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Pell Grant Increase 2023: What You Need to Know

It’s good news for low-income university students: Pell Grant recipients will receive an extra $500 as of 2023. This is after President Joe Biden signed the latest $1.7 trillion government spending bill into law. 

Although the allocation increases every year, the $500 increase is the largest Pell Grant boost in almost 15 years. Students will get $7,395 in 2023/24 as the maximum grant, up from the current $6,895.

Even so, not everyone will enjoy the full $7,395 award. Allocations vary with the cost of your program, part-time or full-time student status, and Expected Family Contribution (EFC). The EFC demonstrates your family’s capacity to finance your studies and usually depends on the household income, size, and the number of household members in college.  

Understanding the Pell Grant

Pell Grants are the largest undergraduate aid program from the Department of Education. Established in 1972, the Pell Grant borrows its name from Sen. Claiborne Pell who was the program’s chief sponsor.

Unlike student loans, the Pell Grant isn’t repayable and neither does it carry interest. However, beneficiaries might have to pay it back if:

Your school will inform you whether you should repay a portion of your grant. If you don’t do so within 45 days or make arrangements, you risk missing out on future student aid programs.

How to Apply

The process starts with completing the Free Application for Federal Student Aid (FAFSA). You should fill out the application throughout your college years to demonstrate eligibility for financial aid. Only students with exceptional financial needs qualify for Pell Grants. At the same time, applicants must not have attained a bachelor’s, professional, or graduate degree. However, students in post-baccalaureate teaching programs might be eligible.

Note that the FAFSA submission process could change in 2024. Besides reducing application questions, the government will change how they calculate student and family contributions, increasing allocations as a result.   

Is a $500 Increase Enough?

$500 might not do much around campus, but it still means a lot for low-income students. For example, you could use it for textbooks and similar supplies. According to the National Association of College Stores (NACS), the average course material spending for the 2021/22 academic year was $339. This $500 increment is also enough to cover on-campus parking permits. The Pell Grant doesn’t go as far as it used to years ago. In the ’70s, this allocation covered around 80% of student expenses. But by the 2022/23 academic year, students in four-year public colleges could only use this grant for 30% of their expenses.

While higher education organizations appreciate the $500 boost, they believe more can be done to take low-income students through college. The National College Attainment Network (NCAN), alongside 1200 other bodies, is pushing to double the current $7,395 maximum to $13,000. If successful, this move will restore the Pell Grant’s historical strength and cover half the cost of a bachelor’s program.        

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