About Federal Pell Grants

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By Anne Minard
eHow Contributing Writer

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For students with limited financial resources who are hoping to pursue a college education, the Federal Pell Grant Program offers one solution, at least a partial one. The program doesn't rely on a student's scholastic merit, but on need. Factors that determine the amount of the award include the price of the school and the family's (or the independent student's) finances. Usually, Pell Grants go to students whose family annual income is less than $20,000, but the grants may be awarded to students whose families make up to $55,000 a year.

History of

The Federal Pell Grant Program was initiated in a reauthorization of the Higher Education Act of 1965, created on the watch of President Lyndon B. Johnson. Originally known as the Basic Educational Opportunity Grant Program, it was fitting that a president who had once worked his own way through college in Texas would start such a program. The Pell Grant Program was added to the program in 1973, after the end of the Johnson presidency. U.S. Senator Claiborne Pell wrote the legislation to help students based on financial need, and that remains the spirit of the program today.

The Facts

Pell Grants are available for low-income students pursuing their first undergraduate degrees, and in some cases for students returning to earn a teaching certificate. The program is available through most United States colleges and universities. The application process is free, and awards range from a few hundred to several thousand dollars, which may be used for tuition, books and school supplies. Schools distribute the money at least twice a year and it may be applied directly to tuition or other expenses, or distributed to the student in the form of a check.

Size

The Federal Pell Grant Program has been funded for at least $12.3 billion each fiscal year since 2005. In the 2006-2007 fiscal year, the average award amount was roughly $2,500 per grantee, with the range between $400 and $4,310. In the 2008-2009 fiscal year, the grants have ranged from $523 to $4,731.

Benefits

Unlike student loans, Pell Grants do not have to be repaid. They are frequently used as a baseline for financial aid and students may apply for loans to add to Pell Grants. The loans will then become payable over time, after graduation.

Time Frame

Applications for the Federal Pell Grant Program are usually due by late June of the summer prior to the start of the semester during which the student hopes to use the aid. This date may change slightly from year to year, so applicants should refer to the "Application Process" link in the Resources section below. Sometime after completing an application, called a Free Application for Federal Student Aid (FAFSA), the student will be notified of eligibility for the program. The school may distribute the aid up to 10 days before the start of the term in which it will be used.