Paying for college can set you back a lot. We hear more and more voices expressing concerns about the high cost of education. The fact that you might be forced to pay over decades for the years you have spent in college is just insane. Few people nowadays are fortunate enough to be able to afford a college education without receiving financial aid (including Pell Grants) of some sort. In 2018,  44.2 million Americans owed $1.52 trillion in loans for education purposes. This staggering figure means that the average American student’s debt for that year was $38,390! No wonder that parents and kids are always on the lookout for new ways to  save for college

Because college is so expensive, it comes as no surprise that you are looking for alternative ways to fund your undergraduate degree. Federal student aid is a viable option, and the Pell Grant is probably the most popular form of financial assistance.

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Federal Grant Programs and Pell Grants 

All federal grant programs aim to help people who cannot afford to go to college to continue their education. The Pell Grant was established in 1972 as the Basic Educational Opportunity Grant and was later named after notable Rhode Island Senator Claiborne Pell. Pell contributed significantly to making higher education available to a broader range of citizens through his work, including citizens from the lower classes. 

Pell Grants

Grant vs. Student Loans

It may sound pretty idealistic to say that the Pell Grants help students achieve their dreams, but history shows that in many cases that happens. A few thousand dollars extra each semester, or even each year, can be the difference between one student either graduating or dropping out of school. The main difference between a grant and a student loan is that you do not have to pay back student aid grants you’ve received. However, loans secured as financial assistance from the federal government must be repaid. It sounds like a great deal, doesn’t it? Before you go for it, you have to determine your eligibility.

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Finding out whether or not you are eligible for financial aid

What you must consider is that the Pell Grant is а need-based form of financial aid. Need-based means that this grant will be made available to you only if the Department of Education (ED) determines that you require financial help to attend college.

General Requirements

To be eligible to apply for a Pell Grant, you have to meet these basic requirements. You must:

  • Be a US citizen or an eligible noncitizen.
  • Have earned a high school diploma, GED, or completed your high-school education in a home-school setting.
  • Be enrolled or accepted for enrollment in an eligible degree program. 
  • Be an undergraduate student. You must demonstrate financial need.
  • Maintain satisfactory progress at your college or professional school.
  • Sign the certification statement on the Free Application for Federal Student Aid (FAFSA). The report certifies that you have never taken out a federal student loan, and have not gotten a federal student grant before. You also must promise that you will use the student aid you are eligible for only for educational expenses.

Please note that the Pell Grants are generally available to students who have not yet completed their bachelor’s degrees. The only exception is when you are applying for funding to attend some pre-approved post-baccalaureate teaching programs. 

How do you know if you will get approval for a grant?

The first thing to do is apply for it. You will be asked to fill out the FAFSA application form. Based on the information you provide there, an agency from the Department of Education is going to estimate your Expected Family Contribution, known as EFC. Then a comparison between your EFC and the expected costs of your education is run. Those costs typically include:

  • Tuition and fees
  • Room and board
  • Books
  • Supplies
  • Other essentials

The results from the comparison will determine the amount of money you are eligible to receive in Pell Grants.

Low-Income Students

You must keep in mind that federal funding is designed for low-income students. It is for this reason that the majority of the Pell Grants, and most of the money, go to students whose families report annual income below $20,000. Students with a yearly family income below $50,000 are also known to receive federal grants, so if you fall into that category give the application a try. 

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Amount of Funding

The exact amount of funding you can receive is estimated using a standardized formula, and the information you provide on your student aid FAFSA. Once the process has been finished, you will receive an e-mail that informs you whether or not you are among the grant recipients. They will also let you know the amount of grant funding you are going to receive. The same information will be sent to the school or schools you have chosen on the FAFSA form.

How do I know if I definitely will not be allowed to get federal funding through the Pell Grant Program?

There are several cases where it is not worth applying for a Pell Grant. One of the instances is when your family’s annual income is so high that you can’t reasonably be considered to be a low-income student. High-income students need not apply. The other instance is when you currently reside in a federal or state penal institution. Students who are registered sex-offenders are also ineligible. That’s because incarcerated people and those with serious criminal records are not entitled to receive such funding. These are the only known cases when the Department of Education will disqualify you from the process of being considered for Pell Grants.

How many grants does the government award each year?

There isn’t a fixed number. Every year the federal government determines the budget for the Pell Grants separately. Based on the number of applicants approved, they grant funds to the colleges. If you enroll in school and you receive approval for federal funding, you should rest assured that the scheduled award will be there for you when the time comes. Your college will receive enough funding to pay for all students that are eligible to receive money from the program in question. 

There are over 5,400 post-secondary education institutions that are eligible to receive funding from the Federal Pell Grant Program. So far, there has never been a case in which student grants were left underfunded. This excellent record means that once approved for a grant, you can count on the fact that you are going to receive your federal student’s aid. 

