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What are Pell Grants?

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  • Written By: Brendan McGuigan
  • Edited By: Bronwyn Harris
  • Last Modified Date: 05 November 2016
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Pell Grants are federal grants giving by the U.S. Department of Education to help students attend college. They are full grants, requiring absolutely no repayment, and are awarded solely based on financial need. The need criteria for Pell Grants is based on a formula dictated by the U.S. Congress, and is determined by information submitted by applicants or a proxy, usually their parent, via the Federal Application For Student Aid (FAFSA).

In 1973, after a few years of agitation, Rhode Island Senator Claiborne Pell helped pass a bill introducing assistance for education. A Democrat who had arrived in office in 1960, after years of service during World War II, and years on reserve following, Pell believed strongly in the value of education. The Pell Grants, originally known as Basic Educational Opportunity Grants, were largely intended to help prisoners attend college on being released from prison. Pell Grants were thus seen as a way of helping to reduce prisoners returning to prison, by giving them a strong helping hand on their release, to help pull them from a life of crime. In addition to the Pell Grants, Pell also sponsored the bill that created both the National Endowment for the Humanities and the National Endowment for the Arts.

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Historically, Pell Grants covered a significant percentage of the total tuition to a private college, allowing students of limited means to attend without going deeply into debt. Over time, however, as the cost of education has increased drastically and the amount awarded by Pell Grants has increased only slightly, the relative value of Pell Grants has been significantly diminished. While once students in great need could plan on paying for most or all of their education with a Grant, virtually all students with need now must take out either substantial student loans, or else win many additional awards.

In 2009, the American Recovery and Reinvestment Act set the limit on how much money a Pell Grant could award at $4,860 US Dollars (USD) for the 2009-2010 season. With tuitions at many private schools in excess of $40,000 USD, and even many private schools reaching more than $10,000 USD, Pell Grants no longer make anywhere near the difference they once did. Nonetheless, for many people being able to receive a Pell Grant is a welcome boost, and eliminates at least some amount of potential debt.

Receiving Pell Grants requires that the student be in serious economic need. This is determined by looking at the Expected Family Contribution, which is figured out by looking at the data given in the Federal Application For Student Aid. Students whose families are deemed unable to contribute more than a certain amount may be offered Pell Grants, as well as other government assistance, such as government-subsidized loans.

More than half of the families that receive Pell Grants have a combined income of less than $20,000 USD. Because of the consistently low income levels of recipients, many sociologists use receipt of a Pell Grant as a measure of poverty. This can be used by researchers looking at economic diversity at a university, as by simply seeing how many students received Pell Grants, especially grants for the maximum amount, they can determine what percentage of the student body is likely from an impoverished family.

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