Do You Have To Pay Back a Pell Grant?

You may need to repay it in some circumstances

Teenager review financial aid options for college.
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A Pell Grant is a federal grant given by the Department of Education to undergraduate students who have not yet earned a degree and exhibit “exceptional financial need.” Usually, the Department of Education awards a Pell Grant to a student pursuing a bachelor’s degree.

As a grant, it's not intended to be repaid. But there are certain instances in which you may be on the hook for repaying the money. Learn what a Pell Grant is, how it works, when you might need to pay one back.

Key Takeaways

  • A Pell Grant is usually "free money" that does not need to be repaid.
  • You may have to pay back at least part of the funds if you drop out, change your enrollment status, or receive other financial aid that lowers your need for the grant.
  • If you do have to repay, make sure you follow the repayment instructions so you can remain eligible for federal financial aid in the future.
  • You’ll need to fill out the FAFSA every year and make sufficient academic progress in order to keep receiving Pell Grant money.
  • If certain factors make you ineligible for a Pell Grant, consider other grant programs, as well as other types of financial aid.

How Pell Grants Work

To apply for a federal Pell Grant, you’ll need to fill out the Free Application for Federal Student Aid (FAFSA) form every year. Students who qualify may receive a maximum of $6,895 in Pell Grant funds for the 2022–2023 school year.

The amount you receive will depend on your expected family contribution (EFC), the cost of attendance for your specific program, whether you're a full-time or part-time student, and how much of the academic year you plan to attend school for.

The Department of Education calculates your EFC based on multiple factors, including:

  • Taxed and untaxed income
  • Government benefits, such as Social Security or unemployment
  • Assets
  • Family size
  • Number of family members who will attend college.

While it’s hard to predict how much Pell Grant money you could get before you apply, the Department of Education shows you on its website how much money you can expect if you qualify based on your EFC, the cost to attend the schools you list in your FAFSA, and how many classes you’ll take.

For example, if you qualify, you may be able to get $6,895 in Pell Grant funds for the 2022–2023 school year if your EFC is $0, you attend full-time, and your cost of attendance is $6,985 or more.

Note

You can't get a Pell Grant from more than one school at a time, and you're ineligible for any Pell Grant if you're incarcerated or subject to an involuntary civil commitment after being incarcerated for a sexual offense.

Why You Might Have To Pay Back a Pell Grant

The major benefit of a Pell Grant is that if you meet the requirements, you don’t need to repay it. However, you may have to repay the money if you:

  • Withdraw early from the school program the grant was given for
  • Change your enrollment status—for example, if you switch from full-time to part-time enrollment, you'll need to repay some of the grant money
  • Receive other federal aid or scholarships that reduce your need for the grant.

How To Repay a Pell Grant

If you're required to pay back a Pell Grant, your school will notify you. You'll have 45 days after that to make the repayment in full or enter what's known as a "satisfactory repayment arrangement." A satisfactory repayment arrangement may allow you to regain eligibility for federal student aid. It requires six consecutive, voluntary payments made on time and for the full amount due.

How To Keep a Pell Grant

If you haven't yet lost a Pell Grant, you’ll need to maintain the grant’s requirements in order to keep it. That means you’ll need to meet the income threshold, fill out the FAFSA every year, and make continuous progress toward your degree. 

Each school has its own policy about what constitutes satisfactory academic progress. But in general, it means you need to make sufficient grades and finish enough classes to keep moving forward with your degree.

Note

If your school decides you haven't made satisfactory academic progress to keep your federal student aid, you may be able to appeal it the decision, for instance, there's been a death in the family or you were seriously ill or injured.

You'll lose eligibility for more Pell Grants after you've earned a baccalaureate or your first professional degree, or have received a Pell Grant for 12 terms. You'll get a notice when you're getting close to using up the 12 terms.

Other Grants and Student Loans

While a Pell Grant is an excellent option to help fund your college education, there are other similar grants you could apply for if you don’t qualify

Beyond grants, there are other options to finance your education. You can take out federal student loans by filling out the FAFSA and apply for private student loans with various lenders. Though these have to be repaid, they can help cover the rising cost of college.

You also might consider a work-study program at your school, which can help offset the cost of attending college or help pay for extras like room and board, books, and dining plans.

Frequently Asked Questions (FAQs)

When will my Pell Grant be paid to me?

Usually, your school will disburse your grant money in at least two payments, which must be at least once per term. The school typically applies your money toward tuition, fees, and other school expenses. Then it will pay any leftover money directly to you.

What happens if I don't pay back Pell Grant money that I owe on time?

You have 45 days to pay back what you owe after your school tells you that you owe it. If you can't pay it back within that time, you'll need to try to work out a satisfactory repayment arrangement. The school may either have you pay it, or turn the debt over to the Department of Education, meaning you'll pay the department.

If you don't do either of the above, you'll lose your eligibility for more student aid.

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Sources
The Balance uses only high-quality sources, including peer-reviewed studies, to support the facts within our articles. Read our editorial process to learn more about how we fact-check and keep our content accurate, reliable, and trustworthy.
  1. Federal Student Aid. "Federal Pell Grant."

  2. Federal Student Aid. "Federal Grants Are Money To Help Pay for College or Career School."

  3. Federal Student Aid. "Wondering How the Amount of Your Federal Student Aid Is Determined?"

  4. Federal Pell Grant Program. "Payment Schedule for Determining Full-Time Scheduled Awards in the 2022-2023 Award Year," Page 4.

  5. Federal Student Aid. "Federal Pell Grants Are Usually Awarded Only to Undergraduate Students."

  6. Federal Student Aid. "If You Want To Keep Receiving Your Federal Student Aid, Make Sure You Stay Eligible."

  7. Federal Student Aid. "Receiving Financial Aid."

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