Editor's Note: On January 31, 2014, the U.S. Department of Education announced the maximum Pell Grant Award for the 2014-15 financial aid award year will be $5,730. Click here to read Barbara Thompson's latest Pell Grant update.
The maximum amount college students can receive under a Federal Pell Grant for the 2013-14 financial aid award year is $5,645, an increase of $95 from the maximum amount for the 2012-13 award year.
The new maximum was announced January 30 by the U.S. Department of Education, which manages the Pell Grant program — the nation's largest source of need-based college grants — money that students do not have to pay back. According to a government tally, more than $33.5 billion in Pell Grants were awarded to 9,714,722 students during the 2011-12 academic year; the average amount was $3,451.
A number of factors determine a student's eligibility for a Federal Pell Grant and the amount awarded, including:
- Financial need, which is determined according to a federal formula that is based upon the information supplied via the FAFSA — the Free Application for Federal Student Aid.
- The cost of attendance. Not every school can award the full $5,645 amount, even to students who are eligible to receive a "maximum" Pell Grant award.
- Enrollment status. Pell Grants are available to students who are going to college on a full-time, half-time, or less-than-half-time basis.
- How many terms or semesters in which the student is enrolled during the financial aid award year.
What's more, to be eligible for a Pell Grant, you must be enrolled in a college program that leads to an associate degree, bachelor's degree, or a certificate, and the school must be "Title IV-eligible." Pell Grants are not available to fund graduate degrees (for example: an MBA, a law school degree, or a doctorate). Most of the nation's colleges, universities and vocational schools are eligible to participate in the federal government's financial aid programs, including Pell Grants and low-cost federal loans, but you should be aware that not every school can or does. If you need federal financial aid to pay for college, make sure you set your sights on a Title IV-eligible school.
Again, to get a Federal Pell Grant, you have to submit the FAFSA. If you are eligible to receive a Pell award, your school will take into account your enrollment status and determine just how much you will receive. In addition, the federal government sends your Pell Grant money directly to your school, which can then disburse funds to you. As a general rule, Pell Grants are typically applied against your tuition and fees and other expenses charged to your school account. That means you may receive little, if any, cash directly from your Pell Grant.
Keep in mind that Pell Grants are just one source of financial aid. Completing the FAFSA also enables you to be considered for other federal grant programs and federal student loans, including very-low-rate Perkins and Subsidized Stafford loans, and Unsubsidized Stafford loans.
CollegeUp.org offers a guide to financial aid programs, including Pell Grants, as well as practical tips that will help you get that FAFSA completed sooner rather than later. You can apply for a Federal Pell Grant at any time, but the FAFSA also is used to determine your eligibility for grants provided by states and by many institutions, and most states and schools do impose strict application deadlines. Click here for details on state grant programs and their deadlines.
Barbara Thompson is Manager of USA Funds University.
Updated January 31,2014.