The Pell Grant is the largest student aid program funded by the federal government. Nearly $4 billion a year is distributed under this federal program. For the academic year 1998-99, individual grants ranged up to $3000. The amount differs yearly depending on how much funding Congress gives the program.

Pell grants are awarded to students solely on the basis of need for the purpose of continuing studies following high school graduation. Pell grants are very desirable, as they are about the only outright gifts, with no strings attached, that one can receive from Uncle Sam. Also, Pell Grant awards are "student based," meaning the student receives the money directly or the school credits the award to the student's account.

In order to qualify for a Pell Grant, a student must be an undergraduate student without a bachelor's degree. You may attend school less than half-time, but your award will be less. Eligibility for a Pell Grant is determined by a standard formula developed by the U.S. Department of Education and passed into law by Congress. The formula, called the Pell Grant Methodology, produces a Pell Grant Index (PGI) number, formerly called Student Aid Index. Your Student Aid Report (SAR), the report you receive after you apply for federal aid, stows your PGI number. If you are using a form other than the federal AFSA form (such as the FFS car FAF form), you will need to check the box provided near the end of the form if you want to be considered for federal student aid.

The PGI number is very important in the financial aid analysis process. It is the number that tells whether you may be able to get a Pell Grant. If you are eligible for a Pell Grant, your school will use this number to determine the amount of your award. The formula used to determine the PGI is described in detail in a guidebook that is available by writing:

FORMULA BOOK (Pell Grant)

Department L-10,
Pueblo, CO 81009-0015.
Or call (888) 878-3256

The Student Aid Report also gives you your Expected Family Contribution (EFC) number, which is then used in determining eligibility for campus-based and Stafford Moan programs. This number is also used to determine the amount of your grant, loan, or work/study award. The higher the family contribution, the less likely a Pell Grant will be given, since it is a need-based program, the Purpose of which is to make sure that all eligible students have at least some of the money they need to continue their education. If a family contribution exceeds approximately $2,100, you probably won't qualify for a Pell Grant. However, logical or not, you won't be considered for other awards unless you have been turned down for a Pell. You can also calculate your Expected Family Contribution (EFC) online. Please read the disclaimer before you calculate your numbers.

If your SAR says you are eligible for a Pell Grant, it will have three parts (if you are not eligible, the SAR will have only two parts):

Part 1 is an Information Summary.

Part 2 is an Information Review Form, wt which is used to correct or change any information on the SAR that is incorrect.

Part 3 is the Pell Grant Payment Document to be used by your school.

If all the information on the SAR is correct, you need to sign it and send photocopies to the financial aid administrator of each school where an application is being made. (Once you decide on which school to attend, the financial aid administrator at that school will use the information the SAR to determine the amount of the Pell Grant award.)

An interesting fact is that about one third of the more than 5.5 million applications received for Pell Grants are returned for validation of information or for leaving out critical information necessary to complete the form. This occurs when the person analyzing the application suspects something "fishy," such as unsubstantiated statements that are essential to determining need. If you are selected by the Department of Education or your school for the "verification" process, you may be asked try prove information such as:

• Income.
• Federal income tax paid.
• Size of household.
• Number of family members enrolled in post-secondary education of least half-time.
• Certain untaxed income and benefits. Social Security benefits.
• Child support.

The financial aid administrator can require you to produce certain documents or other information, including a Verification Worksheet, a copy of the most recent signed U.S. income tax return (yours and/or your parents), W-2 Forms or statements from agencies such as the Social Security or Veterans Administration. If you don't provide the proof requested, you may not receive federal aid or aid from other sources.

It is important that every student considering financial aid apply for a Pell Grant, even if he/she believes he is going to be rejected. As mentioned above, these grants provide the foundation, the bottom layer upon which other forms of financial aid awards are based. The Pell Grant application is also a prerequisite for a Guaranteed Student Loan.