Federal Pell Grants

A Pell Grant is money the federal government provides for students who need it to pay for college. Federal Pell Grants are limited to students with financial need, who have not earned their first bachelor's degree or who are not enrolled in certain post-baccalaureate programs, through participating institutions.
WHAT IS A PELL GRANT?
The Pell Grant is named after U.S. Senator Claiborne Pell, Democrat of Rhode Island, and was originally known as the Basic Educational Opportunity Grant. A Pell Grant is generally considered to be the foundation of a student's financial aid package, to which other forms of aid are added. The Federal Pell Grant program is sponsored by the United States Department of Education (DOE) which determines the student's financial need. The U.S Department of Education uses a standard formula to evaluate financial information reported on the Free Application for Federal Student Aid (FASFA) to determine the student's expected family contribution (EFC).
The Pell Grant is covered by legislation titled the Higher Education Act of 1965 (HEA), Title IV, Part A, Subpart 1; 20 U.S.C. 1070a. These federal funded grants are not like loans and do not have to be repaid. Students may use their grants at any one of approximately 5,400 participating postsecondary institutions. These federally funded grants help about 5.4 million full-time and part-time college and vocational school students nationally.
HISTORY
Today, the Pell Grant program assists undergraduates of low-income families, who are actively attending universities and or other secondary institutions. However, before the Pell Grant became what it is today, it went through numerous changes. Found below is a list of the most significant changes throughout the history of the Pell Grant.
In 1965, Congress passed the Higher Education Act of 1965(HEA). President Lyndon B. Johnson implemented the HEA as a part of his administration’s agenda to improve the higher education process in the United States. HEA was the initial legislation to benefit students of lower and middle-income families. The HEA program not only included grants, but also, provided low interest loans to students who did not fully qualify to receive grants. Universities and other institutions such as vocational schools benefited as well from the HEA program, receiving federal aid to improve the quality of the educational process. "The student aid programs administered by the U.S. Department of Education are contained in Title IV of the HEA, which is why they are referred to as "Title IV Programs."
Further detailed amendment information can be found at these following links.
In 1972, Senator Claiborne Pell set forth the initial movements to reform the HEA.Title IX Higher Education Amendments were a response to the distribution of aid in the current grant. The “Basic Grants were intended to serve as the "floor" or "foundation" of an undergraduate student's financial aid package. Other financial aid, to the extent that it was available, would be added to the Basic Grant up to the limit of a student's financial need."
Notable Amendments of 1972
"Reauthorized the three campus-based programs; renamed the National Defense Student Loan Program as the National Direct Student Loan Program; Renamed the Economic Opportunity Grant Program the Supplemental Educational Opportunity Grant Program(SEOG); Federal Supplemental Educational Opportunity Grant proprietary (profit-making) schools became eligible to use Title IV Funds; and
The Educational Opportunity Grant Program would no longer function as a stand-alone program of gift aid, but instead would be linked with the Basic Grant Program."
In 1978, the Middle Income Student Assistance Act of 1978(MISAA) was signed by President Jimmy Carter. "This bill provides more generous Basic Educational Opportunity Grant—Pell grants-to low-income students, and makes eligible students from families with incomes up to about $25,000. An additional 1.5 million students from middle-income families will be eligible for the Basic Grants program."
In 1980, one of the most significant alterations to the HEA occurred. It was renamed from Basic Education Opportunity Grant Program to the Pell Grant to honor Road Island Senator Claiborne Pell for his hard work and dedication toward improving higher education in the United States.
Notable Amendments of 1980
“As a result of the 1980 Amendments, the Parent Loan for Undergraduate Students (PLUS) Program was also established. Middle-income families were now able to borrow $3,000 a year for each dependent child in school regardless of parent income.”
In 1986, the Pell Grant experienced a number of changes that reflect on how the grant is administered today. A notable alteration was made to honor Kentucky Congressman Carl D. Perkins by changing the National Direct Student Loan Program to the Perkins Loan Program.
