Pell Grants 101: Everything You Need to Know

Financial aid comes in many different forms: need-based scholarships, grants, work study and loans. All these components work together to make attending college an achievable dream for every student. Like scholarships, grants do not have to be repaid, and students can qualify for grants from a variety of sources. Grants can be awarded by the federal and state governments, colleges and public or private organizations. Oftentimes, grant money fills the gap between the sticker price of a college and what a family can realistically pay . The Pell Grant is a federally funded grant program that has been around since 1965. Fortunately, the program today is bigger than ever, in dollars awarded and students helped. More students are set to earn the $7,395 maximum Pell Grant award for the 2024-2025 award year!

What is the Pell Grant?

The Pell Grant is a federally funded grant that is available to undergraduate students. It is typically awarded to students that demonstrate exceptional need based on the family’s ability to pay for college. Students that earn the Pell Grant do not have to pay it back! Historically, the Pell Grant has aimed to help low-income students turn the dream of attending college into a reality. Naturally, in low- socioeconomic circumstances, attending college can seem like an impossibility. The goal of the Pell Grant is to encourage and then provide financial support for students that may have difficulty paying for college in any capacity. Because of this, the Pell Grant has been responsible for increasing college enrollment and has been attributed to enhancing student retainment. When students have the security of financial help, they are more likely to attend – and stay in college.

How do I get a Pell Grant?

Students can reach Pell Grant eligibility the same way they would any other form of financial aid: by filling out the Free Application for Federal Student Aid (FAFSA). The FAFSA update will give an additional 610,000 new students from low-income backgrounds access to Pell Grants. Nearly 1.5 million more students will receive the maximum Pell Grant award for the 2024-25 FAFSA award year, according to the U.S. Department of Education.

It is recommended that students complete the FAFSA as soon as possible, given that the financial aid is distributed on a first-come, first-serve basis. However, the FAFSA does have an 18-month application cycle and can be submitted as late as June 30 of the following year it is released. The FAFSA will ask about both the student and parents’ financial circumstances and use that information to determine the Student Aid Index (SAI). A combination of incomes and assets, family size, Federal poverty guidelines, and state of residence are used to determine the Pell Grant amount a student will get. Once the SAI is determined, the student will receive a FAFSA Submission Summary or the school will receive an Institutional Student Information Record (ISIR). The FAFSA Submission Summary will give the student an estimate of his/her Federal Student Aid awards, including their estimated Pell Grant total. It’s important to complete the FAFSA every year as financial circumstances can change from year to year. If financial circumstances change substantially after the FAFSA is filed, students can appeal their financial aid award package.

How much is the Pell Grant?

The amount a student can receive in their Pell Grant can change annually. The maximum Pell Grant award for the 2024-25 award year is $7,395. However, a student can only receive the maximum Pell Grant award for six years. The Pell Grant minimum for the 2024-25 award year is $750 per student. Just like your family’s financial circumstances determine if you qualify for the Pell Grant, they also control how much grant money you earn. The cost of attendance, full- or part-time student status, and whether you plan to attend for a full academic year, are considered when determining your Pell Grant award total. The Pell Grant can be disbursed to a student in many ways. Students pick if their Pell Grant goes directly toward their tuition bill, a personal check, or a combination of both methods.

What student costs does my Pell Grant cover?

Finally, Pell Grants can help to cover a myriad of student expenses: • Tuition and fees • Books, supplies, transportation and personal expenses • Living expenses, like room and board • Dependent care (i.e. day care) for a student with dependents If you have a question about whether your Pell Grant covers a specific aspect of your education, talk to a financial aid administrator at your school. In fact, if you have any questions about the Pell Grant at all, your financial aid office should be your first point of contact. They can walk you through the application process via the FAFSA, help you best allocate your Pell Grant funds, and provide advice as you navigate the program through your college years.