Pell Grant Income Limits

VD September 09 2021

Have you ever thought, why is the overall literacy rate in the US much higher than a majority of the other countries? And literacy rate doesn’t mean individuals who can write their name but individuals who have a college or high school degree.

From the day the United States got its freedom to this very day, the US is one of the only countries that spend 10.43 trillion USD just for the year 2021 on the education budget. All of this amount is equally distributed and channeled through various grants and scholarships. 

What is a Pell Grant, and what are Pell Grant income limits?

Among all of these grants, there’s one grant that outshines all others by a wide margin. Yes, the federally administered Pell Grant. Named after the prominent US Democratic Senator Claiborne Pell, the Pell Grant came into existence as part of the 1965 Education Act.

An important thing to understand here is that Pell Grant isn’t like a standard loan. It does come with certain Pell Grant Income Limits, but you are legally allowed to spend the Pell Grant amount on things other than education-related.

Plus, as it is a federally administered grant, you do not need to return the money you have received as a Pell Grant beneficiary. That’s why the Pell Grant beneficiaries belong to families with an annual income lower than US$50,000. But the final approval is mostly given to the candidates with an annual family income for Pell grant of US$20,000 USD or less.

But what is the maximum amount of income for Pell Grant eligibility? As said before, Pell Grant isn’t like a standard loan. The board reviews every application and eligibility of the candidate. If everything falls in line, the grant will be approved with an amount that will be sufficient to cover all the mentioned expenses of the candidate.

Pell Grant Income Limits: A Detailed Note

Pell Grant is known for not allocating a fixed amount of grants for all eligible applicants. Instead, the Pell Grant income requirements vary from year to year, depending on the estimated amount required by the candidate. 

But there are some general categories and maximum/minimum limits set by the federal authority regarding the Pell Grant. These categories are,

  • If the annual gross income of your family is around $26,000 or less, and your school/college fees are more than $6,195 per annum, you are eligible for the maximum Pell Grant income for the respective year.
  • If the annual gross income of your family is around $36,000, and the annual school/college cost is around $6,195 per annum, you will get a considerable amount of Pell Grant income.
  • If the annual gross income of your family is around $40,000 – $60,000, with the annual school/college fees around $6,195, you are hardly going to get a quarter of the maximum Pell Grant income for the respective year.
  • With an annual family gross income of more than $60,000, you are not eligible to get any Pell Grant money.


What about using Pell Grant Income for stuff other than education?

By far, this is one of the most debated topics among the students eligible for a Pell Grant and who will get a considerable grant income, keeping in mind the trends of Pell Grant Income Limits for the respective year.

Remember, Pell Grant is a federally administered program. In other words, you don’t need to return the money to the federal authority anytime in the future. This makes you completely free to use the money as part of your income. But there are certain limitations associated with using the leftover Pell Grant for personal use.

For example, a person gets a Pell Grant of $6,000 for the current year. Let’s say the college semester fee is around $2,000. As a result, the person will pay $4,000 this year as part of their college education fees. 

Now the question is, what about the remaining $2,000? According to Pell Grant rules and regulations, you can legally use this remaining amount for expenses other than educational, but with one condition. This remaining amount will be mentioned on your tax returns as part of your income, and so does everything you purchase using this money.

How the Pell Grant amount is calculated?

As a federally administered grant, the competent authority pays special attention to review and calculate the required Pell Grant amount for each eligible applicant. The authority also needs to consider the overall Pell Grant Income Limits for the respective year as well.

First, the authority calculates you and your family’s annual gross income and factors that extract the majority of this gross income. This calculated amount is labeled as the family’s Expected Family Contribution (EFC). 

Your family’s income includes your parents’ income, your income if you work, your spouse’s income, and any possible assets you have. On the other hand, the family’s expenses include factors like the number of people in your family, the number of people getting a college degree at the moment, your current education status, and finally the per annum cost of attending your preferred school or college.

The amount of EFC is then subtracted from the calculated amount of COA, which includes the expected tuition fees, living expenses, miscellaneous expenses associated with every student, etc. The amount left behind after subtracting the EFC and the COA is what you will get as the Pell Grant income.

Besides financial status, what are the Pell Grant eligibility criteria?

You already have an idea about how your financial status can influence the Pell Grant Income Limits in your case. But besides the financial status, certain other eligibility checkpoints must be marked ‘Yes’ to become fully eligible for a federally administered Pell Grant.

These eligibility checkpoints are:

  • The applicant must be a US citizen or a foreign falling under the eligible visa.
  • Must have a High School Diploma or equivalent qualification.
  • Before applying for a Pell Grant, the applicant must be enrolled as a full-time student in a degree-granting program (Undergraduate Program).
  • Must not be marked for any non-forcible or forcible sexual assault offense.
  •  Must not be a federal student loan defaulter.
  • Haven’t got an undergraduate or any other professional/graduate-level degree yet.

Besides these, the Pell Grant has a special policy for children of US Heroes who died in the line of duty. The eligible applicants with such heritage can get higher Pell Grant amounts as well.