The government gives out billions of dollars in aid each year, some of that going toward students who received the Federal Pell Grant. But what is it? And how does it work?
What is the Pell Grant?
The Pell Grant is one of many federal grants the government provides to help students pay for their college expenses.
Who is Eligible for the Pell Grant?
Usually, undergraduate college students who demonstrate financial need are eligible for this grant. You can’t have already earned a bachelor’s degree or higher. However, in some cases, students working toward a post-baccalaureate degree in teaching may still be eligible to receive the Pell Grant. Talk to your school’s financial aid office for more information on this.
Other factors such as your enrollment status and how long you’re going to be in school also determine your eligibility.
How Much is a Pell Grant?
The full amount of the Pell Grant currently is $6495. This amount is subject to change each school year, but it’s usually around $6000. Keep in mind, though, that the amount you will receive will depend on both your cost of attendance (COA) and your estimated family contribution (EFC). The lowest you’ll ever receive is 10% of the full amount, so about $650 based on the current numbers. In special cases, students whose parent(s) or guardian(s) died in military service in Iraq or Afghanistan after 9/11 may be able to receive more money. Check with your school’s financial aid office for more information if you think this applies to you.
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Do You Have to Pay Back the Pell Grant?
Generally, no. Since it’s a grant, you won’t have to pay it back. There are some exceptions to that rule:
If You Drop Out
Some students receive the Pell Grant to help them pursue a certain program. If this is your case and you end up dropping out, then you’d have to repay.
If Your Financial Need Changes
Receiving other scholarships and grants after accepting the Pell Grant reduces your need for financial aid. In that case, you might have to pay back any money that was already given to you.
If Your Enrollment Status Changes
If you switch from full-time to part-time, that would also be grounds for having to repay the grant money.
Don’t worry too much about this though. If you do have to repay the grant, your school will notify you. From there, you’ll have 45 days to either pay it back in full or enter into a repayment arrangement.
How and When to Apply for a Pell Grant
To be able to receive a Pell Grant, fill out the FAFSA form as soon as it’s available. Be sure to repeat this every year you’re in school to continue to receive the grant.
Pell Grant Disbursement
Usually, your college will receive your grant funds. They’ll automatically apply them to any school-related costs you have. You’ll receive any leftover money in payments called disbursements. Schools are required to give out at least two grant disbursements per year. Most schools typically do this once per term.
Another important detail is that the funds can only be used toward one school. For example, if you’re dually enrolled, you’ll only be able to use the money to help pay for the costs of one of the schools.
Additionally, you can only receive the Pell Grant for 12 terms or until you receive a bachelor’s degree. Your Pell lifetime eligibility used, or LEU, determines how many terms you have left. You can check this by logging into your Financial Student Aid account and going to the My Aid tab.
Other Federal Educational Grants
There are other educational grants that are a part of federal student aid. Here’s a quick overview of them:
Federal Supplemental Educational Opportunity Grant (FSEOG)
This grant is usually awarded to undergraduate students who have exceptional financial need and have not earned a bachelor’s degree or higher. The award amount can range anywhere from $100 to $4000 a year. It is important to note that not all schools participate in this. If your school does, they’ll only receive a set amount of money to give out to eligible students. Pell Grant recipients have first priority to receive the money. Because of this, be sure to fill out your FAFSA as soon as it’s available.
Iraq and Afghanistan Service Grant
This grant is usually available to students whose parent or guardian was a part of the U.S. Armed Forces and died as a result of military service in Iraq or Afghanistan after 9/11. You must have been either under 24 years of age or enrolled in college at least part-time at the time of their death. You also must be ineligible to receive the Pell Grant on the basis of your EFC. You do, however, have to meet the rest of the requirements for a Pell Grant. Because of the Budget Control Act of 2011, the award amount is currently about $6124 for grants disbursed between October 1, 2021, and October 1, 2022. Normally, the maximum award amount is the same as the Pell Grant.
Teacher Education Assistance for College and Higher Education Grant (TEACH)
This is usually for undergraduate, post baccalaureate, or graduate students who are enrolled in a TEACH Grant-eligible program. You have to agree to teach in a high-need field for 4 years at an elementary or secondary school that serves low-income students. Typically, you have to complete this service within 8 years of finishing your program. Failure to do so will turn your grant into a direct unsubsidized loan. As a result of the Budget Control Act of 2011, the current award amount is about $3772 for grants disbursed between October 1, 2021, and October 1, 2022. Normally, the grant can provide up to $4000 per year.
All of the grant awards are subject to change each year.
