Understanding and Beginning the Federal Pell Grant Application?

Answer 1

For potential college students, the college financial aid process can seem daunting at first with its lengthy applications, unique acronyms, and important deadlines. The bulk of most students' financial aid comes from federal sources, and, thus, the federal government is the first place to start when applying for college funding.

Federal college funding typically falls into two categories, loans and grants. A federal loan is a source of government funding provided to college students in varying amounts; students do not have to repay the loan while attending college. Interest rates vary depending on the type of federal loan. Federal grants give college funding that does not have to be repaid.

The most common type of federal grant is the Federal Pell Grant, a need-based grant funded by the US Department of Education. Nearly $33 billion was awarded this year to 8.8 million people. In order to qualify for the Federal Pell Grant, a student must demonstrate financial need. The Department of Education uses a formula to determine need; the formula takes into consideration household size, the student's income and assets, parents' income and assets, and college costs.

A student's eligibility for the Federal Pell Grant is determined by information reported on the Free Application for Federal Student Aid or FAFSA, the official Federal Pell Grant Application. The FAFSA is an online form that is the first step towards obtaining federal funding, both loans and grants, and many colleges require completion of the FAFSA before any kind of funding is awarded.

Since the FAFSA is accepted by all colleges and universities, prospective college students can complete the application even before deciding on a college to attend. The FAFSA is typically available beginning in January for the upcoming academic year, which begins in the fall. Students are encouraged to complete the application as soon as possible, since funding runs out. Students even considering applying to college should begin completing the FAFSA at http://www.fafsa.ed.gov/ as soon as possible. When completing the FAFSA, it's helpful to have current year tax forms and bank statements on hand. Complete and accurate information, as well as applying early, will help to ensure the application is processed quickly.