When discussing financial aid, Pell Grants are an important component of the conversation. Pell Grants have been around since the ‘70s, and give financial aid grants to undergraduate students of low-income families.

There have been many changes to Pell Grants since their establishment, meaning changes for how students are awarded and use these grants. This article will walk you through the history of Pell Grants, what the changes are, and how to apply for and use the grant.

How to Apply

This is probably the most simple aspect of Pell Grants. When you apply for financial aid through the FAFSA, you have automatically applied for a Pell Grant–there’s no secondary document! You can apply for the FAFSA here.

See also: What the eff is the FAFSA?

“Students generally only need to do the FAFSA application and possibly verification if they’re selected, but they don’t tend to have to do much more,” said Elaine Rubin, Senior Contributor and Communications Specialist for Edvisors.

And…that’s it. Lou Melucci, Associate Director of Financial Aid at the University of Colorado, Boulder, said the only slight barrier students tend to face is in that verification process as it can be time consuming for the student to find the correct documents.

“[Verification] is probably the most time consuming process where you have to track down your tax return transcripts possibly from the IRS. So we do see that when students are asked to turn in something like a tax return transcript, that does slow down the process of getting the file complete,” said Melucci.

However, the more complicated aspects of the Pell Grant are in regard to the changes it has undergone over the years. Understanding these changes will allow you to use the Pell Grant effectively should you be eligible to receive it.

History of Pell Grants

The Pell Grant was established in 1972 under the Higher Education Act (HEA). Pell Grants were part of the reform of the former HEA programs. Pell Grants were intended to be the foundation of financial aid programs, with additional aid being given as needed and available. Since 1972, aspects of the Pell Grant and HEA have been changed under reauthorization processes that occur every five to six years as Congress evaluates the current programs. Additionally, Congress evaluates the budget for Pell Grants every year and may adjust it according to current tuition prices or other factors.

One of the major changes to the Pell Grant regards funding for prisoners. The grant originally was originally given to low-income individuals attempting to gain a college education, including prisoners. However, in 1994, funding was revoked from “any individual who is incarcerated in any federal or state penal institution.” There has been a push to reinstate this in recent years, and in 2015, the Second Chance Pell Pilot Program was announced, which opened limited aid to prisoners seeking post-secondary education.

Other changes are fairly recent, many occuring in 2011 under budget changes. These Pell Grant changes included a new, higher maximum level of grant money, which is now $6,095 for the 2018-2019 school year for individual students in the lowest income bracket. But, there is also a new lifetime maximum eligibility limit and new eligibility rules.

Most recently in 2017, year-round Pell Grants became available to students so they may take classes year round and finish their degree in a more flexible, and potentially shorter, time frame. This is a potential benefit for non-traditional students who may study year-round. However, this is not a new concept, as the availability of year-round Pell Grants has gone back and forth over the years.

The Pell Grant today

What do these changes mean? Rubin says that the Pell Grant is still very beneficial for people who qualify, but the total amount one can use is now more restricted.

“It just isn’t as available as it was before. There is a maximum amount a student can receive in their lifetime. But, it’s meant for a student to earn up to a bachelor’s degree, and it is a great option for a student who has financial need,” said Rubin.

In the case of the lifetime maximum, students may only receive the Pell Grant for 12 semesters, which is approximately six years. While a student who immediately begins an undergraduate degree program upon receiving the Pell Grant may not have a problem with this, Rubin explained why students may hit the lifetime maximum.

“It tends to be someone who hasn’t quite figured out where they want to be and what level of education they would like to achieve,” said Rubin, who gave the example of a student who first gets an associate’s degree, and then decides to continue their education into a certification or bachelor’s degree program. Other students that run into problems with the lifetime maximum may be “students who have to repeat coursework a lot or who are in a program that is stretched out and takes a significant amount of time.”

As for the year-round aspect of recent Pell Grant changes, this should be evaluated on a student-to-student basis, as more of the grant is awarded to the student, but this shortens the student’s lifetime maximum. Often, it is beneficial to students who are taking summer courses as they may finish their degree sooner.

“We were really excited about the year-round Pell because that helps students progress through their degree faster and it’s a tool that you can use to go to the summer semester. So we love it because we try to use a lot of our institutional grants for the fall and the spring, reason why, we don’t know who is going to come for the summer. So now that Pell is a tool that can be used for the summer I think it’s helping students get that degree even faster,” said Melucci.

However, students who are moving through their degree slower may want to take a different route. Summer courses are typically shorter and therefore cheaper than other semesters, so using the grant for these courses may not always be the best option for students.

“If [a student is] going to be in school for a little longer than four years, maybe it’s worth it to keep the Pell for some of the more expensive periods of enrollment, and not use up their lifetime eligibility for periods that could be covered with other funds or maybe for something they could even pay out of pocket,” said Rubin.

When it comes to the year-round aspect of the Pell Grant, talk with your financial aid adviser at your school to walk through maximum eligibility and your academic plan to use the grant strategically.

“The bottom line with Pell is always work with your financial aid office, understand what you are doing in accepting and have a conversation with them if they think it’s appropriate for you to utilize any of your lifetime Pell eligibility for certain periods of time especially for some of those summer semesters,” said Rubin.

Post-secondary education usually costs much more than a Pell Grant can award to a student. Luckily, many individual universities award more money and scholarships to Pell Grant recipients. Melucci explained that CU Boulder has a process in place for this and may, in certain cases, even cover all of a student’s tuition and fees.

“A Pell Grant recipient is usually the most needy student at the university. So, beyond that federal grant, we do try to support that student with our own institutional grant money. We can award the student more in university grant money than the Pell Grant,” said Melucci.

Pell Grants are fairly straightforward in their application and use. Much of the work is on the administrative end, and isn’t up to the student. However, make sure you understand the current options and restrictions to the Pell Grant to best use your grant.