- President Joe Biden announced a plan to write off or reduce student debt for borrowers across the country.
- People who receive Pell grants are eligible for $20,000 in federal student debt relief.
- But what is a Pell grant? Should they be reimbursed? Here’s what you need to know.
President Joe Biden on Wednesday announced his plan to write off or reduce the student debt of millions of borrowers.
While the Biden administration had previously agreed to write off student debt for some borrowers, the president said this week that people who make less than $125,000 a year are eligible for up to $10,000 in federal student loans to be written off. People who receive Pell grants can be forgiven $20,000.
Students across the country receive Pell grants. According to the White House, people who received Pell grants make up more than 60% of “borrowers.” More than 70% of historically black college and university students are eligible for the federal Pell Grant, according to the United Fund for Negro Colleges.
But what is a Pell grant? Who gets them? Here’s what you need to know.
What you need to know about Biden’s debt plan:Am I eligible for student loan forgiveness?
What if I don’t pay student loans? TikTokers are wrong about the “ostrich” method
What is a Pell Grant?
According to the Department of Education, the federal Pell Grant is money awarded to students who “demonstrate exceptional financial need.”
The maximum federal Pell Grant amount for 2022-2023, which runs from July 1, 2022 to June 30, 2023, is $6,895.
The amount a recipient can receive depends on several factors, including:
- Expected Family Contribution, which is calculated based on the information the student and family provide on their Free Application for Federal Student Assistance (FAFSA) forms.
- The cost of attendance, determined by the educational institution under the student program.
- A person’s status as a full-time or part-time student.
- The person’s plans to attend school for the full school year or for less time.
Who is eligible for Pell grants?
In addition to students who demonstrate financial need, federal Pell grants are typically awarded to undergraduate students who do not hold bachelor’s, master’s, or other professional degrees. But according to the Department of Education, some students in post-baccalaureate teacher certification programs may receive federal Pell grants.
There are additional circumstances that may mean that a person is eligible for federal Pell Grant funds. For example, if their parent or guardian served in the US military and died “as a result of military service in Iraq or Afghanistan after 9/11”, in addition to other provisions.
Many Pell Grant recipients come from families that earn less than $60,000 a year, according to the White House.
How do I get forgiveness for my student loans? Qualifying for Biden Debt Relief, Explained
Should I return the Pell Grant?
The Pell Grant is not a loan and usually does not need to be repaid.
Grant refunds may be required in certain circumstances, such as when an enrollment status changes or if an individual has received third-party scholarships or grants that have reduced their need for federal assistance.
How do I apply for a Pell Grant?
If you think you are eligible for a Pell grant, you should start by filing the FAFSA form. Your school will use this information to determine your eligibility.
If you qualify, the school will determine how much you are eligible to receive. According to the Department of Education, you must complete a FAFSA each year you enroll in higher education to remain eligible for federal student aid.
Schools participating in the program receive enough funds annually from the US Department of Education to pay federal Pell Grant amounts to all eligible students, according to the department. The person’s school may pay them directly, use the money to pay for your school expenses, or use some combination.
Opinion:Student loan forgiveness by Biden is a good start, but not good for borrowers like me.
How do you know if you have a Pell Grant?
If you don’t know if you received a Pell Grant, you should check your personal studentaid.gov account, according to numerous reports.
You can also contact your college or university’s financial aid office, who can provide more information.
Contributing: Medora Lee and Bailey Schultz, USA TODAY