The Federal Pell Grant Program provides students with financial aid that, unlike a student loan, does not have to be repaid. The Free Application for Federal Student Aid, or FAFSA, is used by students to apply for a Pell Grant.
Pell Grants are awarded to undergraduate students who have not earned a bachelor's or professional degree. The college or university, based on established federal guidelines, determines eligibility and award amounts for each grant. Federal Pell Grants are based on need, cost of attendance, and whether the student goes to school full or part time.
In 2016 / 2017, the Pell Grant limit was $5,815. Starting in July of 2012, students are eligible to receive these grants for the equivalent of 12 semesters. These grants can be used to pay for college expenses at 5,400 post-secondary institutions. After completing the FAFSA, a Student Aid Report will be sent to the student, outlining the Expected Family Contribution, or EFC. The Expected Family Contribution is the basis for awarding Pell Grants.
In 2011, there were 9.4 million Pell Grants awarded, with an average award value of $3,800. Participating schools can choose to pay the student directly or credit the student's account. Payments must occur at least once per term.