What are Pell Grants?

Being one of the most popular federal grants among the low-income undergraduates, the Pell grant, categorized under educational grants, is the monetary grant provided to students by the US federal government for paying tuition fees for their college. It is usually considered as the foundation of the financial aid package of a student. It is provided to a student only for bachelor's education programs.

Pell Grant was originally known as the Basic Educational Opportunity Grant. The United States Department of Education determines the student's financial needs and sponsors the grant accordingly. Over 5,400 institutions all over the U.S. have participated in this grant program. Candidates will be able to receive the grant for a maximum duration of 6 years only. The grant amount that candidates are awarded differs from person to person based on many external factors.

How are Pell Grants Calculated?

The US government uses a standard formula to determine whether a student is eligible for getting the Pell grant. Using this standard formula, an Expected Family Contribution/EFC number is generated, and according to the divisions made, the amount of grant to be offered is decided. The financial information provided by the candidate in the FAFSA application is taken into consideration along with factors like the income of the candidate’s immediate family, household size, assets, etc.

The EFC is calculated by adding: (1) a proportion of net income i.e., the outstanding income left after subtracting stipend for essential livelihood taxes and expenses and (2) a proportion of net assets i.e. assets outstanding after subtracting an asset protection stipend. Other factors that are considered in the calculation include the cost of attendance for the program the candidate has applied to and the duration of their course. They also take into consideration whether the candidate is doing the course full-time or part-time.

Eligibility Requirement for Pell Grants

A student has to be an undergraduate during the time of application, must be:

• a U.S. Citizen or an eligible non-citizen
• must have completed their high school education and must carry a high school diploma or any other equivalent certificate
• must not be a recipient of any full scholarship from any other institution or organization

A student is not eligible for a Pell grant if they have completed their bachelor's program or registered in some post-bachelor program.

Applying for Pell Grants

For applying as a candidate for the Pell Grant, the student must complete the Free Application for Federal Student Aid (FAFSA) form completely. The application process must be done before making any college admission process. Filling the form can be done online through the official website. It can also be done offline through the Pell grant counselor present in the college.

It is recommended that candidates create an FSA ID in order to start the FAFSA form. For creating this account, the candidate must provide their name and social security number after which they will be able to start their application. They will be prompted to provide their personal details like name and date of birth. Once the application has been completed, candidates are required to print out the form and mail the PDF for processing.

Documents Required for Pell Grants Application

While applying for the Pell Grants, it is important that the candidate gather all the documents required before initiating the process. This process will require the inclusion of their parent in order to provide accurate details regarding income and tax-related information.

The documents that are required by candidates for the application process are as follows-

• Social Security Number of the Student.
• Social Security Number of Parent if the candidate is dependent.
• Driver’s License Number, if any.
• Alien Registration Number if the candidate is not a US Citizen.
• Federal Tax Information/Tax Returns including IRS W-2 information- including the same information of the candidate’s spouse, if married; and parent, if dependent.
• Record of Untaxed Income
• Information Regarding Cash-Savings and Account Balance

Grant Amount for Pell Grants

The Pell grant is awarded to a candidate once per term. The maximum amount awarded to candidates for the year 2021-2022 is $6,495. This grant amount is provided to facilitate the student's college fees, accommodation, and other miscellaneous expenses. The remaining amount, if any left can be used by the student for his personal expenses. This remaining amount can be ordered by the student as direct cash, check, or bank account transfer.

If the candidate is allotted a certain sum of money through the grant, they might receive the same either across semesters or can even receive an additional amount depending on the cost of attendance. This situation where candidates receive 150% of their grant amount is termed as year-round Pell. Candidates will be paid through their school, directly or as a combination of both based on the decisions of the school.

Renewing the Pell Grants Scholarship

The grant recipients need to annually update their academic records as they progress in college. Along with this the candidate also needs to submit their parent's/guardian's income status and information and their required amount of grant. The candidate needs to fill a new FAFSA form each year post 1st of January thereby confirming their requirement for the grant. Once the application process is completed and approved, the student is informed via regular postal delivery or email if funding is awarded. Parents or students are advised to always produce copies of the confirmation sheet and keep them for personal records.

In order to renew their grant, they must log in to the FAFSA home page with their ID after confirming that they are a student. They will have to click on the FAFSA Renewal option available which will prefill most of the form for the candidate. Candidates can then focus only on updating the necessary content.

Termination of the Pell Grants

Candidates will have their financial aid revoked if:

• they choose to drop out of the course due to any reason
• they are charged with a drug-abuse-related offense
• they fail to maintain their performance in college

Failure to adhere to these conditions will result in the termination of the grant.

Some Points to Remember

• Pell Grants are sometimes also available for post-baccalaureate teacher certification programs.
• Pell Grant funds are not taxable income.
• Pell Grant has a lifetime limit. It cannot be availed for more than 6 years or 12 semesters.
• The maximum amount of Pell grant that can be granted to a student changes every year.
• The candidate will be eligible for an additional grant if their parent or guardian died while working in the military or in the line of duty, provided the candidate was less than 24 years old or already enrolled in an educational program at the time of such loss.