Seeing the words “free money for college” might set off an alarm that you’re being baited for a phony come-on or scam. But unlike marketing ploys, Pell Grants are a very real way to get federal money for college that you generally don’t have to pay back. Here’s what you need to know to get this free money — and keep it.
Understand Pell Grant basics
The Pell Grant is a need-based financial aid program from the federal government that is designed to help undergraduates from low-income families afford college. Grants don’t require you to pay any money back and don’t carry interest, unlike loans. Your eligibility and the amount you receive is determined by your financial need based on information you provided in the Free Application for Federal Student Aid, more commonly known as the FAFSA.
The federal government changes the maximum award amount every year. The 2017-18 maximum is $5,920, $105 more than in 2016-17. All eligible students receive at least 10% of the maximum award amount for the year, depending on financial need. For 2017-18, the minimum amount is $596.
In May, Congress approved a budget agreement that included reinstating year-round Pell Grant funding, which hasn’t been available since 2011. As of July 1, 2017, Pell-eligible students can receive up to 150% of their scheduled award each year. That includes summer semesters, which may help students in financial need finish their degree sooner.
Confirm that you qualify
To qualify for a Pell Grant, you must be a U.S. citizen currently or soon to be enrolled as an undergraduate. If you’ve already earned a bachelor’s degree, you can’t get a Pell Grant to pursue another bachelor’s. However, Pell Grants are available to students enrolled in post-baccalaureate programs to become teachers.
Your eligibility will also depend on:
- Your Expected Family Contribution, the amount the government determines you and your family can pay for college
- The cost to attend your college
- Whether you’re attending part time or full time
- Whether you’re attending for a year or less
You can receive funding from only one school at a time, so if you’re dually enrolled, you’ll qualify for funding to attend one of them.
Apply every year using the FAFSA
If you want a Pell Grant or any other form of financial aid — including scholarships, work-study and federal student loans — you’ll need to submit the FAFSA. For the 2018-19 school year, you’ll have until June 30, 2019, to file, but it’s best to submit as close as possible to the Oct. 1, 2017, start date to increase your chances of qualifying for the most aid money. To continue eligibility for any type of federal aid, students must submit a new FAFSA each year. Always accept any grants and scholarships first before taking on federal loans.
Estimate your Pell Grant award before you enroll
Knowing how much aid you qualify for can help you decide where to attend college. To find out how much Pell money you might receive, use the FAFSA Forecaster tool available on the Federal Student Aid website. It’s a fairly accurate tool for Pell Grant seekers since it bases its predictions of federal aid on your EFC, which is what the Pell Grant Program also uses for eligibility.
But the tool won’t tell you about institution- or state-based aid, and it’s not a reliable predictor of any work-study you may be eligible for. You may also want to talk with the financial aid counselor at your intended school to help you estimate Pell as well as other aid you may qualify for.
» MORE: How to pay for college
Accept the grant
The financial aid award letter you get from your school will detail all the aid you’re eligible for, including Pell. The funds from a Pell Grant generally are disbursed directly toward tuition, fees and, if applicable, room and board. Leftover money typically is paid directly to you. You can receive Pell Grants for only 12 semesters, or six years. Contact your college to find out how you’ll get your Pell Grant aid.
Make sure you won’t have to repay your grant
To keep your Pell Grant, you must meet a few conditions. You’ll need to maintain enrollment in an undergraduate course of study at a U.S. school. You could lose all or part of your grant if your enrollment status changes — say, if you switch to part time from full time. Or, if you receive outside scholarships or other grants to pay for school after you accept the grant, your financial need would be reduced and you’d need to repay any Pell Grant money already given to you.
Your school will notify you if you must repay part of the grant. From there, you’ll have 45 days to pay unless you make another arrangement with your school. That’s crucial: If you don’t repay or make an arrangement, you’ll lose your eligibility for any federal student aid in the future.
Anna Helhoski is a staff writer at NerdWallet, a personal finance website. Email: email@example.com. Twitter: @AnnaHelhoski