The Federal Pell Grant and Applying for Student Loans

Written by Michael Bennet

Perhaps one of the most common questions students have about the Pell Grant program is how it can be successfully utilized along with various types of student loans.

The good news is that it can of course be used in conjunction with other types of student loans, and when used in combination with federal education loan funding, it is not out of the realm of possibility for students to have most of their college expenses paid for via federal student aid.

There are still of course private student loans, which should always be applied for after federal student aid. These kinds of student loans can pay for whatever costs that are leftover once the Pell Grant, and other federal aid has been exhausted.

Typically the Pell Grant and student loans work in concert to provide students with a very high financial need with the money they need to pay for college, and there are several key things that you must keep in mind if you are wondering how you should go about applying for the Pell Grant and student loan aid.

The Process of Getting the Pell Grant and Student Loans

The following items will give you a rough idea of how you should go about applying for both the Pell Grant and various student loans, and while this timeline shouldn’t be looked at from an absolute perspective, it does typically hold true for most undergraduate students who need to get some level of aid to pay for school and attend college.

  • The first thing that you must realize is that the Pell Grant and federal student loans are based primarily on financial need, and will therefore pay special attention to your EFC, and dependency status. To apply the FAFSA must be submitted by June 30, although it is recommended that you go ahead and do so as quickly as possible after January 1, as most federal aid is allotted on a first-come, first-serve basis.
  • After you have submitted your FAFSA a Student Aid Report, or SAR will be generated. Within this report will be a detailing of your eligibility status for both the Pell Grant and various federal student loans, along with your specific EFC for that academic year.
  • An award letter from your school will be sent to you a few months after you have received your SAR. Within this notification should be a detailing of all the federal student aid that you should expect to receive for the upcoming school year, including the Pell Grant. You must then send back an acceptance letter to your college in order to accept or deny each award before the actual school year begins.
  • Once you have sent in your acceptance letter to your school the application process for federal student aid is pretty much complete. You should now have a firm idea of the amount of federal aid you will be receiving for the upcoming academic year, and it should now become clear how much additional aid you are going to need in order to pay for school.
  • Now is the time that you may want to think about applying for private student loan funding, as this kind of aid can easily bridge the gap between what you get via federal assistance, and what you need in total to pay for school. Remember that these loans will not affect your cost of attendance, expected family contribution, or financial need, and will therefore not affect your Pell Grant eligibility for that particular academic year.
  • Private student loans are made by private independent lenders and not the Department of Education. They are based off of credit, and not off of financial need or merit, and must be applied for via a separate application, and not the FAFSA. You can expect to pay an arm and leg for a private student loan with the amount of finance charges that some of these lenders tack on, and overall you can expect a stricter repayment term with less benefits.

The bottom line is that you can receive the Pell Grant in combination with both federal, and private student loans for any school year, with both the Pell Grant and federal education loan funding being fairly similar in many respects.

The key thing to keep in mind is when to apply for each type of aid, as it is always best to know where you stand in terms of federal assistance before you resort to applying for private student loans. The one type of financial aid that may affect your Pell Grant eligibility are certain kinds of scholarships, as these CAN impact your level of financial need, and need to be looked at on a case-by-case basis if you were able to qualify for a Pell Grant.