What is a Pell Grant and how do I apply?

A Pell Grant is a form of federal student aid primarily designed to help students with ‘exceptional financial need’ pay for undergraduate degrees. Unlike federal student loans, Pell Grant funds don’t have to be repaid if you complete your degree as a full-time student and don’t receive outside grants or scholarships that reduce your need for federal aid.

“Pell Grant funds can be spent on qualified educational expenses, such as tuition and fees, housing and food and books,” says Jack Wang, college financial aid advisor at Innovative Advisory Group and host of the Smart College Buyer podcast. Learning who qualifies for the Pell Grant and how to apply is critical if you’re a student who can demonstrate financial need.

Pell Grant updates with Trump’s budget reconciliation bill

Under Trump’s budget reconciliation bill, there are many changes to the Pell Grant to keep in mind. For starters, the bill adds an immediate $10.5 billion in Pell Grant funding for the 2026 school year. In addition, these changes will become effective July 1, 2026:

• Students who receive non-federal aid scholarships or grants that cover their total cost of attendance (COA) will no longer be eligible for Pell Grants.
• Students will be ineligible if their SAI equals or surpasses twice the amount of the award — the threshold for 2026-27 is $14,790.
• Expands eligibility to students in short-term, accredited workforce training programs called the Workforce Pell, including students who already have a bachelor’s degree who otherwise would not be eligible for a Pell Grant.
• The budget reconciliation bill will reinstate the exemption of assets from family farms and small businesses starting. Plus, for the first time, family-owned commercial fisheries will be considered an exempt asset.
• Previously exempt foreign income will be included when assessing a student’s adjusted gross income (AGI).

“One other change from EFC to SAI was the inclusion of the value of family-owned businesses and farms,” Wang says. “This has since been changed back by the One Big Beautiful Bill, so that family-owned farms, on which the family resides, and family-owned businesses (subject to limits) are not counted as assets.”

How much money can I get from the Pell Grant?

For the 2025-26 school year, the U.S. Department of Education has set the maximum Pell Grant award amount at $7,395. The minimum Pell Grant award is $740. How much you could get in Pell Grant funding depends on various factors.

• SAI. Your SAI is subtracted from the annual Pell Grant amount when calculating how much grant funding you could receive.

• Cost of attendance. Another factor your school’s financial aid offices consider when calculating your Pell Grant offer is your total cost of attendance.

• Full-time or part-time status. To receive the full Pell Grant award you qualify for, you must be enrolled as a full-time student.

You can only receive Pell Grant funding for 12 terms, which translates to six years. Over the course of those six years, the Lifetime Eligibility Usage (LEU) is tracked. once you reach 600 percent of your LEU, you can no longer receive Pell Grant funding.

“Generally speaking, if a student attends and graduates within four years, [LEU] isn’t an issue,” Wang says. “However, if a student takes longer than four years, or takes time off and returns to school years later, or other circumstances that extend time to graduation, then LEU may become an issue.”

2025-26 FAFSA income limits

Your family’s size and income also play a role in whether you qualify.

Source: College Money Method

2026-27 FAFSA income limits

Source: College Money Method

Pell Grant eligibility requirements

Pell Grants are available to many students, but there are certain requirements that you will have to meet in order to be considered eligible. In order to receive a Pell Grant, you must:

• Have a high school diploma or GED.
• Be enrolled or accepted to enroll in an approved program.
• Have a valid Social Security number.
• Complete the Free Application for Federal Student Aid.
• Maintain satisfactory status in your schooling.
• Be pursuing an undergraduate degree, with some exceptions.
• Have not earned a bachelor’s, graduate or professional degree.

Additionally, you will need to meet at least one of the following criteria:

• Be a U.S. citizen or U.S. national.
• Have a green card.
• Have an Arrival-Departure Record (I-94).
• Have battered immigrant status.
• Have a T-Visa.

As of 2025, the following types of students may also qualify for Pell Grants:

• Students unable to complete studies due to a school closing may have a part of their Pell Grant LEU restored.
• Students who are incarcerated and enrolled in an approved Prison Education Program.

Because these grants are geared toward students with exceptional financial needs, low-income families will most likely qualify for the maximum award amount. Other factors, like the school’s COA, also affect eligibility.

How do I apply for a Pell Grant?

You’ll start by filling out the Free Application for Federal Student Aid. The application process is relatively simple and requires submitting your parents’ financial information or your income if you support yourself. You must create a Federal Student Aid identification and login to submit your FAFSA. Once you create your account, enter and submit the necessary information.

The FAFSA must be completed yearly to maintain eligibility for Pell Grants and other financial aid. The application typically opens each year on Oct. 1 for the upcoming academic year. Apply as soon as possible to get your best shot at receiving aid.

If you qualify, your school will typically first apply your Pell Grant funds to your college expenses. In other cases, you might also be paid directly. Check with your school to confirm how they handle student aid payments so there are no surprises on your first day of class.

Frequently asked questions

• How do I check my Pell Grant status?

  After filling out the FAFSA, you can check the status of your application by logging into your account on the Federal Student Aid website or by calling your school’s financial aid office after you fill out the FAFSA.

• What can I spend my Pell Grant on?

  Pell Grant funds can be used to cover most higher education expenses, including tuition and fees for school, books, technology expenses, transportation to and from school and supplies. You cannot use the funds to finance your education at more than one school at a time.

• Do I have to pay taxes on Pell Grant money I receive?

  Money received through a Pell Grant is tax-free, provided you use the funds for eligible educational expenses. The Internal Revenue Service (IRS) states that you must keep track of Pell Grant money spent on incidental purchases (room and board, optional equipment, etc.) and include them in your gross income for tax purposes.

• How do I maintain my grant?

  To be eligible for the award each academic year, you must fill out the FAFSA every year you pursue an undergraduate degree for up to 12 school terms and prove financial need.

• Can I still receive a Pell Grant as a part-time student?

  Yes, you can receive Pell Grant funds as a part-time student, but the award amount may be lower than if you attend full-time.