Pell Grant is a need-based federal grant for undergraduate students who have not yet earned a bachelor’s degree and who demonstrate financial need through the FAFSA.
How it is measured
The Department of Education calculates the scheduled award from the FAFSA data and the institution’s cost of attendance. The actual disbursement is prorated by enrollment intensity (full-time, three-quarter-time, half-time, or less-than-half-time). Lifetime eligibility is capped at the equivalent of six years of full-time awards (600 percent).
Example: a full-time undergraduate with a Student Aid Index of 0 and a cost of attendance of $20,000 receives the maximum Pell Grant for the year (amount set annually by Congress). A half-time student with the same aid index receives roughly half the scheduled award for that payment period.
How it differs
Direct Loans must be repaid. Institutional and state grants are separate from Pell. Net price calculations on College Scorecard subtract average Pell and other grant aid from cost of attendance for aided students. FAFSA is the application; Pell is one of the programs the application can unlock.
Common errors
Assuming graduate students can receive Pell Grants. Treating the maximum award as the amount every eligible student receives. Ignoring the lifetime limit when planning multi-year enrollment.
References
- 1. Federal Student Aid Pell Grant overviewNeed-based undergraduate grant
- 2. College Scorecard net price methodologyPell as component of grant aid in net price
Pell Grant is a need-based federal grant for undergraduate students who have not yet earned a bachelor’s degree and who demonstrate financial need through the FAFSA.