What you need to know about Federal Pell Grants

Here’s a useful guide to Federal Pell Grants:

As a parent or college student, you know how expensive it can be to earn a degree. Unfortunately it isn’t always easy to come up with the money you need to see you through to graduation. That’s why it’s important to find sources, such as grants and student loans, that will help pay for a college education. The nice thing about a grant is that it is similar to a scholarship–you don’t have to pay it back. For those who qualify, a Federal Pell Grant may be just the ticket. Following is a guide to Federal Pell Grants.

What Is a Pell Grant?

The Federal Pell Grant program was instituted in 1965 to assist low income students with college expenses. It was enacted through the Higher Education Act of 1965, and was named for one of its staunchest supporters, Senator Claiborne Pell, of Rhode Island. More than 5,400 colleges and universities in the U.S. take part in the program. Because it’s a grant and not a loan, you won’t have to worry about paying the money back.

Who Can Qualify

Pell Grants are usually awarded to lower income undergraduate students–those who have not earned a bachelor’s degree or a professional degree. There are some exceptions, such as select students who are part of a teacher certification program and have received a bachelor’s degree. Federal Pell Grants are considered a foundation of federal aid, meaning loans can be added to the grant money to pay for your college education.

Amount of a Pell Grant

For the time period of July 1, 2011 to June 30, 2012, the maximum amount you could be granted through a Federal Pell Grant is $5,500. The actual amount of any given Pell Grant varies. The variables that establish how much money you could be awarded through a Federal Pell Grant are determined by your financial need combined with your actual school expenses. Additional considerations include whether or not you attend school full or part time and whether you’ll be attending school for an entire academic year.

Military Considerations

Special dispensation is awarded to eligible students whose parent or guardian passed away while serving in Iraq or Afghanistan since September 11, 2001. The student must meet all the initially applicable requirements as well as the following–they must have been less than 24 years of age or enrolled part or full time in a participating school at the time of their parent’s or guardian’s death.

Federal Pell Grant Limitations

In the 2011 fiscal year, money set aside for Federal Pell Grants caused some changes in how the money is disbursed. There is no more allowance for eligible students to receive more than one Pell Grant during any given year. Beginning with the 2011-2012 time period only one Pell Grant can be awarded to a student. If you’ve previously received a Pell Grant on or after July 1, 2008, you are limited to continue receiving a grant for 18 semesters.

How the Money Is Received

Federal Pell Grant money is distributed differently than money from a federal student loan. With a student loan, the money is sent to the school who then applies it to your tuition and other college expenses. Only after that’s done can you receive a portion of the money yourself. Instead, schools have the option of applying the Pell Grant money directly to your college expenses, or releasing the money to you, or any combination thereof. The school must inform you in writing how much money you’ve been granted and when and how the money will be disbursed. This method will help you determine how much, if any, money you’ll need to take out in student loans. The school is obligated to disseminate Pell Grant money at least once each term. Schools that don’t break up the school year into terms must disburse the money at least twice each academic year.

Additional Financial Help

For those students who are deemed eligible for Federal Pell Grants, and who can display an extraordinary financial need, additional financial help may be forthcoming. A program called the FSEOG, or Federal Supplemental Educational Opportunity Grant program, has been instituted to help relieve financial pressure. Pell Grant recipients who are undergraduates and whose families are unable to contribute very much money toward a student’s college education will be given first crack at a FSEOG. Like Pell Grants, Federal Supplemental Educational Opportunity Grants are gifts, and there is no need to repay the money. Depending on when you apply, and your financial need, you could be awarded between $100 and $4,000 per year. Another determining factor is the financial rules of the school you’re attending. If you’re deemed eligible to receive a Federal Supplemental Educational Opportunity Grant, the money can be credited to your school account or paid directly to you.

Guest post from Quinn Green. Quinn writes for OnlineDegree.net, a site that provides online degree info.

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