According to FinAid.org, college tuition prices generally outpace inflation by twice the amount. The increasing costs of education correlate to more and more students applying for financial aid each year. The U.S. Department of Education provides the nation's most financially-needy students with tuition assistance each year, distributing awards based on economic need, rather than academic performance. Pell Grant amounts vary by year, and are distributed to students each semester, trimester or quarter.
When you file for a federal Pell Grant, the U.S. Department of Education will determine your award amount for the year. While you must apply for Pell Grants annually, you do not have to refile if your income changes. You must use information from the prior year's tax return to complete the application for student aid. If you wish to work toward an accelerated degree program, you may request up to two Pell Grants for one school year to help with additional credit hours during the summer and winter semesters.
If approved for a federal Pell Grant, you will receive your financial aid distributions according to the schedule of your selected college or university. Schools will receive the funds from the federal government, at which time they will credit your account for your outstanding tuition and other expenses. If you account is paid in full and there are funds left over, your school will dispense the remaining funds directly to you either by check or electronic funds transfer into your bank account. Your school must provide you with adequate notification of the amount of your disbursement, as well as when and where your check will be available.
Pell Grant awards vary by student, and the maximum award changes from year to year. The federal Pell Grant receives its funding via finances set aside each year in the congressional budget. The Pell Grant budget is subject to annual adjustment, and award amounts are directly affected by the amount of money available for student aid. For example, the maximum Pell award for both the 2010 - 2011 and 2011 - 2012 school years is $5,550, or $2,775 per semester. You should not expect your federal Pell Grant award amount to remain consistent from year to year. Additionally, if you qualify for the maximum Pell Grant and decide to attend school part-time, rather than full-time, your Pell Grant award amount will decrease according to the number of hours you complete for the semester.
To apply for the federal Pell Grant, you must complete the Free Application for Student Aid (FAFSA). It is important that you complete the application thoroughly and correctly, and as soon as possible. Failing to do so could result in a lower Pell award, as funds are disbursed on a first come, first served basis. The U.S. Department of Education will use information about your income, assets, household size and liabilities to determine your EFC, or estimated family contribution. Your EFC can range between 0 and 9999, and directly corresponds to the Pell sum you will receive. An EFC of 0 represents the most financially-needy students and results in the maximum Pell award available.