The Federal Pell Grant Program is a program designed to allow access to higher education for student’s with low income. A grant does not require repayment, which is how it differs from a loan. The grant is a needs based grant. Over 5400 institutions in the United States currently participate in the federal Pell grant program.
To be eligible for a Pell grant the student must have a high school diploma or GED, cannot have earned a bachelor degree and must be a United States Citizen.
Determining eligibility for a Pell grant is based upon student need. Several factors are taken into consideration, such as if the student is attending school full time or part time, how much the institution costs to attend and the expected family contribution.
The United States Department of Education is the department that determines the need of the student and makes payment of the Pell grant to the learning institution. A standard formula is used by the student filling out a free application for student aid (FAFSA). This form is used to determine the family’s expected contribution. The expected family contribution takes information regarding the family’s income and assets, the number of members of the family regarding size and the number of family members currently attending college, the student’s income and assets, etc. After a student has filed an FAFSA they will receive a report from the Department of Education informing them of their EFC (expected family contribution) and reporting to them if they are eligible for a Pell grant.
Pell grants are not for any certain set amount. The amounts will differ based upon student need. The maximum Pell grant allowed for the 2010-2011 academic year was $5,550. Institutions have varying policies as to how they distribute the money. They may simply apply the amount to the student’s account, pay the entire amount directly to the student or use a combination of both methods. The Pell grant program stipulates that students must be paid at least one time per term.