Pell Grants: 5 Benefits and 7 Eligibility Requirements

Pell Grants

What are Pell Grants?

Pell grants are the most widely known and readily available federal college grants for undergraduates.

Virtually every undergrad college student under a certain personal or family income level has applied for and received Pell grants at one time or another in their collegiate experience, and in many cases do so each academic year.

They have helped countless students to afford college and continue to do so, becoming even more necessary in these economically troubled times.

The overall amount of tuition that these grants cover has gone down over time, but at least they are still available and are not likely to vanish any time soon.

This article will take a closer look at the specifics of Pell grants.

The History of Pell Grants

The Pell grant traces its origins to a piece of legislation called the Higher Education Act of 1965. This legislation was part of then President Lyndon Johnson’s Great Society policies, and was aimed at fostering the educational vitality and promise of the nation.

The act not only established the Pell program but also various scholarships, educational loan programs, and other educational policies and bodies.

Originally called the Basic Education Opportunity Grant program, the Pell grant got its name from Claiborne Pell, a democratic US senator from Rhode Island.

Pell was mainly responsible for the creation of the grant, which interestingly enough was originally intended for incarcerated criminals as well as low income college students.

Pell realized that prison education reduced rates of recidivism significantly.

Sadly, this provision of the Pell legislation was later dropped, even though there was enough funding to allow for its continuance.

The amount of Pell awards has been increasing over the years. In 2010-11 the maximum grant will be $5,550 as compared with $4,050 in 2006-7.

However tuitions are also climbing markedly and in fact the Pell now covers a dramatically lower percentage of tuitions than in the past.

On average, 30% of the tuition amount is now covered by Pell, while in 1990 it was around 60%. That is quite a fall for a 20 year period.

Though billions of dollars each year are set aside by the US Department of Education for these grants, it is sobering to see that larger and larger loans are becoming necessary in addition to Pell and other grants for assistance with college costs for families below middle and upper income brackets.

7 Eligibility Requirements of Pell Grants

There are a number of basic eligibility requirements for Pell grants. They are as follows:

1. Proof of financial need

The applicant must prove that, with the help of his or her family or on her own, it would be difficult to meet tuition costs.

The education department refers to their assessment of this ability to meet educational costs as Expected Family Contribution (EFC).

Generally what this boils down to is that students or families making less than $20,000 a year are eligible. Awards are sometimes given to applicants with higher incomes, but the majority goes to applicants with incomes in this range.

2. High School diploma or GED

Applicants must have either a high school diploma or a have passed the General Education Diploma (GED) exam. There may be other equivalent exams or home school programs that are acceptable, but they must qualify as being equivalent to completion of a high school education.

3. US Citizenship and a valid Social Security number

The applicant must have both.

4. Degree program

The applicant must be enrolled in a degree program, not merely taking classes in a non-matriculated format. The financial assistance provided by a grant is aimed at helping students to earn a degree and move on in their college careers.

5. Academic Performance

The student must have at least a C average to be eligible for aid after their first year at the college.

6. Selective Service Registration

All male applicants must register for selective service if they are between the ages of 18 and 25.

7. FAFSA form

Applicants must fill out a Federal Application for Student Aid (FAFSA) form and certify on it (in addition to the other personal and income information) that the Pell funds will be used for educational purposes only, and that they do not owe repayment of any grant and are not in default on any educational loan.

Details on obtaining and submitting the form can be found here.

How to apply for a Pell Grant

As noted above, students applying for a Pell grant must fill out a Federal Application for Student Aid (FAFSA) form.

The FAFSA form is easily accessible online. The entire form can be filled out and submitted there. This is generally faster and easier than submitting the form by mail.

Paper forms can be found at a variety of locations, the most obvious being the college financial aid offices. Libraries and legal offices may also carry them.

The FAFSA form asks for information about the financial status of the student and his or her family, as well as about the educational programs they are considering.

As mentioned above, the Expected Family Contribution amount is arrived at by the Department of Education by information given on the form.

More details on the FAFSA including where to find it online, can be found here!

5 Significant Benefits of Pell Grants

The Pell grant is one of the more generous and flexible college grants, which is why many people like it. The following are some of its good points.

1. Pell has substantial award amounts

While not huge, Pell gives as much or more aid as most other undergraduate federal grants available. Its upper limit is currently 5,500 per year.

As noted above, this doesn’t cover much of today’s college tuitions, which may be as much $25,000 – $30,000 per year for private post secondary institutions (obviously less for public ones).

However, the Pell amount has increased somewhat in an attempt to keep pace.

2. Pell can be awarded for up to 4 semesters per Academic year

Also noted above. There are some restrictions to this, but generally it is desirable because it allows students to take advantage of it to speed up their educational process.

3. Pell is retroactive

Pell can be and often is used retroactively to refund tuition already paid.

That is to say, if a student elects to take more courses than when they applied, the Pell grant amount will be changed to reflect this and the extra tuition amount will be paid (refunded) at a later time.

Additional Pell money can even be awarded for a class a student takes a second time.

4. Pell changes to reflect changes in a student’s financial status

If a student experiences marked changes in financial status, the Pell grant amount can be adjusted in accordance with these changes after the student has already been awarded their initial amount.

5. Pell offers advances

Pell awards for the fall semester are paid in October, and those awarded for spring are paid in March. Therefore, advances on the grant are offered to help students pay for initial expenses like books and school supplies in September. The usual advance amount is $500.

Criticisms of the Pell Program

Though it has been praised over the years as being a helpful and egalitarian grant program, some controversy and criticism has arisen regarding the allocation of Pell funds.

20% of these funds annually go to a relatively small group of colleges that comprise only 6% of all the college students eligible.

A few of the notable names in this group are the University of Phoenix (which in fact is at the top of the list), and Kaplan college.

Given that these are both career based institutions that have extensive online programs and seek to graduate students quickly, a suspicious pattern begins to emerge.

These might be considered colleges that are corporate rather than strictly academic in terms of their ownership, management style, and prerogatives.

Thus, in the same trend that we are seeing today in other areas of the private sector and its relationship with the federal government, it seems that these corporate style institutions are lobbying for greater funding and receiving it, possibly in response to campaign contributions and other such corporate style financial favors.

Since these colleges have a reputation as quick tracks aimed mainly at giving students a fast start in the business world, they have a higher dropout rate than more traditional institutions.

Should these colleges be getting close to a quarter of all the Pell money allocated each year?

Shouldn’t this money be going to the most academically high level institutions as well perhaps institutions with the highest percentage of low income students?

A system based on corporate lobbying that is primarily based on financial rewards does not seem appropriate for a grant program aimed at helping poor students afford college.

But then again this entire trend is not appropriate for a large number of political and social causes and yet it seems to be continuing anyway.

Some even say that corporations and the whole corporate philosophy has essentially high jacked our government and now more or less define its priorities.

The American people are the ones that are supposed to be in this position, not corporate giants by virtue of their ability to pay their way into positions of political and influence.

The Pell grant has a beneficent and honorable intention and is still one of the better educational grant programs out there. Let’s try as a nation to keep it that way.

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