Federal Pell Grant

The Federal Pell Grant is the foundation of federal financial aid. It is awarded to undergraduate students who have not yet earned a bachelor’s or a professional degree. The Pell Grant can be also awarded to post baccalaureate students enrolled in teacher certification programs.

The Federal Pell Grant program helps ensure access to postsecondary education for low and moderate income undergraduate students by providing grants that help meet postsecondary education costs. The program also promotes lifelong learning by providing resources for low income adults now in the workplace to return to school to upgrade their skills.

Amounts can change yearly. The maximum Federal Pell Grant award is $5,730 for the 2014–15 award year (July 1, 2014, to June 30, 2015). For the 2015–16 award year (July 1, 2015, to June 30, 2016), the maximum award will be $5,775.  If Pell Grant costs for a given academic year exceed the corresponding appropriation, the Department uses the next fiscal year’s appropriation to cover the full cost.

The Pell Grant program is the single largest source of grant aid for postsecondary education – the centerpiece of President Obama’s strategy to make sure students can afford to seek higher education and successfully complete a postsecondary credential. Thanks to the landmark investments in Pell Grants since the beginning of the Administration, in 2013 over 9.7 million students will receive Pell Grants worth up to $5,635. The program operates as an entitlement to eligible students once the maximum grant, award rules, and payment schedule are establis hed. The Higher Education Act does not provide for the denial of an award to any student who meets the qualifying conditions, nor does it allow the Secretary to reduce any student’s award level.

More recently, to further address program cost issues, the Consolidated Appropriations Act, 2012, made several statutory changes to the Pell Grant program that are estimated to produce a savings of more than $750 million in fiscal year 2013. These changes, which become effective on July 1, 2012, include:

• Changing the EFC determination by decreasing the income threshold at which students receive an automatic zero EFC from $32,000 to $23,000;
• Denying eligibility for Pell Grants to those students who previously qualified by passing an Ability to Benefit test and instead restricting eligibility to in dividuals who have a high school diploma, GED, or are home schooled;
• Effective on July 1, 2012, you can receive the Federal Pell Grant for no more than 12 semesters or the equivalent (roughly six years). You’ll receive a notice if you’re getting close to your limit. If you have any questions, contact your financial aid office.
• Requiring students be eligible for 10 percent of the maximum grant (previously was 5 percent) to earn the minimum award.

Institutional participation: Approximately 5,400 postsecondary institutions currently participate in the Pell Grant program. Institutions that lose their eligibility to participate in the loan programs due to high default rates are also precluded from participation in the Pell Grant program.

Student participation: Students may use their grants at any participating postsecondary institution. Pell Grants are disbursed to the student through the institution. The Pell Grant program is the largest source of grant aid to students under the Higher Education Act, with approximately 27% of all undergraduates receiving a Pell Grant.

Recipients must be undergraduates and cannot have received a bachelor’s degree previously (with the exception of certain teacher certificate programs), and must be enrolled with the purpose of obtaining a degree or certificate at an eligible institution. Students must also have a high school diploma (or its equivalent) or a demonstrated ability to benefit from the training offered by the institution, as shown by a passing score on a test approved by the Department. (However, as noted above, the Consolidated Appropriations Act, 2012, will no longer permit individuals to qualify for a Pell Grant by passing an ability to benefit test, effective as of July 1, 2012.) Less than full-time students are eligible for pro rata awards based on their enrollment status.

A student in default on a loan made under any Title IV HEA loan program, or who owes an overpayment on any other previously received Federal student aid, may not receive additional funds under the program unless he or she repays the debt in full, or makes satisfactory repayment arrangements with the holder of the debt.

The Pell Grant is awarded through the school. The school can apply the Pell Grant funds to your tuition costs, can pay you directly by check, or do both. The school will tell you in writing how much the awarded amount is, and how the amount will be applied towards tuition, check, etc. The school must distribute the Pell Grant funds at least once per term.

Find out more about Pell Grant