What Is a Pell Grant and How Do I Get One?

Pell Grants can make a big difference in helping you pay for college. Here’s why.

Written by Brian O'Connell / February 22, 2022
Reviewed by Mark Kantrowitz

Quick Bites

  • Pell Grants are the largest source of funding for undergraduates from the government, and they’re targeted for students from low-income households.
  • You don’t have to pay back the money you get from a Pell Grant.
  • Part-time college students may also be eligible for a Pell Grant.
  • To apply, you fill out the FAFSA form.

Pell Grants are a great way for low-income college students to get money for school.

Too bad so many qualified students and families ignore them.

Case in point: According to the National College Attainment Network (NCAN), a nonprofit group that works with low-income families on college financing, the class of 2021 is leaving $3.7 billion in Pell Grant cash on the table.

That’s unfortunate, as Pell Grants can mean the difference between not having enough funds to attend college and having more than enough to make that move onto campus and into the collegiate experience.

Here’s a look at Pell Grants and why they offer so much opportunity to families struggling to accumulate funds for college.

Inside this article

  1. What is a Pell Grant?
  2. Eligibility requirements
  3. Applying for a Pell Grant
  4. Key tips for applying

What is a Pell Grant?

Pell Grants take direct aim at high-achieving high school students who are looking to attend college, but can’t afford to do so.

The Federal Pell Grant, the largest federal grant program offered to undergraduates, specifically aids students from low-income households in gaining access to college funds. A Pell Grant doesn’t have to be repaid, except under specific circumstances, such as a student leaving school before a semester ends, a student’s family finances changing for the better, which may lessen that student’s need for a Pell Grant, or if the federal government overpays a Pell Grant amount to a student.

To qualify for a Pell Grant, a college student must meet specific financial need criteria, via the Free Application for Federal Student Financial Aid (FAFSA) form. The FAFSA form is required for any U.S. citizen looking for financial aid from the federal government.[1]

Undergraduate students can apply for up to six years in college or 12 semesters. Once approved, funds will be paid out by the federal government, typically by a credit to the student’s specific college financial account. Payments are made once per semester.

The grants are named after U.S. Sen. Claiborne Pell of Rhode Island, the congressional architect of Pell Grants. The grants have been disbursed every academic year since 1973-74, after the program was approved by Congress in 1972.

“Pell Grants are need-based grants and are an annual award that ranges up to $6,495 for the current and next academic year,” says Joseph Posillico, vice president of enrollment management at New York Institute of Technology. “Whereas some grants are to be applied to tuition only, Pell Grants can be used to pay for other educational expenses, like books, transportation, and room and board.”

Eligibility requirements

While myriad factors determine eligibility for Pell Grants, the primary criteria is the need for undergraduates to exhibit demonstrated financial need. That need is partly based on the Expected Family Contribution (EFC).

“Financial need is determined by filing the FAFSA, which produces an Expected Family Contribution,” Posillico says. “Factors that determine EFC are family income, number of family members, number of family members attending college and assets.”

In general, full-time college students whose EFC is less than $5,847 can expect to receive a Pell Grant.

“The lower the EFC, the higher the Pell Grant will be,” Posillico adds. “Students must be U.S. citizens or permanent residents, as well. In addition, the undergraduate student must be matriculated in a degree-granting program and maintain Satisfactory Academic Progress.”

College students may also be eligible for a Pell Grant even if they’re enrolled in college less than half time.

Students who do so won’t get as much grant money as a full-time college student but, by law, can’t be rejected for a Pell Grant due to part-time enrollment status. However, if a student will qualify for a very small Pell Grant, they might want to forgo receiving the Pell Grant one semester to preserve eligibility for the Pell Grant in a future semester, when they will be enrolled full-time and qualify for a larger grant.

Here’s a line-by-line list of eligibility requirements for the Pell Grant.

  • The student must be enrolled as an undergraduate student (including incoming college students).

  • The student must be a U.S. citizen, permanent resident or eligible non-citizen.

  • The student must be pursuing an undergraduate degree or certificate from college. Once the student has earned a bachelor’s degree, they are no longer eligible for a Pell Grant.

  • Pell Grant approval criteria includes the student’s annual Expected Family Contribution (as listed on the FAFSA form), and only is awarded for students attending a single college or university at one time.

Starting with the 2024-2025 school year, Pell Grant eligibility can also be based on a comparison of adjusted gross income with income thresholds based on a multiple of the poverty line. That means having an income below 225% (for single-parent households) or 175% (otherwise) of the poverty line.

Applying for a Pell Grant

Applying for a Pell Grant is a straightforward process.

An applicant’s first step is to complete the annual FAFSA form online or through the myStudentAid app on Apple and Android devices.

Form deadline dates are generally fixed on a year to year basis—applicants have until June 30, 2023, to complete their 2022-2023 FAFSA forms. The earliest an applicant can file is Oct. 1, 2021. The application start dates and deadlines are similar in other years. Apply as early as possible to take advantage of all the aid available; for instance, some states have very early deadlines for state grants.

Key tips for applying for a Pell Grant

Boost your chances of obtaining a Pell Grant with these tips:

Apply with your specific school in mind.

Students should verify that the Pell Grant can be used at the school they’re considering.

Explore an FSEOG grant funding option.

“Pell-eligible students may also qualify for a Federal Supplemental Educational Opportunity Grant (FSEOG) subject to availability of funds,” Posillico notes.

Request a “redo.”

Financial scenarios can often shift, but there’s a plan for that with Pell Grants. “Students with changes in their family’s financial situation since filing the FAFSA due to unforeseen extenuating circumstances may request a reevaluation of their financial aid,” Posillico adds.

Exhaust all “free money” opportunities.

There’s not much you can do to obtain a Pell Grant besides submit the FAFSA, since it’s entirely based on the applicant’s financial need. But you can also apply for scholarships and grants outside of a Pell Grant.

Article Sources
  1. “Federal Pell Grants are usually awarded only to undergraduate students,” Office of Federal Student Aid, https://studentaid.gov/understand-aid/types/grants/pell.

About the Authors

Brian O'Connell

Brian O'Connell

A former Wall Street bond trader, Brian O’Connell is the author of two best-selling books; “The 401k Millionaire” and “CNBC’s Creating Wealth”. His bylines include TheStreet.com, Forbes, The Wall Street Journal, U.S. News & World Report, Fox Business, and The Motley Fool, among others.

Full bio
Mark Kantrowitz

Mark Kantrowitz

Mark Kantrowitz is a nationally-recognized expert on student financial aid, the FAFSA, scholarships, 529 plans and student loans. His mission is to deliver practical information, advice and tools to students and their families so they can make smarter, more informed decisions.

Full bio

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