The only federal grant that the U.S. Department of Education offers for higher education is the federal Pell grant, which is a needs-based grant that is awarded to low-income undergraduate college students who have not yet earned a bachelor's degree or any other professional degree. Many graduating high school students and current college students rely on financial aid to pay for college classes and associated expenses. Financial aid can come in many forms, such as loans, grants and work-study programs. Of these options, grants are the most sought after form of financial aid because they do not require repayment.
College students who are seeking a Pell grant must apply for it by completing the Free Application for Federal Student Aid, FAFSA. By completing the FAFSA, college students are applying for all available federal financial aid programs, not just the Pell grant. The maximum Pell grant amount is $5,500 per academic year, as of August 2011. However, not all students qualify for the full amount. The Pell grant amount that is awarded depends on your expected family financial contribution, the cost of attending the school in which you are enrolled, whether you are a full-time or part-time student and whether you attend a full academic year. It's advised that college students compete the FAFSA as early in the calendar year as possible to receive the maximum amount of financial aid. College students can submit completed FAFSAs as early as Jan. 1 of each year. However, the student and parent federal tax return information is required when completing the FAFSA.
College students who received their first Pell grant within the 2008 to 2009 academic year or after can be awarded a Pell grant for up to 18 semesters of full-time study. This limit is equivalent to nine full Pell grant payments. College students can keep track of how many Pell grants they have been awarded and their remaining eligible awards on the National Student Loan Database or by requesting a Student Aid Report, SAR, from the school's financial aid office. Only one Pell grant may be award per award year, as of the 2011 to 2012 award year. Federal budget cuts eliminated a separate crossover summer semester award period. College students who receive a Pell grant for the 2011 to 2012 award year may utilize part of their Pell grant award for a summer semester of classes. However, students are advised to notify the school's financial aid office of their intention on attending summer semester so that, if necessary, the school can schedule appropriate disbursement dates so that there is Pell grant money to go toward summer semester classes.
Regardless of other qualifying factors, college students who are eligible to receive a Pell grant will receive the maximum award amount of $5,500 if their parent or guardian died due to military service in Afghanistan or Iraq after Sept. 11, 2001. To be eligible for this program, students must be 24 years old or younger or have been enrolled in college at least part time at the time of the parent or guardian's death.
If a student is a awarded a Pell grant, the college or university may directly issue a check for the full amount payable to the student or apply the Pell grant funds to the student's cost of attending school and issue the student a check for any remaining funds. Most colleges and universities apply the Pell grant to the cost of attendance and issue the student a refund check for the remaining Pell grant balance. Pell grant disbursements are made once per term, which is a semester, trimester or quarter. If a college or university does not use terms, then Pell grant disbursements must be paid twice per academic award period. For example, if a college uses semesters, a disbursement for 50 percent of total Pell grant award is made for the first semester, and a second disbursement is made for the remaining 50 percent for the second semester. If a college student is planning on attending summer semester, the disbursement percentages may be divided evenly among three semesters.
If a student is awarded a Pell grant based on full-time study and the student withdraws from classes that bring the student below full-time student status, the student is expected to repay all or a portion of the Pell grant that was disbursed to the student. In other words, withdrawing from classes can be costly, so students are advised to meet with someone in the school's financial aid office before officially withdrawing from classes.