before you start is advised. Stuff like Tax returns, bank statements and social security number are all needed plus lots more (see our Pell grant application guide for more details).
There have been fluctuations in the maximum granted to applicants over the years. The most anyone can get at the moment is $5,550. Whatever is awarded, will rise (or fall) to stay in line with changes in COA for the duration of your course. So if your chosen college hikes its prices in year 2 then the Pell grant awarded will reflect the change. The amount of change has to be in keeping with the consumer price index for this statement to be true. Unreasonable variations will not be reflected in the provision of grant funds. Though, you will still have the problem of meeting the rest of the cost of attendance.
Some institutions that have the highest number of Pell grants awarded to students also have the highest number of people that fail to complete their course. You should take this in to account when looking for a suitable place to study. Many colleges have come under criticism for not being concerned with pupil success and have been accused of abusing the grant system.
The grants tend to be paid directly to the school and in the unlikely event that there are some funds left over, they will be paid to the student. The school can use the students Federal Pell grant to pay for room, board, fees and tuition without any permission granted from the student. So it’s important you know exactly what the school you want to study in is going to charge you before you apply for funding to attend.
If a student’s home situation changes during the period covered by Pell grants then there will be a recalculation of the EFC. That could mean an overpayment has been made and will need to be repaid. It’s vital that circumstances are reported properly when applying for funding to avoid disappointment later.