Pell Grant

What Is A Pell Grant?

A Pell Grant is the financial aid the U.S federal government awards to undergraduate students. Unlike student loans, beneficiaries of the grant do not have to pay it back.

Deeper Definition

A Pell Grant is a federal financial aid awarded to undergraduate students and some postbaccalaureate students. It is based on their financial needs. The U.S. Department of Education awards the grant to eligible students. This is to help cover college costs, including tuition, fees, hostel, and other educational expenses.

Since its creation in 1972 by the Higher Education Act of 1965, the Pell Grant program has become highly sort after by low-income undergraduates. This is because, unlike student loans, the grant does not need to be repaid. 

To apply for the grant, students and their parents must complete the Free Application for Federal Student Aid (FAFSA) form available online. The FAFSA form asks for relevant information, including details regarding the students’ and parents’ finances. Based on the information provided in the form, financial aid officers at participating institutions would determine how much money to offer the student. Approximately 5,400 institutions are participating in the program.

Usually, the grant is used first to cover the student’s tuition for the degree program they want to pursue and fees for room and board. Whatever money remains, if any, goes to the funding of other expenses such as books, feeding, transportation (if the student stays out campus), etc. 

Pell Grants Example 

The amount of money a student receives as a Pell Grant depends on their Expected family contribution (EFC), the attendance cost of the chosen institution, and the amount of the academic year needed to complete the degree program. 

Charles is an exceptionally brilliant student who wishes to study engineering in college. However, his parents cannot afford tuition nor other expenses that sending him to college would attract. Having heard of the Pell Grants, they apply online by providing relevant information about their financial status. Their application is successful, and Charles gets the grant which covers his tuition fee, accommodation, and other expenses. Since the Pell Grant is not a loan, Charles is not under any obligation to repay.