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How Public Grants Work


Federal Grants and the FAFSA
The late Senator Claiborne Pell, for whom the Pell grant was named, helped millions of students afford a college education.
The late Senator Claiborne Pell, for whom the Pell grant was named, helped millions of students afford a college education.
AP Photo/Joe Giblin

To apply for a federal grant, students need to complete the Free Application for Federal Student Aid (FAFSA). The FAFSA helps administrators assess students' financial need and eligibility. Students will need to divulge many facts about themselves, including:

  • Citizenship status
  • Marital status
  • Parents' education history
  • One parent's date of birth and social security number
  • Any drug convictions
  • Student dependency status
  • The family's latest income tax return
  • Family income estimation

The federal government expects the applicant's family to contribute to educational costs, too. The common term for this is the Expected Family Contribution (EFC). Most federal grants are meant for students who have a greater financial need and might otherwise not be able to afford to go to school. As a result, a student from a family making income above the cutoff isn't eligible no matter what that student's academic performance might be.

The Federal Pell Grant is one of the better-known grants available to students in the United States. Undergraduate students from low-income families are eligible for the Pell Grant as long as the student doesn't already have a bachelor's degree. In 2010, the maximum amount the government could grant a student under the Pell Grant was $5,500 [source: Federal Student Aid]. Congress determines the maximum payment -- the amount can change over time.

The federal government offers other grants in addition to the Pell Grant. Some, like the Federal Supplemental Educational Opportunity Grant, require the student to qualify for the Pell Grant first. Others, like the Teacher Education Assistance for College and Higher Education (TEACH), are meant for students with specific majors or career paths.

In all cases, federal grants come from a limited pool of resources. Once that money is gone, even an eligible student won't be able to secure a grant until Congress replenishes the grant budget.


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