Pell Grants: Everything You Need To Know
Updated On September 2, 2022
Editorial Note: This content is based solely on the author's opinions and is not provided, approved, endorsed or reviewed by any financial institution or partner.
A Pell Grant is a form of financial aid that helps low-income students pay for college. As you consider the cost of higher education, a Pell Grant can be one of the best types of financial aid. This guide will teach you everything you need to know about Pell Grants.
In this guide, we will discuss:
- What is a Pell Grant?
- How do I qualify for Pell Grants?
- How to apply for Pell Grants
- How to get student loan forgiveness for Pell Grants
- How much money is a Pell Grant?
- Do I have to pay back a Pell Grant?
Top Picks For Personal Loans
Disclosures: SoFi | Best Egg | LightStream | Laurel Road | Upgrade
What is a Pell Grant?
Pell Grants are a type of federal financial aid that are available only to undergraduate students. Unlike student loans, Pell Grants don’t have to be repaid. The U.S. Department of Education awards Pell Grants to low-income students to help pay for college costs. Students can use Pell Grants for tuition, fees, room and board, and other educational costs. However, Pell Grants are considered non-taxable income. Pell Grants are named for U.S. Sen. Claiborne Pell of Rhode Island, who sponsored legislation in 1972 to create Pell Grants.
How do I qualify for Pell Grants?
To qualify for Pell Grants, you must demonstrate exceptional financial need. Why? Pell Grants are targeted for students with low income. You can qualify for a Pell Grant by completing the Free Application for Federal Student Aid (FAFSA). Importantly, Pell Grants are only available for undergraduate students who have not earned a bachelor’s or graduate degree. Unlike other types of financial aid, Pell Grants do not vary by institution. If a college or university offers federal financial aid, a student’s eligibility for Pell Grants doesn’t change across institutions.
There are several important rules to know for qualifying for Pell Grants:
Incarceration: If you are currently incarcerated in a federal or state prison, you are generally ineligible to get a Pell Grants. However, there are more than 100 programs that allows some prisoners to enroll in college courses.
Enrollment: To remain eligible for Pell Grants, you must maintain your enrollment status, continue to make academic progress, and not withdraw from courses.
Pell Grants Limitations: Pell Grants are available for up to six years or 12 academic semesters. You can monitor your Pell Grants awards through Federal Student Aid.
How to apply for Pell Grants
To apply for a Pell Grant:
- Complete the free FAFSA
- Colleges and universities will use the data you provide in the FAFSA to determine your eligibility and how much money you receive.
- To remain eligible for Pell Grants, you must complete the FAFSA each year you attend college.
- The good news is that Pell Grants are available for every student who needs one.
- While it’s important to submit the FAFSA early, you can still get a Pell Grant if you submit the FAFSA late.
- If approved, your college or university disburse Pell Grant directly to you. You can then use your Pell Grant to pay education expenses such as tuition, room and board, and other fees.
How to get student loan forgiveness for Pell Grants
Once you have a Pell Grant, you may wonder how to get student loan forgiveness for Pell Grants. President Joe Biden announced historic student loan relief, including wide-scale student loan cancellation for most federal student loan borrowers.
Under Biden’s plan, student loan borrowers with Pell Grants can receive up to $20,000 of student loan cancellation. In comparison, student loan borrowers without a Pell Grant are eligible to get up to $10,000 of student loan forgiveness.
How do you apply for student loan forgiveness if you have a Pell Grant? Student loan forgiveness for Pell Grants will be automatic for many borrowers. If you have a Pell Grant and submitted your income information to the U.S. Department of Education, student loan forgiveness will be automatic. If the U.S. Department of Education doesn’t have your income, student loan borrowers can apply for student loan forgiveness.
How much money is a Pell Grant?
The amount of your Pell Grant may vary based on your financial situation. When you complete the FAFSA, the federal government decides how much money your Pell Grant will be. The amount of a Pell Grant can change annually. For the 2022-2023 award year, the maximum Pell Grant award is $6,895.
There are several factors that influence how much money a Pell Grant can be. For example:
- your Expected Family Contribution (EFC);
- the cost of attendance;
- whether you’re a full-time or part-time student; and
- whether you will attend school for a full academic year.
You can logon to Federal Student Aid to learn the amount of your Pell Grant.
Do I have to pay back a Pell Grant?
If you receive a Pell Grant, you don’t have to pay it back. In contrast, student loans must be repaid. However, if you receive a Pell Grant for a full academic year but only attend school for one semester, you will have to pay back the unused portion of the Pell Grant.