Attending college involves numerous costs, including tuition, books, student fees, housing and other expenses. To offset financial burdens, college students can complete the Free Application for Federal Student Aid, or FAFSA. Special formulas calculate your ability to contribute financially to college costs, and applicants may receive a bundled award incorporating loans, grants and work-study opportunities. The Pell Grant is one type of grant, which doesn’t have to repaid, offered by the government. Determine the difference between the dispersible amount and the award amount to budget for your academic year.

Pell Grant

Grants from the Federal Pell Grant Program are need-based; low-income undergraduate and some graduate students can apply for these loans using the FAFSA. College costs at about 5,400 schools in the United States may be covered. Factors used in Pell Grant determination include a student’s FAFSA-determined financial contribution to education costs, the cost of attending a particular school, enrollment status (full-time students receive more than part-time ones) and whether the student will be attending school throughout the academic year.

Award Amounts

The award amount for Pell Grants is the entire sum of money that students receive for an academic year. For example, the maximum award amount for the 2011-12 school year is $5,550. This award amount diminishes if a student is enrolled less than full time. For example, a student might receive $2,081.50 for each semester in 2010 if attending three-fourths of the school year; a half-time student might receive $1,387.50 each semester. The award amount is also smaller if the FAFSA determines they are financially able to contribute their own funds toward college costs. For example, a full-time student determined to contribute $1,000 of savings toward college costs might receive $2,300 each semester instead of $2,775.

Dispersing Grants

Schools can disburse Pell Grants to students in different ways, depending on school rules and student preference. The dispersible amount of the Pell Grant can differ from the total award amount because schools can deduct the cost of tuition, fees, room and board (without the student’s permission) before dispersing the remainder to the student. With the student's permission, schools can further deduct other expenses (for example, parking or optional activity fees) from the grant total before dispersing to students. Dispersal can happen in several ways. Some students sign up for direct deposit so that funds are deposited into their bank account. Other students prefer to receive a check in the mail or retrieve checks in person at the campus financial aid office.


Mistakes do happen, so carefully track your Pell Grant's progress through the school’s accounting office. You should receive an itemized receipt for deductions made from your grant award amount; if these are incorrect, contact your school’s financial aid office. Also, Pell Grants must be used for their intended purpose. If you withdraw from classes or drop below the attendance status indicated on your FAFSA, you must return the remaining funds immediately.

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