What Amount of Income Qualifies You for a Pell Grant?
The U.S. Department of Education awards Pell grants to college students based on financial need. Colleges and universities do not use income as the only factor to determine whether you qualify for a federal Pell grant. Other consideration factors include expected family contribution (EFC), assets and household size.
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Net Income and Assets
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The U.S. Department of Education typically awards Pell grants to low-income students. The Higher Education Act refers to low-income students as those whose income is 150 percent of the current federal poverty level. The Department of Education uses your net income and assets when determining your total income level when qualifying you for a Pell grant.
Net income is the amount of income remaining after taking out taxes and living expenses. Assets include but are not limited to checking, savings and investment accounts; investment properties; family-owned businesses; partnerships and corporations. The U.S. Department of Education does not include the primary family home as a part of assets in EFC calculations.
Expected Family Contribution
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Your EFC is one of the most important factors when determining Pell grant eligibility. An EFC is the amount of money the U.S. Department of Education can reasonably expect you or your family to contribute toward your college education. Your EFC is a percentage of your net income and assets or both your and your parent's income and assets, depending on whether your student status is independent or dependent. Generally speaking and because the Pell grant is a need-based program, the higher the EFC amount the lower the Pell grant award.
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EFC For Independent Students
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The U.S. Department of Education considers you an independent student if on the day you fill out your Free Application for Federal Student Aid (FAFSA) any one of these conditions applies: you are at least 24 years old, married, have dependents, are on active duty in the U.S. military, an emancipated minor, a runaway, homeless, a veteran of the U.S. military or are enrolling in a master's or doctoral degree program. For independent students the Department of Education uses only your net income, assets, household size and number of people in your household currently in college.
EFC For Dependent Students
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If you do not fall into one of the independent student status categories, the U.S. Department of Education considers you a dependent student for Pell grant and financial aid purposes. This rule applies even if you are 23 and have not lived in your parents' home since you were 18. For dependent students, the U.S. Department of Education uses both your and your parents' income and assets, household size and number of people in the household currently in college when determining your eligibility for a Pell grant.
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