The Pell Grant — America’s Largest Source of Student Aid

Last updated: June 22, 2014 by Dawn

With skyrocketing tuition, one major concern for students who want to pursue higher education is how to pay for it.

Not surprisingly, the burden is heaviest on lower-income families – particularly single mothers.

Few could afford the price tag without generous student aid that may come in the form of Pell grants and federally-subsidized student loans.

The Pell Grant program is the America’s largest student aid program.1 It provides grants of up to $5,645 to the nation neediest students to attend college.

This need-based grant offers one way for single mothers of limited means to “go back to school” and be re-educated. It is awarded based on one’s financial need & does not need to be repaid.

But how much you’re eligible to receive hinges upon 2 factors

  1. How much you’re expected pay out of your own pocket – taking into account your asset & income.
  2. The cost of attendance at your college – tuition, fees, room and board, books, etc.

Other factors that determine your Pell Grant eligibility include the amount of time you attend college (whether you are a full time or part time student) and the number of semesters you will attend.

How to apply for Pell Grant?

To be considered for a Pell Grant, you must submit a Free Application for Federal Student Aid (FAFSA) online at The deadline for filling the application form is June 30 each year.

The U.S. Department of Education uses a standard formula to evaluate the information you provide on your FAFSA. This formula produces a number called the Expected Family Contribution (EFC), which determines (if any) how much aid you’re eligible.

What it actually means is the lower your EPC, the more financial aid you’ll be awarded. The best case scenario is to get a Zero EFC for maximum aid eligibility. An EFC of $0 means that you have no ability to pay for college.2


for 2013-2014 academic year (July 1, 2013 to June 30, 2014)
  1. The maximum Pell Grant is $5645 — an increase of $95 from the maximum amount for the 2012-13 award year.
  2. If your family’s income is $24,000 or less, you automatically qualify for an Expected Family Contribution of zero and be eligible for maximum award.
  3. If your EFC is greater than $5081, you are NOT eligible for a Pell Grant.

Bottom Line

Although the Pell award isn’t exactly a princely sum, it does help many single moms who couldn’t otherwise afford the full cost of college continue their college education and open doors to more opportunities for better paying jobs.

However, as the cost of college outpacing the availability of aid, many are relying on federal loans to help pay their way through college, including very-low-rate Perkins and Subsidized Stafford loans, and unsubsidized Stafford loans. Unlike grants, loans are “borrowed money” you must repay with interest, albeit lower than most conventional loans.

Until the government could better package financial aid, borrowing money from the government to pay for college can be a sensible option; as long as you do it wisely.

  1. In 2011 alone, the U.S Dept of Education handed out 34.8 billion in Pell Grants. []
  2. Source: About FAFSA, What is Expected Family Contribution? []