- President Joe Biden announced a plan to forgive or reduce student debt for borrowers across the country.
- People who received Pell Grants are eligible for $20,000 in federal student debt forgiveness.
- But what is a Pell Grant? Do they have to be repaid? Here’s what to know.
President Joe Biden on Wednesday announced his plan to forgive or reduce student debt for millions of borrowers.
Though the Biden administration had previously agreed to wipe student debt for certain borrowers, the president this week said people who earn less than $125,000 annually are eligible to receive cancellation of up to $10,000 in federal student loans. People who received Pell Grants may have $20,000 forgiven.
Students at educational institutions across the country receive Pell Grants. People who have received Pell Grants make up over 60% of the “borrower population,” the White House said. And more than 70% of students at historically Black colleges and universities are federal Pell Grant-eligible, according to the United Negro College Fund.
But what is a Pell Grant? Who receives them? Here’s what you need to know.
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What is a Pell Grant?
A federal Pell Grant is money awarded to students who “display exceptional financial need,” according to the Department of Education.
The maximum federal Pell Grant award for the 2022-2023 award year, which stretches from July 1, 2022, to June 30, 2023, is $6,895.
The amount a recipient can get depends on a few factors, including:
- Expected family contribution, which is calculated by the information a student and their family reports on their Free Application for Federal Student Aid (FAFSA) forms.
- The cost of attendance, as determined by an educational institution for a student’s program.
- A person’s status as a full-time or part-time student.
- A person’s plans to attend school for a full academic year, or for less time.
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Who qualifies for Pell Grants?
Beyond going to students who show financial need, federal Pell Grants are usually awarded to undergraduate students who have not earned a bachelor’s degree, a graduate degree or other professional degrees. But some students in postbaccalaureate teacher certification programs can receive federal Pell Grants, according to the Department of Education.
There are additional circumstances that may mean a person is eligible for federal Pell Grant funds. For example, if their parent or guardian was a member of the U.S. armed forces and died “as a result of military service performed in Iraq or Afghanistan after the events of 9/11,” in addition to other stipulations.
Many Pell Grant recipients come from families that made less than $60,00