Pell Grant
A federal grant for undergraduate students with exceptional financial need that does not have to be repaid, currently up to $7,395 per year.
Detailed Explanation
The Federal Pell Grant is the largest need-based grant program in the United States, serving roughly 6 million students annually. Unlike loans, Pell Grants do not need to be repaid, making them the most valuable form of student aid. Eligibility is determined by the Student Aid Index calculated from FAFSA data, the cost of attendance at the student's school, enrollment status (full-time or part-time), and whether the student attends for a full academic year. The maximum award for 2025-26 is $7,395. Students can receive Pell Grants for up to 12 semesters (roughly six years of full-time study). Under Year-Round Pell, eligible students can receive up to 150% of their scheduled award by attending summer sessions. Pell Grant amounts have not kept pace with tuition increases: in the 1970s, a maximum Pell Grant covered roughly 80% of costs at a public four-year institution, compared to approximately 30% today. The grant is automatically calculated when a student files the FAFSA.
Related Terms
FAFSA (Free Application for Federal Student Aid)
The form students must complete to determine eligibility for federal grants, work-study, and loans, as well as most state and institutional aid.
Expected Family Contribution (EFC) / Student Aid Index (SAI)
A number calculated from FAFSA data that estimates how much a family can afford to pay for college in a given year. Now called the Student Aid Index.
Need-Based Aid
Financial aid awarded based on a student's demonstrated financial need as determined by the FAFSA and/or CSS Profile, including grants, subsidized loans, and work-study.
Title IV
The section of the Higher Education Act that authorizes federal student financial aid programs, including Pell Grants, federal student loans, and work-study.
Frequently Asked Questions
What is pell grant?
A federal grant for undergraduate students with exceptional financial need that does not have to be repaid, currently up to $7,395 per year.
Why does pell grant matter for college ROI?
The Federal Pell Grant is the largest need-based grant program in the United States, serving roughly 6 million students annually. Unlike loans, Pell Grants do not need to be repaid, making them the most valuable form of student aid. Eligibility is determined by the Student Aid Index calculated from FAFSA data, the cost of attendance at the student's school, enrollment status (full-time or part-time), and whether the student attends for a full academic year.