What is a Pell grant

A Pell Grant is one of several federal education grants offered to domestic undergraduate college students in the United States. Grants are a type of gift aid, meaning that they do not need to be repaid, and can be used to pay qualified educational expenses, including tuition, fees, and books and supplies. Formerly known as the Basic Educational Opportunity Grant, the Pell Grant was first offered in 1965 as part of then president Lyndon B. Johnson’s Higher Education Act. This was started in an effort to make higher education accessible to more people, specifically low-income individuals. In 1978, it was renamed the Pell Grant in honor of Rhode Island state senator Claiborne Pell, who worked on the 1972 reauthorization and 1978 expansion of the Pell grant to make eligible both low- and middle-income families.

The definition of low-income has been fluid, but current conventions for determination of eligibility for financial aid state that low-income families are those with a total family income of $20,000-$25,000 or less. Although middle-income families, with an income cut-off of $50,000 or less, are eligible for Pell grants, it is not likely that they will be awarded, as the grants are given first to the students with the most need. More recent reauthorization efforts have failed to expand the program despite an increase in the matriculation of low-income college students to participating universities, meaning a higher demand for a more limited resource.

This grant serves as a base grant, meaning that it will serve as one of the primary sources of financial aid, and will then be supplemented by additional grant and loans depending on student need. For example, if your expected cost of attendance is $20,000 annually, and your expected family contribution is zero, you will be awarded the maximum Pell Grant, which sits at $6,095 for the 2018-2019 academic year. Your remaining need ($13,905) will be supplemented by any other grants for which you are eligible, followed by different types of loans. The amount of Pell Grant you are awarded will be determined on various factors including your cost of attendance as determined by the university and expected family contribution, which is determined by the information you provide on your Free Application for Federal Student Aid (FAFSA).

It is important to note that although most major universities accept Pell Grant funding, many universities and career colleges do not. In order to be able to accept Pell Grants as payment for cost of attendance, universities must apply to participate in the Federal Student Aid Programs. The Department of Education keeps a publicly accessible list of schools that are approved to accept this type of aid, so it is quite simple to determine if the schools you are applying to are participants.