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Ascent
Ascent’s undergraduate and graduate student loans are funded by Bank of Lake Mills, or DR Bank, each Member FDIC. Loan products may not be available in certain jurisdictions. Certain restrictions, limitations; and terms and conditions may apply. For Ascent Terms and Conditions please visit: www.AscentFunding.com/Ts&Cs. Rates are effective as of 12/1/2024 and reflect an automatic payment discount of either 0.25% (for credit-based loans) OR 1.00% (for undergraduate outcomes-based loans). Automatic Payment Discount is available if the borrower is enrolled in automatic payments from their personal checking account and the amount is successfully withdrawn from the authorized bank account each month. For Ascent rates and repayment examples please visit: AscentFunding.com/Rates. 1% Cash Back Graduation Reward subject to terms and conditions. Cosigned Credit-Based Loan student must meet certain minimum credit criteria. The minimum score required is subject to change and may depend on the credit score of your cosigner. Lowest rates require full
principal and interest payments, the shortest loan term, a cosigner, and are only available for our most creditworthy applicants and cosigners with the highest average credit scores. Actual APR offered may be higher or lower than the repayment examples above, based on the amount of time you spend in school and any grace period you have before repayment begins.
Ascent’s undergraduate and graduate student loans are funded by Bank of Lake Mills, or DR Bank, each Member FDIC. Loan products may not be available in certain jurisdictions. Certain restrictions, limitations; and terms and conditions may apply. For Ascent Terms and Conditions please visit: www.AscentFunding.com/Ts&Cs. Rates are effective as of 12/1/2024 and reflect an automatic payment discount of either 0.25% (for credit-based loans) OR 1.00% (for undergraduate outcomes-based loans). Automatic Payment Discount is available if the borrower is enrolled in automatic payments from their personal checking account and the amount is successfully withdrawn from the authorized bank account each month. For Ascent rates and repayment examples please visit: AscentFunding.com/Rates. 1% Cash Back Graduation Reward subject to terms and conditions. Cosigned Credit-Based Loan student must meet certain minimum credit criteria. The minimum score required is subject to change and may depend on the credit score of your cosigner. Lowest rates require full
principal and interest payments, the shortest loan term, a cosigner, and are only available for our most creditworthy applicants and cosigners with the highest average credit scores. Actual APR offered may be higher or lower than the repayment examples above, based on the amount of time you spend in school and any grace period you have before repayment begins.
LendKey
1 – Terms and Conditions Apply
Loan products, terms, and benefits may be modified or discontinued by participating lenders at any time without notice. Rates displayed are reserved for the most creditworthy consumers who enroll to make automatic monthly payments. Your initial rate will be determined after a review of your application and credit profile. Variable rates may increase after consummation. You must be either a U.S. citizen or Permanent Resident in an eligible state and from an eligible school, and meet the lender’s credit and income requirements to qualify for a loan. Certain membership requirements (including the opening of a share account, a minimum share account deposit, and the payment of any applicable association fees in connection with membership) may apply in the event that an applicant wishes to apply with, and accept a loan offered from, a credit union lender. If you are not a member of the credit union lender, you may apply and become a member during the loan application process if you meet the lender’s eligibility criteria. Applying with a creditworthy cosigner may result in a better chance of loan approval and/or lower interest rate. Loans for exam preparation classes, including, but not limited to, loans for LSAT, MCAT, GMAT, and GRE preparation, are not available via LendKey.com.
2 – Cosigner Release
Some lenders participating on LendKey.com may offer the benefit of cosigner release. Cosigner release is subject to lender approval. In order to qualify, the borrower, alone, must meet the following requirements: (1) Make the required number of consecutive, on-time full principal and interest payments as indicated in the borrower’s credit agreement during the repayment period (excluding interest-only payments) immediately prior to the request. Any period of forbearance will reset the repayment clock; (2) The account cannot be in delinquent status; (3) The borrower must provide proof of income indicating that he/she meets the income requirements and pass a credit review demonstrating that he/she has a satisfactory credit history and the ability to assume full responsibility of loan repayment; (4) No bankruptcies or foreclosures in the last sixty months; and (5) No loan defaults.
3 – Autopay Rate Reduction
Subject to floor rate and may require the automatic payments be made from a checking or savings account with the lender. The rate reduction will be removed and the rate will be increased by 0.25% upon any cancellation or failed collection attempt of the automatic payment and will be suspended during any period of deferment or forbearance. As a result, during the forbearance or suspension period, and/or if the automatic payment is canceled, any increase will take the form of higher payments.
4 – AutoPay Discount & Lowest Interest Rate
Subject to floor rate and may require the automatic payments be made from a checking or savings account with the lender. The rate reduction will be removed and the rate will be increased by 0.25% upon any cancellation or failed collection attempt of the automatic payment and will be suspended during any period of deferment or forbearance. As a result, during the forbearance or suspension period, and/or if the automatic payment is canceled, any increase will take the form of higher payments. The lowest advertised APR is only available for loan terms of 10 years and is reserved for the highest qualified applicants, taking into consideration the applicant’s credit and other factors.
1 – Terms and Conditions Apply
Loan products, terms, and benefits may be modified or discontinued by participating lenders at any time without notice. Rates displayed are reserved for the most creditworthy consumers who enroll to make automatic monthly payments. Your initial rate will be determined after a review of your application and credit profile. Variable rates may increase after consummation. You must be either a U.S. citizen or Permanent Resident in an eligible state and from an eligible school, and meet the lender’s credit and income requirements to qualify for a loan. Certain membership requirements (including the opening of a share account, a minimum share account deposit, and the payment of any applicable association fees in connection with membership) may apply in the event that an applicant wishes to apply with, and accept a loan offered from, a credit union lender. If you are not a member of the credit union lender, you may apply and become a member during the loan application process if you meet the lender’s eligibility criteria. Applying with a creditworthy cosigner may result in a better chance of loan approval and/or lower interest rate. Loans for exam preparation classes, including, but not limited to, loans for LSAT, MCAT, GMAT, and GRE preparation, are not available via LendKey.com.
