What is a Pell Grant and how do I get one?

Undergraduate students who meet certain financial requirements have access to financial aid opportunities, like the federal Pell Grant program. This need-based grant offers up to $7,395 in college aid for the 2023-2024 academic year, and the key to seeing if you’re eligible is filling out the Free Application for Federal Student Aid (FAFSA).

If you’re wondering what a Pell Grant is and how to get one, here’s what you should know.

What is a Pell Grant?

A Pell Grant is a need-based financial aid program offered by the Department of Education. It’s designed to offer financial assistance to undergraduate students who have “exceptional financial need” based on the information included in their FAFSA. 

Unlike student loans, Pell Grants are considered to be a type of gift aid — meaning they generally don’t require repayment.

Keep in mind: For the 2023-2024 academic year, the average cost of tuition and fees for an undergrad attending a public four-year, in-state school is $11,260, according to the College Board. This price tag rises to $29,150 for public out-of-state schools and to $41,540 for private nonprofit schools.

While the maximum Pell Grant amount might not cover your entire cost of attendance, it can be a tremendous help if you qualify.

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How does a Pell Grant work?

Schools receive funding from the Department of Education to offer Pell Grant awards to their eligible undergraduate students. When a student (and their parents, if they’re a dependent student) completes the FAFSA, the school uses that data to determine their Pell Grant eligibility.

The maximum Pell Grant award amount can change from year to year, but not all students receive the maximum award. Instead, the award amount is based on enrollment status (full or part time), planned attendance for the academic year and existing financial need versus the school’s published cost of attendance. 

Awards are first applied to your unpaid tuition and fees for the academic year. The school then disburses any remaining Pell Grant award directly to the student.

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Pell Grant eligibility requirements

The Pell Grant program makes college more financially accessible for students who might struggle to afford a higher education. Since it’s meant for those in financial need, you’ll need to meet certain Pell Grant eligibility criteria. To qualify for a Pell Grant, you must: 

• Meet general eligibility requirements for federal student aid.
• Submit a FAFSA for the upcoming award year.
• Demonstrate exceptional financial need on your FAFSA.
• Be enrolled at a participating U.S. institution.
• Pursue an undergraduate degree.
• Have no existing bachelor’s, graduate or professional degree (unless you’re enrolled in a post-baccalaureate teaching certification).
• Not have reached the 12-term award limit (roughly six years).

In addition to the above Pell Grant requirements, you must not be currently incarcerated in a federal or state facility. You might qualify if you were previously incarcerated at a federal or state facility, are on probation or parole, or have certain types of convictions. 

Continuing eligibility 

A common misconception about Pell Grants is that eligibility is guaranteed for your entire undergraduate career, according to Leah Young, an accredited financial counselor (AFC) and northeast regional director of the AccessLex Institute. 

“Circumstances change, and the Pell Grant is awarded based on your reported data on the FAFSA, which uses tax data from two years prior,” says Young. “Families who qualify for a Pell Grant in their first year, but whose income or asset levels have gone up in subsequent years, may see reduced or eliminated Pell Grants in future academic years.”

The opposite scenario could also affect eligibility.

Do Pell Grants have to be repaid?

A significant perk of Pell Grant awards is that they generally don’t need to be repaid. This can help you avoid taking on excessive student loan debt.

However, you might be required to return all or a portion of your Pell Grant funds in some circumstances. For example, this could happen if: 

• Your enrollment status changed in a way that reduced your eligibility.
• More than one school awarded you a Pell Grant for the same term.
• You received third-party gift aid that notably reduced your financial need.
• You withdrew from school.

Your school will notify you if it determines that you owe part or all of your Pell Grant award.