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What is the maximum award amount?

It’s not unusual to be wondering how much money you can receive. After all, you need to know whether going through the application process is worth it. Each year the maximum amount is a little different. In the 2013-2014 academic year, for example, the maximum award was $5,635, while in 2017 it was $5,920. This amount is not a bad sum to receive as financial aid for the degree you hope to earn. It’s hard to guess what the maximum will be next year because it all depends on program funding. 

Factors That Determine Award Amount

Various factors determine your specific award amount. For example, they consider whether or not you are enrolled for a whole academic year or less than that; your full-time or part-time student status, annual Cost of Attendance; and most importantly, your EFC. Remember that you may end up among the students eligible for Pell Grants who do not get the maximum award. The good thing is that since you are eligible for a Pell Grant, the door for you is open to try to get into another federal grant program. So, if you are still in financial need, there are other options for you to choose from. 

How can I be nearly confident of getting the maximum award?

The Department of Education has made it clear that people whose parent died in Iraq or Afghanistan after 9/11  may be eligible for the full amount of the current year’s Pell Grant. They have to fill the information relevant to their case in the FAFSA. If they are enrolled at least part-time in an institute of higher education, are below 24 years of age, and meet the rest of the requirements for receiving the grant, their EFC will be recalculated until it is zero.

However, if you do not meet the requirements for receiving federal student aid through the Pell Grant program, but you are the child of someone killed in the line of duty in Iraq or Afghanistan, you can still apply for the  Iraq and Afghanistan Service Grant. There is no significant difference in the eligibility requirements, and you can apply just as easily by filling out a FAFSA. 

But let’s get back to our main topic here. Let’s say that you have obtained approval for a Pell Grant. What happens next?

How do you get your money?

It is simple. As we have already mentioned, after completing the FAFSA, recipients enter your data into a pre-approved universal formula. This formula is what determines how much federal money you are to receive as financial aid. Your award information is sent not only to you but also to the school you are enrolled in or accepted for enrollment. 

Your school is ultimately responsible for setting up the way you receive your grant money from the Department of Education. Schools can choose to disburse funds by crediting the money to your student financial account, paying you directly, or a combination of the two. Colleges are supposed to make payments at least once per term, that term being a semester, trimester or a quarter. If your college does not have a traditionally-defined term system, it will be required to make payments to you at least twice during the academic year. 

One quick example

For the sake of convenience, let’s say that you are eligible for a $2,000 yearly grant from the Pell program. If you are enrolled full-time for a full academic year consisting of a spring and a fall semester, then you will probably receive one thousand dollars in the fall and another thousand dollars in the spring.

Check out the possibility of getting the so-called “year-round Pell,” which is a settlement in which you can be eligible for one more payment for the summer semester. Practically, if your school allows and you qualify for a year-round Pell, you will be able to receive 150% of the money that you are initially eligible to get. Requirements vary from college to college, so it’s best to ask your financial aid office for more information on the subject. 

Pell Grants

The process is relatively easy, but it requires attention.

When dealing with federal grants, it is essential to know about all the schedules and deadlines. You should also be familiar with any other rules and regulations, such as how they grant funds from the government, what restrictions they are subjected to, etc. Before you graduate from high school and apply for federal funding, make sure that you have answers to all the essential questions. You need to prepare yourself for anything that may come your way during the application process. In particular, you should be more than satisfied that the information you fill in when preparing the application form is correct. 

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Next Steps

Next, make sure that you know about all the deadlines for grant applicants. You should also consult with your school, and find out when they make payments. All this research is essential so you can plan your budget for the academic year accordingly. Lastly, know that there are situations when you can be asked to return the money you have already received in federal financial aid. Be careful about spending everything immediately, because you can find yourself in quite a pickle

What if they ask you to return the money you no longer have? 

It is a sensitive question indeed, but one that requires an honest and exhaustive answer. There are several situations in which you will be required by law to return grant funding. Those include:

  • Changes in enrollment status that affect your eligibility. 
  • You discontinue your studies before finishing.
  • You are eligible for and receive an outside scholarship that covers your costs.


One more reason for the federal government to ask you to return the money you have already received is the so-called “overpayment.” It means that due to a mistake made at the financial aid office, more payment was credited to your account than you were supposed to receive. It’s an honest mistake, but one that can cause some trouble for you. This is true especially if you did not notice the error at first or neglected to contact your financial aid office right away, and have spent the money already. You are required to pay the school back immediately, or due to lack of immediate access to funds, set up a plan to pay what you owe. You have 45 days to respond to a notice of overpayment. Otherwise, you will be subject to legal actions as necessary to recover the money.

So, what do I do to keep my grant funding? 

