About Pell Grant

The Pell Grant program is a type of post-secondary, educational federal grant program sponsored by the U.S. Department of Education. It is named after U.S. Senator Claiborne Pell and originally known as the Basic Educational Opportunity Grant program. Grants are awarded based on a "financial need" formula determined by the U.S. Congress using criteria submitted through the Free Application for Federal Student Aid (FAFSA).

The Pell Grant is covered by legislation titled the Higher Education Act of 1965, Title IV, Part A, Subpart 1; 20 U.S.C. 1070a.

Because of the high levels of need required to obtain a Pell grant, receipt of them is often used by researchers as a proxy for low-income student attendance and to indicate the economic diversity of the student body.

Amount of Grant
Federal budget legislation passed in early 2006 cut the federal financial aid budget by $12.5 billion. While the maximum Pell Grant legislative limit was raised to $5,800 through 2011, maximum Pell grant awards were not funded at this level. The maximum award available to students has been frozen at $4,050 since 2003-04.

For 2006-07, the maximum Pell grant available to students remains $4,050. Students with less need will receive smaller amounts. Grant moneys can be used for tuition, fees, and educational expenses (such as textbooks or required materials for a class).

For the award year of 2007-2008 the maximum Pell Grant Award is $4,310. The maximum award for the 2008-09 award year (July 1, 2008 to June 30, 2009) is $4,731. The maximum can change each award year and depends on program funding. The maximum grant is to increase to $5,400 by 2012.

Due to high increases in the cost of post-secondary education and slow or no growth in the Pell grant program, the value of Pell grants has eroded significantly over time. In 2005-06, the maximum Pell grant covered one-third of the yearly cost of higher education at a public four-year institution; twenty years ago, it covered 60% of a student's cost of attendance.
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