2 – Cosigner Release
Some lenders participating on LendKey.com may offer the benefit of cosigner release. Cosigner release is subject to lender approval. In order to qualify, the borrower, alone, must meet the following requirements: (1) Make the required number of consecutive, on-time full principal and interest payments as indicated in the borrower’s credit agreement during the repayment period (excluding interest-only payments) immediately prior to the request. Any period of forbearance will reset the repayment clock; (2) The account cannot be in delinquent status; (3) The borrower must provide proof of income indicating that he/she meets the income requirements and pass a credit review demonstrating that he/she has a satisfactory credit history and the ability to assume full responsibility of loan repayment; (4) No bankruptcies or foreclosures in the last sixty months; and (5) No loan defaults.
3 – Autopay Rate Reduction
Subject to floor rate and may require the automatic payments be made from a checking or savings account with the lender. The rate reduction will be removed and the rate will be increased by 0.25% upon any cancellation or failed collection attempt of the automatic payment and will be suspended during any period of deferment or forbearance. As a result, during the forbearance or suspension period, and/or if the automatic payment is canceled, any increase will take the form of higher payments.
4 – AutoPay Discount & Lowest Interest Rate
Subject to floor rate and may require the automatic payments be made from a checking or savings account with the lender. The rate reduction will be removed and the rate will be increased by 0.25% upon any cancellation or failed collection attempt of the automatic payment and will be suspended during any period of deferment or forbearance. As a result, during the forbearance or suspension period, and/or if the automatic payment is canceled, any increase will take the form of higher payments. The lowest advertised APR is only available for loan terms of 10 years and is reserved for the highest qualified applicants, taking into consideration the applicant’s credit and other factors.
Earnest
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College Ave
College Ave Student Loans products are made available through Firstrust Bank, member FDIC, First Citizens Community Bank, member FDIC, or M.Y. Safra Bank, FSB, member FDIC. All loans are subject to individual approval and adherence to underwriting guidelines. Program restrictions, other terms, and conditions apply.
(1) All rates include the auto-pay discount. The 0.25% auto-pay interest rate reduction applies as long as a valid bank account is designated for required monthly payments. If a payment is returned, you will lose this benefit. Variable rates may increase after consummation.
(2) As certified by your school and less any other financial aid you might receive. Minimum $1,000.
(3) This informational repayment example uses typical loan terms for a freshman borrower who selects the Flat Repayment Option with an 8-year repayment term, has a $10,000 loan that is disbursed in one disbursement and a 7.78% fixed Annual Percentage Rate (“APR”): 54 monthly payments of $25 while in school, followed by 96 monthly payments of $176.21 while in the repayment period, for a total amount of payments of $18,266.38. Loans will never have a full principal and interest monthly payment of less than $50. Your actual rates and repayment terms may vary.
Information advertised valid as of 12/2/2024. Variable interest rates may increase after consummation. Approved interest rate will depend on creditworthiness of the applicant(s), lowest advertised rates only available to the most creditworthy applicants and require selection of the Flat Repayment Option with the shortest available loan term.
College Ave Student Loans products are made available through Firstrust Bank, member FDIC, First Citizens Community Bank, member FDIC, or M.Y. Safra Bank, FSB, member FDIC. All loans are subject to individual approval and adherence to underwriting guidelines. Program restrictions, other terms, and conditions apply.
(1) All rates include the auto-pay discount. The 0.25% auto-pay interest rate reduction applies as long as a valid bank account is designated for required monthly payments. If a payment is returned, you will lose this benefit. Variable rates may increase after consummation.
(2) As certified by your school and less any other financial aid you might receive. Minimum $1,000.
(3) This informational repayment example uses typical loan terms for a freshman borrower who selects the Flat Repayment Option with an 8-year repayment term, has a $10,000 loan that is disbursed in one disbursement and a 7.78% fixed Annual Percentage Rate (“APR”): 54 monthly payments of $25 while in school, followed by 96 monthly payments of $176.21 while in the repayment period, for a total amount of payments of $18,266.38. Loans will never have a full principal and interest monthly payment of less than $50. Your actual rates and repayment terms may vary.
Information advertised valid as of 12/2/2024. Variable interest rates may increase after consummation. Approved interest rate will depend on creditworthiness of the applicant(s), lowest advertised rates only available to the most creditworthy applicants and require selection of the Flat Repayment Option with the shortest available loan term.
Final Thoughts from the Nest
A Pell Grant is a great way to get money for school, especially if you’re in a tough financial situation. The best part is you most likely won’t have to pay it back. So, be sure to fill out the FAFSA as early as you can to increase your chances of getting some stress-free money.