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What Is a Pell Grant? | Are You Eligible?

5 two students learningThe US government has a lot of interest in the education of young adults.

It has many loans and grants to ensure the deserving students get the education of their choice.

The aim is to not let any deserving individual go uneducated due to financial difficulties.

What Is The Pell Grant?

The Pell Grant is one such grant awarded by the US government to the deserving students.

It is a financial aid provided for those students who are yet to even get a bachelor’s degree.

Sometimes students who are enrolled in certain post baccalaureate programs are also given this grant. This is to encourage secondary education.

The Higher Education Act of 1965 created the Pell Grant. This grant is reserved for those students who are in dire need of a financial aid. It is not for those who can afford a federal loan or any other educational loans.

These grants are the foundation for the financial aid of the student. A student can add on more aids or loans to the Pell grant. The grant is administered by the US Department of Education.

How Is It Different From A Federal Loan?

Federal loans are loans provided by the government. The rates of interests are lower than the private educational loans’. Though the Pell grant is also provided by the US government, it need not be repaid like the federal loans. This is a financial aid given to the student for financial support due to his weak financial background.

How Is The Eligibility Determined?

The Pell grant is reserved only for the most deserving. The government has its own ways and means to determine if a student is eligible. Some of the Pell grant requirements for determining the eligibility are:

  • The income of the student
  • The income and assets of the student if he is independent
  • If the student is dependent – the income and assets of the parents
  • The student’s family’s household size
  • The number of family members attending post secondary institutions
  • The student’s Effective Family Contribution (EFC)

What Makes You Ineligible?

Not everyone can qualify for the Pell grant. You are ineligible for the grant if:

  • You are a male who has not registered with the selective service
  • You owe a refund on a Title IV grant
  • You have defaulted a Title IV loan
  • You are currently in jail
  • You are subject to an involuntary civil commitment once the incarceration period is complete.
  • You have a bachelor’s degree and are not applying for one of the qualified post baccalaureate degrees.
  • You are not a US citizen

What Is The Formula To Determine EFC?

The US department of education uses a fixed formula to determine the EFC of a student. It is based on this calculation, the amount for the grant is determined, if the student is eligible. The formula is:

EFC = (Net income excluding basic living expenses and taxes + Net assets after reducing an asset protection allowance)

The rates and allowances used in the above formula vary from student to student. It depends on the status of the student i.e. if he is dependent or independent and the level of dependence or independence (whether he lives with his parents or not).

How Is The Grant Amount Determined?

The grant amount varies for every student. It depends on three basic criteria –

  • The EFC amount
  • Is the student attending college or university?
  • Is the course full time or part time?
  • Duration of enrolment in an academic year

5 the graduation dayThough many students apply for the Pell grant every year, only the most deserving ones are awarded the grant. The Pell grant income limit for a student’s family is $25,000 annually. This is the total annual income of the entire household put together.

Since private educational loans average at around $28,000, the income limit for the grant is set at $25,000. If the student’s family income crosses this amount, he will not be eligible for the Pell grant.

The maximum amount that can be awarded under the Pell grant for the academic year 2015-16 is fixed at $5,730. The award limit for the academic year 2016-17 (July 1, 2016 – June 30, 2017) is $5,815. Every student gets a different amount and the maximum limit for the grant changes every year.

How To Apply For A Pell Grant?

Applying for a Pell grant is not a simple task since the student has o furnish all the financial details of his entire household. Here are the steps to follow when applying for the grant.

Form Filling – The application form is free and can be easily downloaded from the Pell grant’s website.  The students have to fill in all details accurately and submit it online or via Email.

Deadline – The earlier the student applies, the better, as the funds are limited and the number of applicants is huge. However, the deadline for submitting the fully filled in grant application form is in April every year.

Await Student Report – Once the application form is submitted, the education department assess the financial situation. After calculating the EFC, the student will be sent a Student Aid Report. This report will take anywhere between 1 – 2 weeks, hence the student needn’t panic.

This report will provide details such as the student’s EFC and other federal student aid programmes for which the student is eligible. If the student is eligible for the grant, the report will contain the reward amount too.

Respond ASAP – Once the student report is received, the student has to respond within the given deadline. If he fails to respond, he may lose the Pell grant for that year.

Receive Award – The amount of the grant will be directly paid to the institution. If there is any amount remaining after paying the tuition costs, the school’s financial aid department will hand it over to the student.

What Is The Lifetime Limit For Pell Grants?

