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Keeping up with the rising cost of college is tough, and if you come from a low-income family it is even tougher. The Pell Grant is a need-based federal grant for low-income students who require financial support to pay for college.
Pell Grants are awarded to undergraduate students who have not received a bachelor’s degree and to some students who are enrolled in qualifying post-baccalaureate programs.
History of the Pell Grant
In 1972 the Pell Grant program was established as a consequence of the Higher Education Act. Originally coined the Basic Education Opportunity Grant Program, the program was renamed to the Pell Grant program in 1980 after Senator Claiborne Pell.
The initiation of the program intended to improve and assist with college education in America.
Availability of Pell Grant Funds
As with all types of federal financial aid, the amount of funding is limited. Annual Pell Grant funding is reported by the Congressional Budget Office or CBO.
In 2013, with the cost of the program seemingly lower than in past years, a surplus was reported by the CBO. The preliminary 2014 total surplus estimate is around $11 billion dollars, as published by the Federal Education Budget Program. The appropriation amount for 2014 is $22.8 billion with a previous year surplus of $2.9 billion
The total Pell Grant funding amount for the year 2014 is $32.2 billion. The maximum grant appropriation per student is $4,680, and the mandatory entitlement amount is $870 for a total of $5,730 for the year. These amounts are set through 2014 and, at this point, years beyond that are still estimations.
Eligibility for Pell Grants
Eligibility for Pell Grants is similar to other federal air programs, however, there are a few differences highlighted in bold. Please see the eligibility criteria below:
Borrower must demonstrate financial need
Be a U.S. citizen, U.S. National, or eligible noncitizen
Have a valid Social Security number unless exempt
Not already have an undergraduate or professional degree
Be registered for the U.S. Selective Service, if a male between the ages of 18 and 25
Sign statements on FAFSA certifying that you will use the funds for educational purposes
Not be found guilty of drug charges while receiving federal financial aid
How Can I Apply for a Pell Grant?
Pell Grant’s do not have a direct application available; all students are considered after completing and submitting the Free Application for Federal Student Aid, or FAFSA. The FAFSA provides key eligibility information such as family income, personal assets, expenses, and will allow the federal aid officers to determine how much federal financial assistance you need.
Pell Grants are reserved for students from low-income families, so you must demonstrate exceptional financial need on your FAFSA to qualify for one. Please be aware, Pell Grants are not common types of federal aid, and as such are reserved for those with the greatest financial need. Federal financial aid alternatives include Stafford Loans, Perkins Loans, and PLUS Loans.
Author: Dave Rathmanner
As the VP of Content at LendEDU, Dave regularly plans and writes content to help consumers with their personal finances. Dave’s work has been featured in the Chicago Tribune, Bloomberg, CNBC, US News, Yahoo Finance, NPR, and more.