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    Everything You Want To Know About The Pell Grant

    Pell Grants are the largest source of federally-funded grants and are offered solely based on financial needs. 

    Academic scores, merit, and extra-curricular performances aren’t taken into account when offering this grant. 

    Keep reading to learn more about this type of financial aid and how you can apply for it.

    What Is The Pell Grant?

    The Pell Grant is a need-based financial assistance provided to undergraduate students belonging to low-income families. Unlike federal or private student loans, you don’t need to pay back the money obtained. 

    The sole purpose of the grant program is to motivate students to pursue higher studies and supply the necessary financial aid to cover the cost of attendance.

    Pell Grant's eligibility criteria are exactly similar to that of other financial aid approved by the Free Application for Federal Student Aid (FAFSA). The grant is estimated on the basis of the candidate and their parent’s EFC, the total expense of the institution, and the enrollment status of the student. 

    The Advantage

    There are multiple advantages of a Pell Grant. Among all of the benefits, the most fascinating one is that the candidates don’t need to pay back the amount granted by the program. Other benefits include:

    • The application process is easy and straightforward. Interested students and parents can fill out the free FAFSA form available in most schools, colleges, libraries, and online.
    • Eligibility is need-based, not merit-based, hence students from low-income groups can access quicker approvals.
    • If you are approved for a Pell Grant, it also increases your chances of obtaining the Federal Supplemental Educational Opportunity Grant (FSEOG).

    The Major Drawback

    There are a few downsides to the Pell Grant program as well. First of all, eligibility is only limited to students belonging to lower-income families. 

    They should be enrolled in colleges which are a part of this program for at least half-time throughout the academic semester. 

    Failure to maintain enrollment status and academic progress can also lead to eligibility loss. 

    Another major drawback of this program is limited funds. For the 2020-2021 academic session, the maximum award is set at $6,345. In most cases, this amount isn’t enough to cover the costs of tuition, books, and other education-related necessities throughout the session, thus forcing students to look for other options. 

    To top it all, the total sum awarded is modified every year, primarily based on the funds allotted by the Federal Government.

    Other Sources Of Aid 

    In addition to Pell Grants, other available financial aid options include student loans and work-study programs.

    Student Loans 

    There are three types of federal student loan programs 

    Direct subsidized loans

    Direct unsubsidized loans

    Direct PLUS loans 

    Direct subsidized loans are offered to students with proven financial needs. With this type of loan, there is hardly any interest. 

    Unsubsidized loans don’t rely upon the student’s financial need and have a minimum rate of interest. 

    Direct PLUS loans are credit-based loans designed for parents to pay for the educational expenses of their children. 

    All of these loans need to be repaid; however, eligible borrowers can benefit from features like extended terms, lower rates, and multiple repayment options.

    Work-Study Program

    In the federal work-study option, students in need of financial aid are provided with part-time paid jobs. These jobs allow them to take care of the educational expenses while balancing between work and study. Through this initiative, students are mostly alloted jobs related to community services or paid professional courses. This program not only facilitates the students to pay their course expenses but also assists sometimes with relevant work experience. 

    The Steps For Getting Approved For The Pell Grant

    Follow these steps to apply for the Pell Grant:

      Step 1

       Fill out the FAFSA form with all the required details and submit it online or via mail.

      Step 2

      Wait for the Student Aid Report to be delivered. It usually takes 1-2 weeks and outlines your Expected Family Contribution (EFC) and other federal aid programs that you might be eligible for.

      Step 3

      Respond to the Report within the allotted time.

      Step 4

      The funds will be paid directly to your college, usually 2-4 weeks prior to commencement of the new academic semester. Any leftover funds will be disbursed to your account by the college’s financial aid authorities.

      Bottom Line

      It is quite crucial to apply for the Pell Grant before the start of every new academic year. You must also keep in mind that this grant isn’t taxable income. However, beware that if you leave the course midway or change the enrollment status post disbursal of funds, it might incur tax implications and you’ll be asked to repay the award.