Grants for Education - Federal Pell Grants

Pell Grant-Scholarships, Grants Loans

The best first step is to understand what a “grant” is and how it differs from other types of loans.

Grants are monies distributed an institution. This is most frequently a department of a government but can also be a company, corporation, foundation or trust. The funds are given to a recipient that is, more often than not, a non-profit organization but can also be a business, or an individual.

Without a doubt, the most well known educational grant in the United States is the “Pell Grant”. A Pell Grant is an amount of money provided by the federal government to individual students who need the money to pay for a college education. Named after U.S. Senator Claiborne Pell, Pell Grants are restricted to those students who have financial need. Unlike loans, these federally funded awards do not have to be paid back.

The Pell Grant program is administered by the U.S. Department of Education. They are responsible for both determining the student’ level of financial need and for disbursing the funds. To determine a student’s eligibility, the department relies on a standard formula to evaluate financial information provided by the prospective student and their family. This information is reported on the “Free Application for Federal Student Aid” (FAFSA).

The FAFSA form should be completed and submitted before beginning the first (freshman) year of undergraduate studies. The information provided is required to be updated annually as the student moves through his/her undergraduate career.

The prime focus of the FAFSA form is to determine what is known as the “Expected Family Contribution” (EFC). The amount of money awarded is based on the EFC and other criteria such as the tuition of the school being attended, room and board, books, meal plans as well as other factors such as if the student is attending class full or part time. For the 2010/2011 term, the maximum award was $5,550.

For more information about Pell Grants visit the U.S. government Pell grant site. More information about the FAFSA application is available here.

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