Federal Pell Grants

Parents and students looking for ways to finance higher education have several avenues to pursue. Direct student loans, PLUS loans, subsidized loans and unsubsidized loans are all available. For low income families, one of the best options is a Federal Pell Grant.

Because a Federal Pell Grant is a grant, not a loan, repayment is not required. Federal Pell Grants are designed to assistant low-income undergraduate students and a select group of post-baccalaureate students to pay for school.

Pell Grants are awarded based on the following criteria:

  1. The student’s estimated family contribution or EFC.
  2. The cost of attending the college or university. This cost is determined by the school.
  3. Whether the student will be a full-time or part-time student.
  4. Whether the student attends for one full academic year or less.

To determine the EFC, a formula is used that includes the student’s income, the parents’ income, family assets, number of family members, excluding parents, who are attending institutions of higher education and the family’s household size.

The EFC is calculated by totaling the following:

  1. A percentage of the net income.
  2. A percentage of net assets.

Different percentage rates and assessments are used based on whether the student is a dependent, an independent with no dependents or an independent with dependents.

To apply for a Federal Pell Grant, the student must file a FAFSA ( Free Application for Federal Student Aid), which is available online or at the school’s financial aid office. Students are notified of Pell Grant eligibility either by the school or through receipt of a Student Aid Report. The EFC amount will be included.

Awarded through participating colleges, universities or career schools, a Federal Pell Grant is credited to the student’s account, paid directly to the student or a combination of both. It is required that students be paid once a semester, quarter or trimester.

Below are some additional facts about Federal Pell Grants:

  1. Students cannot be awarded a Federal Pell Grant for more than one school at a time.
  2. While a Federal Pell Grant is typically awarded to undergraduate students, post-baccalaureate students participating in programs that lead to teacher certification or licensure are also eligible to apply.

A Federal Pell Grant is an excellent resource to assist students from low income families to finance a higher education.