What Is A Pell Grant?

Written by Michael Bennet

The Pell Grant is a federal educational grant that is designed to benefit undergraduate students that demonstrate a high financial need for aid to attend college.

Although some graduate programs do qualify for Pell Grant aid, it is mostly given to students who are pursuing their first bachelor’s degree, and because it is a grant, the money you receive never has to be paid back under normal circumstances.

It is provided on an annual basis, and you can therefore become eligible for a Pell Grant during during each year you are attending college provided that you can satisfy the appropriate requirements.


The Pell Grant was originally introduced in 1972 as an amendment to the Higher Education Act. It was first called the Basic Educational Opportunity Grant, until it was renamed in 1980 after the Rhode Island Senator Claiborne Pell.

Throughout the years it has grown significantly both in terms of overall funding, and disbursement aid via numerous amendments, although many critics argue that it has not kept up with inflation, and therefore has not been able to succeed with its original mission statement of providing students with aid that would allow them to attend college when otherwise they would not be able to.

EFC, Pell Grant Requirements, and Award Amounts

The majority of Pell Grants are provided to students that exhibit a very high financial need for aid, and the way this is primarily evaluated by the Department of Education is via the EFC metric. EFC, or expected family contribution is an indicator of a student’s financial need for federal student aid, and is used not only to evaluate a student’s need for the Pell Grant, but for other kinds of federal aid as well, such as need-based federal student loans.

Each year a maximum cutoff threshold is established with regard to EFC, and any student that has a higher EFC value than this amount will not be able to qualify for a Pell Grant for that particular academic year. It is currently set at 5,081 for the 2013-2014 award year.

Other Pell Grant eligibility requirements also must be met besides just having the appropriate EFC. The two that are specific to the federal Pell Grant award include the requirement of being enrolled in an eligible undergraduate degree program, or qualified postbaccalaureate degree program, while the other involves being able to demonstrate that you are not currently incarcerated in a federal, or state penal institution.

The other Pell Grant requirements that you must satisfy in order to get this award are for the most part all very similar to the ones that you must fulfill in order to get any type of federal student aid.

Once you are able to qualify for a Pell Grant, the amount of aid you are able to receive for that particular award year will be determined by your school’s financial aid department, and will be closely related to your level of need, the cost of attendance of going to your particular college, and the number of credits you are taking on a semester basis for that school year.

The maximum Pell Grant amount for the 2013-2014 school year is now set at 5,645 dollars, with the minimum amount set at 582 dollars for students attending class on a full-time basis.

Most students that gain a positive Pell Grant eligibility status do not receive the full amount though, and on average most students receive about half of the maximum amount that is available for that award year.

To give you a rough idea of the kind of income levels that warrant disbursement of Pell Grant aid, most awards are given to students that come from families that make less than 23,000 dollars per year, while very few awards are given to students that come from families that make above 60,000 dollars per year.

Applying for a Pell Grant

The application that you must fill out in order to apply for a Pell Grant is the FAFSA. The FAFSA, or Free Application for Federal Student Aid, is the government’s universal application for federal student aid, and by completing one by the appropriate deadlines you will be putting yourself into contention for Pell Grant aid.

This doesn’t necessarily mean that you’ll be able to qualify, and you should have a good idea of your eligibility status by viewing your SAR, or Student Aid Report, as this is a document that is generated upon completion of your FAFSA that will tell you both your EFC, and your eligibility status for the Pell Grant.

Pell Grant Future

The Pell Grant has recently been amended via the Student Aid and Fiscal Responsibility Act that was recently signed into law on March 30, 2010 by President Obama. SAFRA, as it is commonly referred to, has increased the maximum Pell Grant amount for the 2010-11 award year to 5,550 dollars, and it plans on increasing this amount in accordance with the price of inflation beginning in 2013.

Despite the increase in funding brought about by the SAFRA legislation, the Pell Grant program faced a significant shortfall in the Spring of 2011. This brought about a congressional vote that reduced funding by over five billion dollars, along with eliminating a student’s ability to get more than one Pell Grant award per year.

That being said, the maximum Pell Grant amount is still set at 5,645 dollars, although the minimum available amount for full time students was reduced to 555 dollars. The EFC cutoff threshold is now set at 5,081, and to become eligible the various other Pell Grant specific, and general federal student aid requirements must still be met.