Notable Amendments of 1986
“Restricted eligibility for federal educational loans by requiring all applicants for Guaranteed Student Loans to demonstrate financial need for the interest subsidy, regardless of income, limited the PLUS Loan Program to parent borrowers eliminating graduate students and independent undergraduate students, created the Supplemental Loan to Students (SLS) to provide loans to graduate and professional students and independent undergraduate students, established limits on duration of student's eligibility for Pell Grant funds, restricting such eligibility to a specified number of years of full-time enrollment, linked Pell Grants and Federal Supplemental Educational Opportunity Grant SEOG, by giving Pell Grant recipients priority for the SEOG, gave student financial aid administrators broader authority to exercise their professional judgment in all the Title IV programs to reflect a student's exceptional circumstances, changed the name of the National Direct Student Loan Program to the Perkins Loan Program."
The Higher Education Amendments of 1992 included the most extensive list of changes during history of the Pell Grant Program.
Notable Amendments of 1992
"Created separate Federal Unsubsidized Stafford Loan Program,
increased annual loan limits PLUS Loan,
established and implicated new rules pertaining towards academic school years,
changed structure of loan limits under the Federal Perkins Loan Program,
improved work-study program for undergraduates."
Extended list of Amendments
Notable Amendments of 1998
"Established Performance Based Organization (PBO)
Raised funding for the Federal Pell Grant
Expanded eligibility by using new methods to determine a student's eligibility
Students that lose their eligibility to FFEL or Direct Loan program are not eligible for Pell Grants
Pell Grant extended to certain post graduates that are planning to teach."
Extended list of Amendments
RECENT LEGISLATION
New for 2011-2012 FASFA Application: More questions skipped on the form, no minimum enrollment hours continued, a higher income allowed, summer Pell Grants calculated for the higher of the two possible award years, the awards themselves at historic highs, and a new regulation that schools must disburse Pell funds by the seventh day of the start of the payment period (school session). Although a shorter application process, the funds for the 2011-2012 Federal Pell Grant Program may cause financial problems for many students. The estimated Recovery Act for 2011-2012 award year is $17,114,000,000. The Pell Grant Program was funded at this amount over the two years of 2008-2010 as part of the American Recovery and Reinvestment Act of 2009; however, the additional funds do not match the needs of the increasing numbers of students enrolling in college and qualifying for aid through the recession or the number of unaccredited institutions that provide Pell Grant funds. The Pell Grant Program, widely considered to be the backbone of financial aid to the country's most needy students, was subject to a decrease in funding as part of a Continuing Resolution (H.R. 1), which cleared the House in February, 2011 and cut about $60 billion from the federal budget. Congress levied a $5.7 billion cut to the Pell Grant Program. The changes would take effect for the 2011-12 school year, decreasing the maximum amount of aid for the most needy students from $5,550 to $4,705 a year, a difference of $845. In addition, about 1.7 million students who receive smaller Pell Grants would become ineligible for the program. The approval for the cut of Pell Grant funds is not certain due to the long received bipartisan support from the Senate. As of April 24, 2011 funds have not been, as the Senate has not voted to pass this legislation.
PELL GRANT APPLICANTS
HOW TO APPLY
The application process requires the student and the student’s family to complete a Free Application for Federal Student Aid (FAFSA) form. The FASFA application can be completed and submitted at www.fasfa.ed.gov. The applicant should complete the FAFSA form for the first time prior to starting the freshman undergraduate year, and then update the form each year as he/she progresses through the college undergraduate term. Each year, the applicant is asked to include information about parent or guardian income, financial need and grades, etc. The first step in applying for the Pell Grant is to complete or update the FAFSA form on or after July 1st of each year. There are self-explanatory instructions in the "Fill out a FASFA" section. Students filing out the FASFA need personal pin number, parent's pin number, student's and/or parents' federal income tax information, and school identification code(s). High School students can get a FASFA form from school counselors or fill out the form online. If corrections need to be made to a completed FASFA form, changes can be made in step 3 of the application in the "Make Corrections to a Processed FASFA" section. When the student completes or updates the FAFSA application, students must save and submit the information. After the initial FAFSA application is submitted, the student will be notified by email or regular postal delivery if and when Pell Grant funding is awarded. Students or parents should always make copies of the confirmation sheet for personal records.
ELIGIBILITY FOR PELL GRANTS
To determine Pell Grant eligibility, the student must keep in mind the primary reason why the Pell Grant was instituted in the first place, to give students who could not otherwise afford college the financial aid they need to get a higher education. The federal Pell Grant eligibility criteria therefore falls in line primarily in accordance with this purpose, and it is financial need for aid that will be weighed the most heavily during this process.
