Income Qualifications for Pell Grants
To apply for a federal Pell Grant, a student should fill out the Free Application for Federal Student Aid form, also known as the FAFSA. The FAFSA will allow a student and his parents to enter their incomes to determine the eligibility of the student applying for a federal Pell Grant. If a student's expected family contribution is high, according to financial aid officials, a student cannot qualify for a Pell Grant, but may be eligible for federal and private student loans.
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History of the Federal Pell Grant
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The Pell Grant is sponsored by the U.S. Department of Education and is named after U.S. Sen. Claiborne Pell. Eligibility requirements are dictated by the Higher Education Act of 1965. The grant was originally named the Basic Educational Opportunity Grant.
Income Requirements
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The Pell Grant is a need-based grant that is available to students in low-income families. A low-income family or student has $35,000 or less in annual income. A student whose family income is $80,000 or more generally does not qualify for a Pell Grant. To verify a student's or parent’s income, the student’s school can require a verification form to be filled out, showing proof of income, such as a copy of the student's or parent’s income tax return.
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Income Adjustments and Considerations
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With the Pell Grant, income is based on more than annual earnings of the student and the student’s parents or, if applicable, spouse. The amount of money in the student’s savings and checking accounts is taken into consideration, as well as the amount of income tax paid or value of investments. Another consideration is the number of family members in the student's household who are in college.
Amount of Pell Grant
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The income of a student, along with her enrollment status, such as full- or part-time, determines the amount of the Pell Grant she will be awarded. The maximum Pell Grant award for the 2010-11 award year (July 1, 2010 to June 30, 2011) is $5,550; the amount increases each year. There are no limits to how many times a student can receive a Pell Grant, as long as the student remains in undergraduate status. If the student’s income increases over the years, the Pell Grant amount will decrease; if a student’s income decreases, the Pell Grant amount she can receive will increase.
Income Misconceptions
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It is a misconception that students with family incomes totaling $50,000 are not eligible for a Pell Grant. An independent or dependent student whose family income totals $50,000 is eligible to receive a Pell Grant. However, the larger the income, the less a person receives because the Pell Grant is awarded on the basis of need.
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