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How to apply for a Pell Grant

Regardless of what your financial situation looks like, you should fill out the FAFSA and check your eligibility for a Pell Grant and other financial aid. Here’s how:

1. Fill out the FAFSA. You can fill out and submit the FAFSA at StudentAid.gov. Be prepared to provide your personal and financial information. If you’re a dependent student (meaning your parents support you financially), you’ll also need to include your parents’ information. 
2. Submit the FAFSA before the deadline. The FAFSA deadline falls on June 30 each academic year — so, for example, you have until June 30, 2025, to complete the FAFSA for the 2024-2025 academic year. However, it’s a good idea to submit it as soon as possible. Some financial aid is awarded on a first-come, first-served basis. Many schools also have specific deadlines to qualify for state- or school-based aid — be sure to check with your school’s financial aid office to see if there are additional deadlines to meet.
3. Accept your award. After you submit the FAFSA, your school will send you a financial aid award letter detailing what federal and school-based aid you qualify for, such as Pell Grants and federal student loans. You can then choose which aid you’d like to accept.
4. Reapply every undergraduate year. Pell Grant eligibility isn’t automatic after receiving your first award. Make sure to repeat the steps above each academic year of your undergraduate career so your school can assess your eligibility and award amount.

How do you know if you’ve received a Pell Grant before?

The Department of Education and your school track your lifetime eligibility used (LEU) for the Pell Grant. The LEU is the Pell Grant amount you’ve already received — represented as a percentage — divided by the Pell Grant amount you’d be eligible for as a full-time undergraduate student.

Receiving your full eligible amount in a given academic year means you’ve received 100% of Pell Grant funds for that year. Since the lifetime limit for Pell Grants is six years, the maximum LEU is 600%. 

To see whether you’ve received a Pell Grant in the past, and how much of your eligibility term is remaining, log in to your StudentAid.gov account. If your LEU shows a percentage below 600%, you could still be eligible for a Pell Grant award. 

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What if you don’t qualify for a Pell Grant?

If you’ve received your federal financial aid award package but didn’t qualify for a Pell Grant, you still have options to pay for college. Here are some alternatives to consider:

Request a professional judgment

If your family’s financial circumstances recently changed or you believe you meet Pell Grant qualifications but didn’t receive an award, you can dispute the decision. 

“Students experiencing hardship should speak to their financial aid office to request a professional judgment review. [This is where] schools have the ability to make changes to (the information of) the FAFSA due to extenuating circumstances,” Young says. 

The process is offered on a case-by-case basis at the discretion of your school’s financial aid office. Depending on the judgment of the financial administrator, it could result in you becoming eligible for a Pell Grant if the changes to your FAFSA are substantial.

Explore alternative scholarships and grants

While a Pell Grant is a useful source of funding that can help cover a portion of your undergraduate education, it’s not your only option for gift-based assistance. If you weren’t awarded a Pell Grant, consider looking for other scholarships and grants as supplemental aid. 

Rebecca Sanchez, the director of financial aid and scholarships at the University of California (UC), Irvine, suggests looking at your own school or state education system as a starting point.

For example, Sanchez says, “The UC system has robust state and institutional aid programs. [California] has just increased its investment in financial aid through the Middle Class Scholarship. The Cal Grant program also covers all UC tuition and system-wide fees for those who qualify.”

You can also look for awards given by private nonprofits, professional associations and both local and national businesses. There is a wide variety of awards available for almost any reason you can think of — for example, awards are given based on merit, ethnicity, LGBTQ+ status and more. 

Tip: There’s no limit to how many awards you can get — so be sure to apply for as many as you can to take advantage of education funding that you don’t have to repay. You can use sites like Fastweb and Scholarships.com to easily search and apply for awards that you might be eligible for.

Apply for federal student loans

If you’ve exhausted your scholarship and grant options, you might still need to borrow for school. In this case, it’s usually best to rely on federal student loans first since they offer major borrower protections, such as access to income-driven repayment (IDR) plans and student loan forgiveness programs. 

Most federal student loans also don’t require a credit check or a co-signer, which can make them easier to qualify for compared to private loans.

When you fill out the FAFSA and receive your financial aid award letter, it will detail what federal student loans you qualify for. You can then choose which loans to accept.

Consider private student loans

Lastly, private student loans can help to fill funding gaps left over after you’ve taken advantage of all the scholarships, grants and federal student loans available to you. Unlike federal loans, private student loans generally require you to have good to excellent credit (or a creditworthy co-signer) and verifiable income to qualify.

Additionally, private student loans don’t offer the protections that federal student loans do. Because of this, it’s critical to make sure that you only borrow what you need and can reasonably afford to repay.

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