Dropping Out of School With a Pell Grant
While federal Pell Grants generally do not have to be repaid, students who drop out of school may be responsible for returning at least a portion of the funds acquired. Whether or not you will be asked to repay your Pell Grant depends on when you withdrew and how many classes you dropped.
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Calculating the Amount of Grant Earned
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The Department of Education's formula for calculating how much, if any, of your grant you owe is complicated. According to college information website FastWeb, the federal government sees students as "earning" their grants by attending classes. Thus, they must pay back half of the money that was given to them for classes they did not attend. For example, if you get a Pell Grant for $1,000 and drop out halfway through the semester, you have earned half of your Pell Grant, $500. You will be expected to pay back half of the part of the grant that you did not earn -- $250.
Reduced Disbursement
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According to Borough of Manhattan Community College, if you drop out of only some of your classes, your Pell Grant may be recalculated. Pell Grants are calculated based on the number of classes that you are taking, so dropping a class without picking up another may mean a smaller Pell Grant. For this reason, the amount of your financial aid disbursement will generally be lower than what was previously figured if you drop a class before your aid is awarded. If your aid has already been awarded when you drop some of your classes, you must return the amount disbursed for those classes to the university.
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Consequences
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If you do not pay back the Pell Grant money that you owe, you could face consequences if you decide to go back to school. If your record shows that you did not pay the part of the Pell Grant that was owed, you could be unreliable for for repaying future federal aid.
Controversy
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According to Fast Web, some people find the idea of grant repayment unfair. They feel that the regulation will only hurt poor students, who often have to drop out of school for personal financial reasons. In addition, they think the regulation will keep these students from going back to school when they are better able to take on the responsibility. On the other hand, the federal government argues that the money disbursed is to be used for classes, and if students do not use it for its intended purpose, they should pay it back.
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References
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