As you probably already know the Pell Grant is a federal grant that is awarded on an annual basis to undergraduate students from across the country who demonstrate a high financial need. That being said, it is important to understand that the Pell Grant is continuing to evolve as a financial aid instrument, and over the next few years a variety of major changes are going to affect the Pell Grant in a big way. The award was already scheduled to expand for the 2010, 2011, and 2012 school years, but now that president Obama has come into office the entire Pell Grant program is going to undergo a period of growth that was unprecedented throughout its history.
The Student Aid and Fiscal Responsibility Act
President Obama has initiated a plan to insert roughly thirty-five billion dollars into the Pell Grant program over the next ten years. This will be a ninety-two percent increase from the previous year, and it would make the award available to more than one million additional students from across the country.
The maximum Pell Grant amount would be expanded to 5,550 dollars for the 2010-11 school year, and the amounts students would be able to receive across the board would increase. This expansion will take effect via the passing of the Student Aid and Fiscal Responsibility Act, or SAFRA, which is currently part of the health reform bill that is in Congress.
Beginning in 2013-14 the maximum Pell Grant amount will increase each year according to the Consumer Price Index + 1%. This provision was implemented to combat inflation, and while many critics have argued that this annual increase isn’t nearly enough, it will significantly expand the amount of financial aid that can be accessed via the Pell Grant. SAFRA will also increase the reach of the Pell Grant program by changing the maximum cutoff EFC threshold from 4,617, to 5,273.
Changes to Eligibility
This increase will make the Pell Grant available to more students than ever before, and if you were treading the line in terms of eligibility before the enactment of SAFRA, you now may be able to qualify for the award. The key is knowing what your EFC value is for any particular award year, and you can do so by reviewing your SAR, or Student Aid Report upon completing the FAFSA. The SAR is the report that is generated once you have successfully submitted a FAFSA, and it should explicitly reveal your EFC, and your eligibility for several kinds of federal student aid, including the Pell Grant.
If your EFC is below 5,273 then you should become eligible for the Pell Grant as long as you are able to satisfy the other Pell Grant qualifications and federal student aid eligibility requirements that are in place.
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