Are you, or someone in your life, attending an extremely high-priced college or university? You may be in luck.
Pell Grants, the federal government financial aid program that offers free money for college, aren't just for low-income students. The cost of attendance is also factored into the equation. So if the cost of college is high compared to your income, you may still qualify for the Pell Grant.
Here are the 5 things every family needs to know about the Pell Grants:
You gotta be in it to win it
The first step in applying for federal, state, and often school-level financial aid is the Free Application for Federal Student Aid (FAFSA). This online form calculates for your school what a family can afford to contribute towards your child's education based on a complicated formula that factors in income, number of children in college and assets. You don't have to know the formula, and it's better that you don't. Each school's cost of attendance can cause the calculation to change.
Pell Grants are a fabulous way to pay for college, but the award is also a fabulous reason to fill out the FAFSA. You never know what financial aid you may receive in the form of Pell Grants, scholarships, university and state grants until you apply. Being proactive can save families thousands of dollars—just make sure you fill out the FAFSA correctly and supplement the form with any extra information requested by the government or school.
The special circumstances form matters
Pell Grant eligibility is based on income from a previous tax year, but your previous year's income may not accurately reflect your family's financial situation if your income dropped or a family member lost their job. For instance, an adult returning to school often can qualify after giving up their current job to take on the challenge of academic studies, but they may not have qualified based on their previous income. You can get a form called the special circumstances form at your college's financial aid office to report current income.
Part-timer? No problem
Don't worry about whether or not you're a full-time student. Federal student aid is also offered to part-time students with at least half-time status. That said, the Pell Grant program generally isn't for graduate level or students earning a second degree. But there are other programs which are, mainly on the university level in the form of grants and scholarships. Fill out the FAFSA - and the special circumstances form if necessary—to see what you may qualify for.
You won't always get the maximum amount
The Pell Grant has a maximum amount of $5,920 for the 2017-2018 school year, but it's not always the amount that's awarded. You could get anywhere from $0 to $5,920. You would then supplement education with other forms of financial aid from student loans to scholarships. Be very careful to fill out all forms requested from the school and the state that may help you get more aid. Don't forget federal tax credits, which can add another $2,500 per year, per student, to the money you can use to fund your child's education. To find out all your options, sit down with both high school counselors and college financial aid officers.
How and to how many students the money is distributed
The money is sent directly to the student's account at their college to pay for tuition and other expenses. This is the same way you would receive most student aid, with the exception of some private scholarships.
According to the College Board, over 7 million students received Pell Grants averaging offered nearly $4,000 for the 2016-2017 academic year. While most Pell Grants were issued to students with family or individual incomes under $40,000, 10% were awarded to individuals who had no dependents with income above $40,000 and about 25% to families with income above $40,000 in the 2015-2016 academic year.
Whatever you do, whatever your income, fill out the FAFSA so you can say you want to receive any aid for which you might be eligible. Hey, you never know.
Editorial Disclaimer: Opinions expressed here are author's alone, not those of any bank, credit card issuer, or other company, and have not been reviewed, approved or otherwise endorsed by any of these entities. All information, including rates and fees, are accurate as of the date of publication.