There are three basic types of student financial aid: scholarships, loans and grants. Scholarships are financial awards usually based on academic or athletic ability, or some other distinguishing characteristic. They are awarded by universities and private organizations, and generally must be competed for. Loans can come from multiple sources, but must be repaid after college. There are a number of financial institutions that offer loans for students. Grants are similar to scholarships in that they do not need to be repaid. Grants come from federal or state governments, and are often awarded on the basis of financial need.
The Pell grant is one such federal grant. Eligibility is determined on a case-by-case basis. There are a number of initial requirements: students must be a United States citizens; the Pell grant is generally given to undergraduates (there are other programs for graduate students); students must also be attending an eligible school; and students' family finances are a large factor in eligibility, with an upper limit placed at an annual income of $55,000 a year. However, most Pell grants go to students from families making less than $20,000 a year.
Nearly 5.5 million students receive assistance from Pell grants each year. As a need-based grant, it is scaled to cover each student's particular financial shortcomings. The cost of the university or college the student will attend is therefore part of the calculation of how much will be awarded. So, too, is the size of the student's family--in other words, how many members of the family are being supported by the yearly income. Of course, the family's own finances also factor into the amount given. Also considered when awarding a Pell grant is whether the student will be a full- or part-time student.
The Pell grant is not designed to completely pay for a student's college education. It is instead meant to serve as a foundation upon which other financial aid can be added. As such, it is relatively small compared to the overall cost of a a university education. Average grants are in the range of $2,400 per student, with the broader range of awards between $500 to nearly $5,000. However, this amount, if awarded, will lesson the amount of loans or other financial aid that a student might need. Because it is a grant, it does not need to be repaid, which helps lessen any future financial burden that might be accrued through loans or other financial aid that must be repaid after graduation.
Anyone looking to enter an undergraduate program after having graduated from high school or a vocational school is eligible to receive a Pell grant. Additionally, the grant may be applied for at any time during a student's undergraduate career. Thus, if a student's financial situation changes midway through their college education, they can still apply for a Pell grant to help with the financing. The grant is generally awarded at the beginning of the academic year, so the application must be filed in time to meet the federal deadline of June 30. Other state and individual college deadlines may also apply.