Here’s what you need to know about Pell grants and how to find out if you have one.
What is a Pell Grant and who gets it?
The Pell Grants were established by the Higher Education Act of 1965 and are the largest source of federal grant aid for students seeking higher education. It is a need-based assistance, originally designed to cover most of the expenses of students in severe financial difficulty.
“For 50 years, Pell grants have been a key way for the federal government to help low-income families, especially those making less than $60,000 a year, send their children to college,” Biden said in a speech Thursday.
Those families earning less than $60,000 a year make up 93% of recipients; two-thirds earn less than $30,000 a year.
Black families are twice as likely to receive Pell grants than white families. Biden’s forgiveness program aims to help close the racial gap in student loan debt by easing $20,000 for Pell Grant recipients, according to the White House. In addition, half of Hispanic students receive a Pell grant.
Approximately 80 million people have been helped since the inception of the Pell Grant program, according to the Institute for College Access & Success.
Do Pell grants need to be returned?
Generally speaking, a Pell Grant is a form of aid that does not need to be repaid, unlike a student loan.
Should I apply for Pell Grants?
You do not need to apply separately for Pell grants. They are awarded through the Free Application for Federal Student Aid (FAFSA), which must be submitted once per academic year.
The schools then use the information from the FAFSA to determine if you qualify for a Pell Grant and how much you can get.
Where does the money come from and how much can I get?
Grant funds come from the US Department of Education and are allocated directly to schools for distribution to their students, so it is important that students state on their FAFSA which school they plan to attend.
Pell grant caps change each year, so the grant covered almost 80% of the cost of a four-year public college, and now covers less than a third of the cost, according to the White House. For the 2022-2023 academic year, the maximum federal Pell Grant a student can receive is $6,895.
But this amount is limited. Students may only receive a Pell Grant for up to twelve semesters, or approximately six years, or until the student completes a bachelor’s degree or first professional degree.
Where can I find out if I received a Pell Grant?
If you are wondering if you received a Pell Grant, you can log on to the Federal Student Aid website. On the FSA/FAFSA portal, you can click “My Help” to see if you have received a Pell Grant and, if so, how much.
How do I get the $20,000 forgiveness if I got a Pell Grant?
Individual borrowers must have an adjusted gross income of less than $125,000 in the 2020 or 2021 tax year to qualify for forgiveness, and $250,000 for married borrowers. If you are still a dependent, your parents must meet these income requirements.
If the Department of Education already has information about your income, you may be automatically forgiven, as is the case for about 8 million borrowers.
If your forgiveness doesn’t happen automatically, the Biden administration announced that a simple app will be available in October. You will need to verify your income in the app.
The exemption applies to most types of federal loans, including federal student loans, graduate loans, Parent PLUS, and Pell Grants, but does not apply to private loans.
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