Thursday, October 23, 2008

Federal pell grant program - What is this?

The Federal Pell Grant Program is the the largest federal grant program for undergraduate education. It provides need-based direct grants to low-income undergraduate and certain postbaccalaureate students to promote access to postsecondary education and to help them pay for their education after high school.
Federal Pell Grants are grants awarded through participating institutions to students with financial need who have not received their first bachelor's degree or who are enrolled in certain postbaccalaureate programs that lead to teacher certification or licensure.

Participating institutions either credit the Federal Pell Grant funds to the student's school account, pay the student directly (usually by check) or combine these methods.

  • Students must be paid at least once per term (semester, trimester, or quarter); schools that do not use formally defined terms must pay the student at least twice per academic year.
  • The school must tell you in writing how much your award will be and how and when you'll be paid. Schools must disburse funds at least once per term (semester, trimester, or quarter). Schools that do not use semesters, trimesters, or quarters must disburse funds at least twice per academic year.
Students may use their grants at any one of approximately 5,400 participating postsecondary institutions.
Unlike loans a Pell Grant does not have to be repaid.

Ranging from $400 to $4050 per year, Grant amounts are dependent on the student's expected family contribution (EFC) as calculated by the FAFSA application - After filing a FAFSA, the student receives a Student Aid Report (SAR), or the institution receives an Institutional Student Information Record (ISIR), which notifies the student if he or she is eligible for a Federal Pell Grant and provides the student's EFC.
  • For example, for the 2005-2006 year a student must have an EFC of less than 3850 to receive ANY Pell Grant.

Pell grants also dependent on:
the cost of attendance (as determined by the institution), and whether the student attends for a full academic year or less.
It also dependent on the student's enrollment status (full-time or part-time) - remember that Although you don't have to be full-time to receive federal Pell Grant, yet you will be awarded based on full-time enrollment.

  • Students may not receive Federal Pell Grant funds from more than one school at a time.
Financial need:

The fundamental elements in this standard formula are the student's income (and assets if the student is independent), the parents' income and assets (if the student is dependent), the family's household size, and the number of family members (excluding parents) attending postsecondary institutions.

The EFC is the sum of:
  • a percentage of net income (remaining income after subtracting allowances for basic living expenses and taxes)
  • a percentage of net assets (assets remaining after subtracting an asset protection allowance).

Different assessment rates and allowances are used for:
  • dependent students
  • independent students without dependents
  • independent students with dependents

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