The United States Department of Education has a standard formula to evaluate the information that each person supplies when applying for the Pell Grant. The formula used was created by Congress from criteria submitted through the FASFA form. This formula produces a number that is called the Expected Family Contribution (EFC), which determines a student's eligibility.
This grant requires that each applicant
1) Is an undergraduate student who has not yet earned a bachelor’s degree;
2) Is a United States citizen or an eligible non citizen;
3) Has a high school diploma or a GED, or demonstrate the ability to benefit from the program
Financial Need, Cost of Attendance, and EFC:
As Pell Grant eligibility is so heavily reliant on the ability to demonstrate an exceptional financial need, it is first important to define what that means exactly. Financial need is ultimately a product of the following equation:
•Financial Need = Cost of Attendance (CoA) - Expected Family Contribution (EFC)
The greater the disparity is between the cost of attending a particular institution and the money a family has to put towards college education, the higher the student's financial need will be in the eyes of the Department of Education.
Cost of attendance,(CoA), is simply the standardized amount that is supposed to represent the entire cost of going to a college for a full academic year. Expected family contribution (EFC) is an indicator of the amount of money the student's family is able to contribute towards the cost of higher education, and it is calculated once the student has successfully submitted the FAFSA.
The Free Application for Federal Student Aid (FAFSA) is the government’s universal application for funding from the government. It is the only application that a student completes to become eligible for the Pell Grant. The information is used to determine EFC during the submission of the FAFSA.
•Student’s Income (and assets if independent)
•Parents’ Income (and assets if dependent)
•Household Size
•Number of Family Members Attending Postsecondary Institutions (excluding parents)
Other factors that may play a role to a minor extent include parents’ age, and if they are employed or not. A formula is then used to determine a final EFC value, and this will take into consideration only a percentage of net income after certain allowances are made for basic living expenses, and taxes.
Pell Grant Specific and Federal Eligibility Requirements:
There are other eligibility requirements in addition to financial need that the student must satisfy in order to become eligible for the Pell Grant. These can be classified as either Pell Grant specific or general federal student aid requirements depending on whether or not they exist in regard to only the Pell Grant, or for other types of federal student aid as well. There are only two Pell Grant qualifications that are specific to this award.
•The student must be an undergraduate student, and not have earned a bachelor’s or graduate degree. The main exception to this requirement is if the student is enrolled in a postbaccalaureate teacher certificate program, or another graduate program that may lead to licensure.
•The student must not be incarcerated in a federal, or state penal institution.
•The student must have a valid social security number.
•The student must be United States citizen, or eligible non-citizen.
•The student must be able to demonstrate the ability to benefit from enrolling at a postsecondary institution. A high-school diploma, or General Education Developmental certificate will suffice, as well as being able to pass an ability-to-benefit test.
Other ways of establishing the ability to benefit include showing evidence that the student has completed a high school education from within a state-approved homeschooling environment, being able to complete at least six credit-hours of coursework at the college of choice, or being able to show that he/she meets other state standards that are federally approved.
•The student must be working towards a qualified, degree-oriented program at one of the 5,400 postsecondary institutions that participate in the Pell Grant program.
•The student must make what is considered to be “satisfactory academic progress” as defined by his/her school.
•If the student is a male between the ages of 18 and 25, he must be enrolled with the Selective Service. He can do this when he completes the FAFSA.
The student may not be eligible for federal funding if he/she hasa drug conviction that occurred while receiving federal student aid. This will depend heavily on one'sown personal circumstances, and may be reversed if one undertakes the appropriate remediation steps.
The student must also sign a statement that will certify that he/she will only use the aid for education related purposes, and that s/he is not currently in default for any federal student loans or does not owe a refund for any federal education grants.
AWARD AMOUNT
As all grants, there is a maximum amount that the government funds for each applicant. For the 2010-2011 award year, the maximum amount is $5,550. The maximum amount of the grant usually depends on the EFC and several other factors, including cost of attendance (tuition and different fees including room and board, books, and meal plans) and the amount of time the student attend college, whether it is a full academic year and whether one is a full time or part time student. An applicant cannot receive Pell Grant funds from more than one college at a time. Once one has been considered eligible, the money can be obtained a couple of ways. The student's school can apply Pell Grant funds to school costs, pay the student directly, usually by check, or combine these methods. The school must tell the student in writing how much the award will be and how and when it will be paid. Schools must disburse Pell Grant funds once a semester/term or twice during the academic school year.
REFERENCES
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