One cannot receive financial aid forever even if their financial situation is very poor. Like every other aid, the Pell grant has a lifetime limit too. As of July 1, 2012, one can receive the benefits of the Pell grant only for 12 semesters or an equivalent period.

The equivalent period for 12 semesters is approximately 6 years. The US department of education will send you a notice when you are close to the limit of the grant.

Since the student is eligible for a 100% award every year, the total award percentage is 600% for 6 years (12 semesters). The duration of the course attended also plays a major role in determining the amount and lifetime of the grant.

When a student attends the entire course, he is a full time student. Similarly if the student attends only a few classes or only one semester in a year, they are part time students.

What Is Lifetime Eligibility Used?

Lifetime Eligibility Used (LEU) is the percentage of the Pell grant that you have used in the given 6 years. Each year you are eligible for a 100% grant. Sometimes, student can receive more than 100% when they get 2 scheduled awards in the same year. However, when the student is not enrolled the entire academic year, he will not receive the full 100% of the grant amount for that year.

You will be eligible to receive the award amount for the full 6 years or until you reach the 600% limit. Once you exceed the 600% limit, you will not receive any more award amount. If at the end of a year, the used up award percentage is 500%, you will be eligible to receive the grant the next year, but will not receive it for the full year if it crosses 600%.

One can keep track of their LEU by logging on to the National Student Loan Data System. You can log in with your FSA ID and find the details on the financial aid review page.

What Happens When You Discontinue Your Course?

All students who receive the Pell grant are expected to finish their entire course. The main purpose of the grant is to cover their educational costs and encourage them to get a quality education. When a student decided to drop out of the course, the Pell grant will also be discontinued.

Withdrawal from the course can be either official or unofficial. Official withdrawal is where the student submits an official withdrawal form. The forms can be obtained from the dean of the college and can be submitted to the university registrar’s office.

When the student withdraws without any official notice, he is considered to be “walking away” and will lose all the grants. He cannot get any part of the amount for the future semesters. The student will be eligible to repay all the funds received.

If a student is officially withdrawing, adjustments will be made to his grant amount. Some portion of the grant amount may be due to the student and will receive a tuition adjustment. If the student withdraws during the course of a semester, the amount is calculated based on the number of days the student attended classes in that semester.

The student may be given the remaining amount for that semester and the rest will be returned to the government, by the institution.

What Happens After Withdrawal?

Once the student withdraws from the course, he is given a grace period. If the student re-enrolls in the course within that grace period, a new grace period will be given. However, if you do not enrol within the grace period, all funds will be stopped and you won’t receive any financial aid.

Once the withdrawal is confirmed, the student will have to go through an exit interview. If you do not complete this interview your certificates and transcripts will be held back.

Also, your future student loans may be jeopardised. Not only will the government and other lenders take note of you not completing the course, you may also fall short on credits. When you do not have enough academic credits, you will not qualify for any educational loan, private or federal. These credit limits vary from lender to lender.

Federal Pell Grant In A Glance

Grant Provided By The government of USA
Awarded To ·         Undergraduate students with high financial need

·         Students who are yet to earn a degree

·         Certain post baccalaureate students to promote secondary education (like teacher certification programme)

 

No Of Participating Institutions 5,400
No Of Institutions This Grant Can Be Used In Only One
Maximum Grant Amount For 2016-17 $5, 815
Lifetime Of The Grant 12 Semesters or Equivalent (6 years)
If Qualified Full Amount Will Be Paid
Amount Affected By Other Loans Nil

When You Don’t Qualify For A Pell Grant?

So, you applied for a Pell grant and didn’t get it? All is not lost. The Pell grant qualifications can be difficult to meet and not everyone can meet them. There are a number of other options. Though the other options can be more tricky and expensive than the grant, they are still ways to get you your education.

Some of the other options for a student are:

Scholarships – These are free money and a number of scholarships are available for grabs.

Federal Loan – This is a financial aid given by the government. These federal loans require to be repaid in full with interest. However, they are less expensive and more flexible than a private educational loan.

Private Loans – There are a number banks and lenders ready to offer private educational loans to help the students. These loans come at a high interest rate and a number of restrictions. They are not flexible and will end up as a financial burden if you don’t make your payments on time.

Though getting these loans and repaying them can be quite challenging and very stressful, they are options nevertheless. Having the right education can take you places and you can achieve your dreams. If loans are your only option, it is always better to take them instead of sacrificing your education.

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