What is a Pell Grant? Who qualifies? What to know after Biden announces student loan plan

  • President Joe Biden announced a plan to forgive or reduce student debt for borrowers across the country.
  • People who received Pell Grants are eligible for $20,000 in federal student debt forgiveness.
  • But what is a Pell Grant? Do they have to be repaid? Here's what to know.

President Joe Biden on Wednesday announced his plan to forgive or reduce student debt for millions of borrowers.  

Though the Biden administration had already agreed to wipe student debt for certain borrowers, the president this week said people who earn less than $125,000 a year are eligible for cancellation of up to $10,000 in federal student loans. People who received Pell Grants may have $20,000 forgiven. 

Students at educational institutions across the country receive Pell Grants. People who have received Pell Grants make up more than 60% of the “borrower population,” the White House said. And more than 70% of students at historically Black colleges and universities are federal Pell Grant-eligible, according to the United Negro College Fund.  

 But what is a Pell Grant? Who receives them? Here’s what you need to know.

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What is a Pell Grant?  

A federal Pell Grant is money awarded to students who “display exceptional financial need,” according to the Department of Education.  

The maximum Ffederal Pell Grant award for the 2022-2023 award year, which stretches from July 1, 2022, to June 30, 2023, is $6,895.

The amount a recipient can get depends on a few factors, including:  

  • Expected family contribution, which is calculated by the information a student and their family reports on their Free Application for Federal Student Aid (FAFSA) forms.
  • The cost of attendance, as determined by an educational institution for a student’s program.
  • A person’s status as a full-time or part-time student.
  • A person’s plans to attend school for a full academic year, or for less time.

Who qualifies for Pell Grants?  

Beyond going to students who show financial need, federal Pell Grants are usually awarded to undergraduate students who have not earned a bachelor’s degree, a graduate degree or other professional degrees. But some students in postbaccalaureate teacher certification programs can receive federal Pell Grants, according to the Department of Education.

There are additional circumstances that may mean a person is eligible for federal Pell Grant money:  for example, if their parent or guardian was a member of the U.S. armed forces and died “as a result of military service performed in Iraq or Afghanistan after the events of 9/11,” in addition to other stipulations.

Many Pell Grant recipients come from families that made less than $60,000 a year, according to the White House.

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Do I have to pay back a Pell Grant?  

A Pell Grant is not a loan, and it typically does not need to be repaid.  

In certain circumstances, a grant may need to be repaid, such as a change in enrollment status, or if a person received outside scholarships or grants that lowered their need for federal aid. 

How do you apply for a Pell Grant?  

If you think you might be eligible for a Pell Grant, you should start by submitting a FAFSA form. Your school will use that information to determine your eligibility.  

If you are eligible, the school will determine how much you’re eligible to receive. You have to fill out a FAFSA form each year you’re enrolled in higher education to remain eligible for federal student aid, according to the Department of Education.  

Schools that participate in the program receive “enough funds each year from the U.S. Department of Education to pay the federal Pell Grant amounts for all its eligible students,” according to the department. A person’s school may pay you directly, apply the money to your school costs, or some combination of the two.

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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 account on studentaid.gov. You may have to wait to enter the site because it is seeing heavy traffic following Biden's announcement this week. 

You could also check with the financial aid office of your college or university, which may be able to provide more information.

Contributing: Medora Lee and Bailey Schulz, USA TODAY