The federal Pell Grant helps more than nine million students afford college each year. While the award will help with your college expenses, it may not cover all of your tuition expenses. There are federal restrictions placed on how much you can receive each semester, as well as how many years you can claim your federal Pell Grant before it runs out.
The U.S. Department of Education distributes the Pell Grant by semesters. If you received your first Pell Grant on or after July 1, 2008, you can only claim the Pell Grant nine times for a total of 18 semesters. If you claimed your first Pell Grant prior to that date, however, you are not subject to any limits or restrictions, and your award will not run out. If you wish to participate in an accelerated degree program, you may be eligible to receive two full Pell Grants in one school year. All students, regardless of the date they receive their first Pell Grant, lose eligibility for further Pell Grants once they complete and receive a bachelor's degree.
The U.S. Department of Education will distribute your Pell Grant directly to your school's financial aid department, unless your tuition is already paid. Your school will apply the money to your account, and refund any remaining funds to you during the school year. Each college and university must distribute Pell Grant refunds at least once per semester by check or electronic funds transfer. The school also must notify its students of when and where they can pick up their Pell Grant refund checks.
Pell Grant award amounts vary yearly. Students qualify for Pell Grants based on their household income, household size and overall financial need. Each year, the congressional budget sets aside money to fund the federal Pell Grant program, the amount of which determines the maximum amount of aid available to students for the following school year. For example, the maximum award available for both 2010-2011 and 2011-2012 is $5,550 for the year. Though you may not qualify for the full award amount, you may receive a partial award to apply toward your college tuition. If the amount you receive doesn't cover all of your college expenses, you may have to look for additional financial aid in the form of scholarships, grants and student loans.
If your Pell Grant award runs out during the semester, leaving you with a tuition balance and no way to pay, you may be able to avoid student loans by taking advantage of one of the federal tax credits available to college students. The Hope Credit is worth up to $1,800 and is available to undergraduate students enrolled at least part-time in their first two years of college education. It is partially refundable on your federal income tax, up to 40 percent of its total value. The Lifetime Learning Credit, on the other hand, is worth up to $2,000. It is available without enrollment restrictions, but is non-refundable on your income tax. You may not claim both credits in one year.