Federal Pell Grant

Many students attending educational programs after graduation from high school do so because of the assistance of the federal Pell grant program. This program offers money for educational expenses to students who can document financial need.

The federal Pell grant program got started in 1965 as a part of the Higher Education Act of that year. The program, named after US Senator Claiborne Pell, was once called the Basic Educational Opportunity Grant program.

There was a time when a federal Pell grant covered about 60% of the cost of a year of post-secondary education. Post-secondary education is any educational program voluntarily entered into by a student who has completed public education requirements, such as graduation from high school or its equivalent.

There are several courses of post-secondary education a student can take and the federal Pell grant is open to students attending all sorts of educational programs as long as they are accredited by the appropriate governing body. Thus, the post-secondary education can be in the form of university or college enrollment as well vocational or technical school attendance.

The current demand for post-secondary forms of education has led to sharp increases in the cost of tuition and other related expenses but the limits placed on the federal Pell grant awards has remained relatively stable. Instead of covering the anticipated 60% of educational expenses, today’s Pell grant awards cover only about half that, or about one-third the cost of a year in the average college or university.

Educational budget cuts of $12.5 billion in 2006 have led to more competition among students applying for federal Pell grant awards, too. Critics to the program claim they penalize the wise long-term financial planning of a family who has managed to save or invest money over a long period of time but which earns, nevertheless, the amount of annual income that falls within Pell grant limits.

The maximum annual amount of educational assistance the federal Pell grant program can award to a student for the educational year 2007-2008 is $4,310, up from $4,050, the amount established in 2003. This amount is scheduled to raise gradually each school year until it reaches the current capped limit of $5,800 for the school year 2012.

Students who earn more money than the federal Pell grant program allows, or whose family earns more, can expect to receive an award of proportionally smaller increments.