There are lots of kinds of college financial aid and lots of jargon and abbreviations to wade through while you’re evaluation your options. We’re here to help you decipher two of the most common terms you’ll hear and what you need to know about them.
What is the FAFSA?
The FAFSA, officially known as the Free Application for Federal Student Aid, is the form you must fill out to determine your eligibility for all federal financial aid (and some state- or college-based aid.) That includes federal grants, federal student loans, some state grants, and even some college aid programs.
It’s a big, time-consuming form, so we’ll stick to the basics in this article. You can learn more about how to fill out the FAFSA here.
What is a Pell Grant?
Pell Grants, issued by the U.S. Department of Education, are one of the financial aid options you may qualify for through your FAFSA application. Grants and scholarships are generally considered the best form of financial aid since you don’t have to pay them back. And one of the best options, if you qualify, is the Pell Grant.
For families with strong financial need, the Federal Pell Grant give you up to 6,345 (as of the award year July 1, 2020, to June 30, 2021) to help pay college expenses.
How do I apply for the Pell Grant?
The (FAFSA) is how you apply for a Pell Grant (and all other forms of federal financial aid). The FAFSA asks for financial information about you and your parents if you’re a dependent.
The feds use that information to calculate your financial need, based on the cost of attending your school and your Expected Family Contribution (EFC). Your potential Pell Grant award is based on your financial need, the cost to attend school, whether you’re enrolled full-time or part-time, and if you plan to attend school for a full academic year or less.
Who is eligible for the Pell Grant?
You’re eligible for a Pell Grant if you’re a U.S. citizen or a permanent resident with a green card and an undergraduate student who hasn’t earned a bachelor's or a professional degree. (Note: In some cases, students enrolled in a graduate teacher certification program may be eligible).
Also, students who have had a parent killed in military duty in Iraq or Afghanistan, and students with intellectual disabilities, may qualify for special Pell Grant support. Students who are incarcerated or have been convicted of certain drug-related or sexual offenses may not be eligible.
You’ll also have to show, via your FAFSA, that you have significant financial need. Your and your family’s income and assets will be weighed against your expenses for housing, utilities, transportation and child care. If your financial need matches the Pell Grant standard, a specific Pell Grant amount will be assigned to your file.
Reviewing your Pell Grant
Your Pell Grant doesn’t automatically renew each academic year. You’ll have to complete the FAFSA each year and it will be reviewed again for financial need. You’ll want to submit your Renewal FAFSA as soon as possible after October 1 each year. You’ll also have to remain eligible. That means you have to meet your school’s standard for satisfactory academic progress, avoid legal problems/arrest, maintain your citizenship status, and still show strong financial need. If you have any federal student loans already, you’ll also need to stay current on their repayment.
As we mentioned above, the FAFSA is vital to fill out but also a big project to tackle. To help make the process easier, check out our guide to the 17 things you need to do before you start work on the FAFSA.