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Pell Grants Get Better

As discussed in the previous two blogs in this series, the Expected Family Contribution, or EFC, is being replaced with the term Student Aid Index, or SAI. With this change in terminology comes changes in application as well. Eligibility for the Federal Pell grant will largely depend on your SAI as well as your households adjusted gross income, or AGI. Now that most of the term definitions are out of the way, let’s dive into what is changing.


Eligibility Changes for the Better

Normally, you or your child’s eligibility will depend on the SAI. A student will be eligible for a Pell grant if the SAI is equal to or less than 90% of the maximum Pell grant. In practical terms, if the maximum Pell grant is $10,000, and your SAI (amount contributed from family) is $9,000 or under, you may be eligible.


However, the new formulas for calculating Pell grant eligibility and amount have been changed. Now, Pell will be calculated by using the family’s AGI and how it compares to the federal poverty level, considering the size of the family with the AGI.


For family’s that make less than 175% of the federal poverty line, the student(s) will receive the maximum Pell grant. Single parents also have been considered in the new changes. Single parents who make less than 225% of the poverty line will also receive the maximum award amount. To better understand the calculations, this is the current poverty line based on the number of persons or family in the household.


Photo- Office of The Assistant Secretary For Planning and Evaluation


How it Works

Using 2020 poverty lines for the continental U.S., a dependent student whose parent is a single parent will be eligible for the maximum Pell Grant if AGI is less than or equal to $38,790 if the student is an only child, with an additional $10,080 allowed in AGI for each sibling.

A dependent student whose parent is not a single parent will be eligible for the maximum Pell Grant if AGI is less than or equal to $38,010 if the student is an only child, with an additional $7,840 allowed in AGI for each sibling.


The AGI cutoff on eligibility for the Pell Grant is $56,030 for dependent students with single parents, plus $14,560 per sibling. For dependent students with two parents, the AGI cutoff $59,730 plus $12,320 per sibling.


Increase in Funding

The Pell grant award amount has increased as well with the new legislation. The new maximum is $6,495, which is $150 more than the 2020-21 school year.

It is important to note that all students that are eligible for the maximum Pell grant will have their student aid index set as zero. This simplifies the process by making it easier to discern eligibility.


Widening the Eligibility Pool

If the student is not eligible for a Pell Grant under the guidelines based on the poverty lines, then the student will be eligible for a minimum Pell Grant (10% of the maximum Pell Grant) if:

  • If the student is a dependent student, parent AGI is less than or equal to 325% of the poverty line for single parents, 275% of the poverty line otherwise.

  • If the student is an independent student, student AGI is less than or equal to 400% of the poverty line for students who are single parents, 350% of the poverty line for students who are parents but not a single parent, and 275% of the poverty line for students who are not parents.

Social Change

The most sweeping changes to the Pell are those centered around implementing social change. Pell grants will again be eligible to incarcerated students, giving a second chance opportunity to those imprisoned to gain employment after release. As well, those students who have been convicted of drug-related crimes will become eligible to receive Pell. With the signing of the Coronavirus Response and Relief Supplemental Appropriations Act in Dec, students who did not finish school due to school closures will again be eligible for Pell grants.


We Can Help With All the Changes

In total, the changes implemented in this legislation is expected to increase the amount of Pell grant recipients by 500,000, creating an ecosystem for more adults to be able to get an education without the insurmountable financial stress that goes along with paying for college. At Send Your Kids To College, we take a keen interest in helping students not to simply get to college, but to thrive in college—preparing them for a professional life afterward. If you need help with FAFSA forms, scholarships, grants, and all of the paperwork that goes into getting into a place of higher learning, we can help with everything college financial planning in Buffalo NY . You can stay up to date with all of the changes happening by reading our blog, or you can give us a call or leave your information here, and we can talk about what the next steps are to get your child prepared for the trail ahead.

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