Pell Grant

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The Pell Grant program is a type of post-secondary education [[federal Opportunity Grant program. They are awarded based on a "financial need" formula determined by the U.S. Congress using criteria submitted through the Free Application for Federal Student Aid (FAFSA).

The Pell Grant is covered by legislation titled the Higher Education Act of 1965, Title IV, Part A, Subpart 1; 20 U.S.C. 1070a.

Because of the high levels of need required to obtain a Pell grant, receipt of them is often used by researchers as a proxy for low-income student attendance.

Federal budget legislation passed in early 2006 cut the federal financial aid budget by $12.5 billion. While the maximum Pell Grant legislative limit was raised to $5,800 through 2011, maximum Pell grant awards were not funded at this level. The maximum award available to students has been frozen at $4,050 since 2003-04.

For 2006-07, the maximum Pell grant available to students remains $4,050. Due to high increases in the cost of post-secondary education and slow or no growth in the Pell grant program, the value of Pell grants has eroded significantly over time. In 2005-06, the maximum Pell grant covered one-third of the yearly cost of higher education at a public four-year institution; twenty years ago, it covered 60% of a student's cost of attendance, this however also allows a greater number of students to benefit. Grant award is effective on July 1, 2007. The 2008 maximum grant is $4,600, the largest increase in the program's 30 year history and increases to $5,400 by 2012.