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Federal Pell Grants - A Guide to the Federal Pell Grant Program

Understanding the Benefits and Rules of Federal Pell Grants


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Nick White/ DIgital Vision/ Getty Images

Overview of the Federal Pell Grant Program:

Federal Pell Grants are the most widely available type of grant program for undergraduate students. Unlike the Federal loan programs (Stafford, Perkins, PLUS, etc.), Pell Grant awards never need to be repaid.

Federal Pell Grants are made available to students based on a number of factors, all of which are connected to a student’s "Expected Family Contribution" (EFC). In other words, Pell Grants are given to students who demonstrate a significant financial need.

Federal Pell Grant Award Limits:

The maximum Pell Grant award can change annually based on the amount of Federal funds made available for the program. The percentage of this maximum amount that a student receives is directly affected by the student’s Expected Family Contribution (EFC), Cost of Attendance (COA), and status (full-time, half-time, etc.).

For the 2009-2010 school year, the maximum Pell Grant amount is $5,350.

Unlike many of the Federal loan programs that have lifetime caps on borrowing, the Pell Grant does not currently have a lifetime maximum on awards. As long as a student is pursuing their first bachelors degree and is otherwise eligible, they can receive Pell Grant funds.

Pell Grants and the Expected Family Contribution (EFC):

Federal Pell Grants are awarded to individuals based on their Expected Family Contribution (EFC), which is calculated using the assets and income of both the student and their parents. As a student’s Expected Family Contribution rises, their potential Pell Grant amount decreases. Above a certain EFC level, no Pell Grant will be awarded.

For the 2009-2010 school year, the maximum EFC level that can still receive a partial Pell Grant is $4,617.

Pell Grants and the Cost of Attendance (COA):

Pell Grant award amounts are affected by a student’s Cost of Attendance for their college or university. The greater the Cost of Attendance, the closer the student will get to receiving the maximum Pell Grant amount.

For the 2009-2010 school year, the minimum Cost of Attendance required to receive the full Pell Grant amount is $4,860.

Pell Grants and Student Status:

Pell Grant award amounts are also affected by a student’s attendance status. Full-time students are eligible to receive the largest grant amounts, with three-quarter, half-time, and less than half-time students receiving less. It’s worth noting that the Pell Grant is one of the few programs that makes money available to students attending less than half-time.

For the 2009-2010 school year, the maximum Pell Grant award per category is:

  • Full-time: $5,350
  • 3/4-Time: $4,013
  • 1/2-Time: $2,675
  • Less Than ½-Time: $1,338

Pell Grants for Graduate Students:

Pell Grants are primarily available to undergraduate students. However, certain graduate teacher credentialing programs may also be eligible.

Applying for a Federal Pell Grant:

To be considered for a Pell Grant, you must complete a FAFSA form. Completing this form will help determine your eligibility for other loan and aid programs as well. Once completed, the Free Application for Federal Student Aid (FAFSA) form is forwarded to your school, which will then inform you of your Pell Grant eligibility.

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