Pell Grant: What it is, who’s eligible, and how to get one

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Get money for your education that doesn’t have to be paid back.

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A college education can be an integral part of realizing the American Dream, but paying for college is proving a challenge for many young people. As a result, more and more students are relying on financial aid to fund their educational goals.

The cornerstone of financial aid in the United States is the Pell Grant. Since 1973, the Pell Grant program, administered by the U.S. Department of Education, has provided eligible students with money for college that doesn’t need to be paid back. In its first year, it awarded grants to 176,000 students; in the fiscal year that ended September 30, 2021, more than six million students received Pell Grants totaling about $26 billion.

Pell Grants are available to students pursuing an undergraduate degree who have no previous degrees and can demonstrate “exceptional financial need.” To be considered for aid, you must be a U.S. citizen or national, or eligible noncitizen. Temporary residents are ineligible.

If trade school is your current path, accredited trade schools are eligible as long as the course program lasts longer than 15 weeks.

If a parent died as a result of active military or public safety service, you may be eligible to receive the maximum Pell Grant award.

In some instances, a student pursuing a post-baccalaureate teaching certificate may qualify for a Pell Grant.

As of July 1, 2023, Pell Grant eligibility was reinstated for the first time since 1994 for inmates enrolled in a prison education program that can lead to a certificate or degree.

Pell grants can be used to pay for many college expenses:

Students receiving Pell Grants are required to sign a statement promising they’ll use the funds for educational expenses. If you misuse the money, you’ll have to pay the government back.

To apply for aid, students must fill out a form known as the Free Application for Federal Aid (FAFSA). As the name implies, there is no cost to fill out the FAFSA. When applying, you’ll be asked about your family’s income and assets, how many people are in the student’s family, and more.

When your FAFSA is complete, the Department of Education will use the information to calculate your expected family contribution (EFC). Student income and assets factor more heavily into the equation than parents’. And students who are independent—meaning they don’t rely on a parent or guardian for support—don’t need to include their parents’ income.

The resulting expected family contribution represents how much the government believes you can pay toward your college education each year. The lower your expected family contribution, the greater your need for financial aid and the higher your award will be.

Another factor in determining the amount of aid you’ll receive is the cost of attendance (COA). For Pell Grant purposes, the cost of attendance is the estimated sticker price of attending a particular school full time. The cost of attendance is provided by each school and readily available on its website.

By subtracting your expected family contribution from a school’s unique cost of attendance, you’ll arrive at the amount of aid you’ll need to attend every school listed on your FAFSA. If you choose a cheaper school, you may not receive any aid, while a more expensive school may require you to seek additional funding.

Your actual award also depends on your status (full- or part-time) and whether you’ll attend for a full academic year (two terms). Students who enroll for a third term within a given school year (usually summer courses) may be entitled to receive 150% of their original award, known as a year-round Pell.

The maximum allowable award amount for the 2023–24 school year is $7,395. The Department of Education announces the revised award for the upcoming school year each February.

For the 2024–25 school year, the expected family contribution formula is scheduled to be retired and replaced by the Student Aid Index (SAI), a slightly different formula than the expected family contribution.

Certain circumstances may trigger a student to lose Pell Grant eligibility. Dropping out of school, withdrawing from courses, or having a low grade point average (GPA) may prompt the Department of Education to demand the money be returned.

You must reapply for a Pell Grant every year by submitting a new FAFSA.

College-bound students are often bombarded with offers from companies willing to help them find and apply for financial aid—for a price. Although not all of these companies are dishonest, they may charge exorbitant fees for advice you can get freely from a college’s financial aid office, your high school counselor, or the Federal Student Aid website.

Be leery of companies that ask you for payment information up front—they may be trying to scam you. Companies that use high-pressure tactics or make guarantees should also raise red flags.

Pell Grants have made attending college possible for millions of students by offering financial aid that doesn’t have to be paid back—unlike student loans. Find out if you’re eligible for this program by completing and submitting your FAFSA.