The Critical Federal Pell Grant Eligibility Criteria

Written by Michael Bennet

The federal Pell Grant eligibility criteria for the 2012-13 school year have been modified slightly due to the enactment of the Student Aid and Fiscal Responsibility Act, or SAFRA.

This bill was included as part of the Health Care and Education Reconciliation Act of 2010, and was signed into law on March 30, 2010 by President Obama. SAFRA has brought with it a major retooling of the Federal Family Education Loan Program, as well as a number of significant amendments to the Pell Grant program.

More specifically, these changes to the Pell Grant have to do with its available funding, its existing award amounts, and its overall reach. In terms of available funding, SAFRA has plans to inject tens of billions of additional dollars into the Pell Grant program over the next ten years or so.

Some of this money will be appropriated towards increasing the Pell Grant award amounts, and starting in 2013 the maximum available Pell Grant amount will rise in accordance with the price of inflation. The reach of the Pell Grant has also expanded with the inception of SAFRA, and now hundreds of thousands of more students can become eligible provided that they satisfy the new federal Pell Grant eligibility criteria.

Examining the New Federal Pell Grant Eligibility Criteria for 2012-13

So what is the new Pell Grant eligibility criteria, and how does it effect students? Most of the eligibility requirements have stayed roughly the same, and the award is still based primarily on financial need, although the maximum cutoff EFC threshold has been increased.

  • Old EFC maximum cutoff threshold:         4,617
  • New EFC maximum cutoff threshold:       4,995
  • Difference:                                                          378

This has essentially made the award available to more students who may have been treading the line during previous years in terms of EFC, and has ultimately “loosened” the financial need requirement by a few percentage points. Remember that the maximum EFC threshold is the maximum expected family contribution you can have if you want to be able to qualify for a Pell Grant, and the closer your EFC is to zero, the better your chances are at receiving the full amount for that particular award year.

Summarizing what effect this new change to the maximum EFC cutoff threshold will have on students, we can make several generalizations in regard to both EFC, and CoA (cost of attendance).

  • No major changes for students with an EFC below the previous threshold of 4,617, and a CoA that is above 5,500.
  • Students with an EFC between 4,618 and 5,273, and a CoA that is above 5,500 will now be able to receive a Pell Grant.
  • Students with an EFC between 4,618 and 5,273, and a CoA that is between 4,900, and 5,549 will now be able to receive a Pell Grant.
  • Students with an EFC that is lower than 4,618, and a CoA that is below 5,500 may now actually receive lower award amounts.

While it is clear that the changes to the EFC threshold stands to benefit many students, it is also going to have a detrimental effect on some students. While these lower award amounts may not be drastic, they are going to be significant, and it is important to take into consideration both your EFC, and CoA to see if you fall into that last category.

If you do, there is a chance that your award amount may be a few hundred dollars lower than what you originally thought it would be. There is really nothing you can do on your end to change this modification, and it is best just to understand that this may be a possibility before you get your award package from your college in order to prevent a misinterpretation.

Not Included In The Final SAFRA Bill

Other modifications to the Pell Grant eligibility criteria that were included in the original SAFRA bill but were not passed into law had to do with the asset requirement that had an effect on EFC, and what the significance of certain types of drug convictions had on eligibility for federal student aid. The change to the asset requirement was going to eliminate its effect on EFC, while capping federal aid to students that came from families that had less than 150,000 dollars in assets.

SAFRA originally was going to eliminate the drug conviction requirement all together, but because this part of the Bill wasn’t included in the final ratified version, it still exists as a requirement for federal student aid. The asset requirements stand as they were previously instituted as well, as neither of these changes were ever put into law.

Other SAFRA Changes

SAFRA has also increased the maximum Pell Grant for 2012-13 to 4,995 dollars, and plans to increase this amount by the Consumer Price Index plus one percent beginning in 2013.

This doesn’t necessarily mean that you’ll be able to get a higher award amount, and while these changes were implemented to combat the price of inflation, many critics argue that they simply don’t do enough to maintain the Pell Grant’s original mission of providing aid to students that couldn’t afford to attend college otherwise.

Static Eligibility Requirements for the Pell Grant

The other federal Pell Grant eligibility criteria have essentially remained the same, and it is still about your ability to demonstrate the appropriate financial need via your EFC, and to a lesser degree, your CoA, if you want to qualify for a Pell Grant.

  • Financial Need = Cost of Attendance (CoA) – Expected Family Contribution (EFC)

The higher your financial need is, the better your chances are at becoming eligible for a Pell Grant, and qualifying for the full award amount. Remember that there are still other eligibility requirements for the Pell Grant, and these include Pell Grant specific, and general federal student aid requirements.

These have all remained fully intact post-SAFRA, and you therefore still need to satisfy these Pell Grant requirements in order to become eligible for the Pell Grant in 2012-13.