Directly related to the topic of returning the money you have received is the question about keeping the grant until you need it. The first thing you should know is that you cannot expect to continue receiving funds from the Pell Grant program for more than 12 semesters. That’s the maximum amount of time that is allowed under the current regulations. Naturally, you will be requested to fill out the FAFSA form every school year, and maintain satisfactory academic progress during each semester. 

Failing to Follow the Rules

Failing to do any of these things will affect your eligibility to receive any financial assistance for the next semester. Feel free to check with the office of financial aid at the school you attend, and learn more about what is deemed as “satisfactory academic performance” there. Criteria vary from institution to institution. It is of prime importance to know what goals to set in terms of performance. 

Generally, if you complete your program in the given time-frame, keep your paperwork current, and meet academic standards, you should be able to continue getting aid from the Pell Grant program. With many other programs, it seems that government bureaucracy is intentionally trying to make our lives much harder. However, the process of receiving financial assistance for education purposes was made pretty easy.

What to Ask Your School

As mentioned above, maintaining academic performance at a satisfactory level is one of the three essential requirements to continue receiving a federal Pell Grant. If you are confused about what is required academically and are not sure how to ask the right questions, here are some examples of questions to ask your financial aid counselor at school:

  • How often will you be academically evaluated to determine financial aid eligibility? 
  • How many credits must you complete every year to stay eligible?
  • Do you need to keep a certain grade point average throughout the year?
  • How do incomplete classes, class withdrawals, changes of major or transferred credits affect the status of your academic progress?

A Word of Advice

Once everything about academic eligibility has been explained, you will know what is expected from you academically so that you can continue receiving the aid you’ve qualified for. The best piece of advice that we can give you is to study hard and not skip classes. Keeping the grant you are receiving for the whole duration of your studies is essential to avoid excess debt. What’s more important is that you get the most out of your efforts to obtain a degree, so that you can build a brighter and happier future for yourself. You are lucky because you are getting federal student aid rather than being forced to get a loan. That you will not be paying off a considerable loan for years is something you should appreciate.

Are Pell Grants right for you?

After everything that we have said up until now, you might still be wondering whether or not it is advantageous for you to apply for federal Pell Grants. If you are asking for our advice specifically, then we say go for it. Even if you are not a hundred percent certain that you are eligible for federal aid, it will not hurt to fill out a simple FAFSA form.

You might be pleasantly surprised to learn that you are going to receive some money, and if you are not, then no harm has been done. The application process is free, so the only thing you need to invest upfront is a little bit of your time. Wise people say that there is no such thing as wasted time when getting your education. However, if you are planning instead to research what you are applying for in-depth, you should seek assistance from the financial aid office at your school. They will probably be the most helpful explaining to you how the government grant funds work. 

Tell other people about Pell Grants

If you have saved for college, or if your parents are well-to-do, then your education and how to afford it is not your primary concern. Still, it is essential to spread the word about federal funding programs such as Pell Grants. We are not saying that you should become a spokesperson for the Department of Education, but discussing options with family and friends can be pretty helpful.

You never know when someone has fallen behind on their bills and is in an unfortunate financial situation. Many people are ashamed to tell their acquaintances about such problems and do not seek student aid. Casually mentioning the Pell Grants and how easy it is to get them can save someone’s education. So, when you have the chance to do that, talk about what you have been reading here. You never know what type of kindness you will be doing for someone and how this might pay off for you in the future. 

Tell Us More

In case you have any questions whatsoever concerning the Pell Grants and how they work, please feel free to drop us a line. Let us what you think about the federal government helping students with paying for their education. What steps would you recommend to optimize the process and help even more people succeed? If you have already benefited from the Pell Grant program, feel free to share tips! 

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Charles Cooke

Don’t need to go to school just need part time work I’m retired need extra cash. Thanks a lot for your help.

Nora Borosak

Hi Charles,

Thank you for reading! I highly recommend you read this article of ours to guide you in the right direction of making some extra cash:

We have a bunch of articles under the “Money” and “Personal Finance” sections that would be very helpful to you!

Leslie Hehr

I need schooling

Nora Borosak

Hi Leslie,

Thank you for reading! You can read our article about saving for college for some tips! Stay tuned for more helpful articles and good luck with school!!


Thanks for your help. I am going back to school need all the help.

Nora Borosak

Hi Jennifer,

It’s great to hear you are going back to school! Here are some great tips on saving for college:

Thanks for reading!

Roy haney

I am 67 years old, never had a student loan and never will!

Nora Borosak

Hi Roy,

That’s amazing! Not very many people can say that they have never had a student loan. Thank you for reading and stay tuned for more articles!


Hi nora I like to finesh school first than later think about a Job, still looking fowerd to my test exam before I go any further than I’ll think about a job.

Nora Borosak

Hi David,

Good luck with school! We have some articles that offer great advice for students, be sure to check those out. Thanks for reading!

Here’s one: