Should I pay back my Pell Grants?

Should you pay back your pell grants? Here is an article to help you with pell grants, the pros, cons, and more.

Updated by TCM Staff on 16th October 2020

Answering the question 'Should I Pay Back My Grants?

Well, it's a NO.

Pell grants are financial rewards given to students pursuing an undergraduate program after demonstrating their exceptional needs. This is completely different from student loans and you don't have to repay them except for certain conditions. Only those who fail to complete their academics for which the grant was awarded must pay some portion.

Here are some of the reasons which may need you to pay back your Pell Grants.

Do I need to pay back my Pell Grant?

Not under all cases, you should back your grant. Here are the cases that make you ineligible for the grant obtained and you should pay the grant back.

1. Withdrawing from the program

If you have received the grant based on the program you took in your college, you must pay back the grant if you have withdrawn or changed the program. But you don't need to pay the full amount back. You are required to pay half of the unused money. 

    For Example, If Summit receives $800 as Pell Grant for Science program and due to some circumstances he quits the semester mid-way or completed 50%. So now the unused money he has is $400. He must repay half of this amount. That is, he must pay back $200 to the Federal Government.

But, If you change the program after completing the semester for more than 60%, then you don't require to repay it.

2. When you become 'Pell-Overpayment'

Changing your enrollment status like the time you spend in college from full-time to half-time makes your fees lesser. Now you will have some excess Grants, If you did not pay back the excess money then you are categorized as 'Pell-overpayment' and will not receive any further Federal financial aids. So before changing any categories consult your management or the federal aid administrator.

You may also read - Part-time vs full-time student

3. Excessive Financial aids

This is a rare case to occur. If you receive financial aids which includes your: Pell Grants, scholarships, and other financial assistance by institutions and receive money $300 more than your cost of attendance or your tuition fee, your Pell Grants get canceled and you need to repay the money offered. If you receive other scholarships and aids make sure that the money you receive overall is within this limit. Also, consult your college administrator if you get excessive financing.

                                  excess money from financial aid

4. Inability to maintain grant requirements 

In order to remain qualified for the Pell Grant, the student is required to maintain the requirements stipulated by the norms of the grant. This includes meeting the income threshold, maintaining good academic progress, and filling out the FAFSA. Failure of any of these would result in ineligibility and revocation of the grant. 

Ineligibility for Pell Grants can also be induced if- 

  • The family size doesn’t qualify

  • The student is incarcerated in a federal or state institution

  • The student has received the grant for six years.

  • The student is convicted of a drug-related offense while receiving financial aid 

  • The student has a criminal history

  • The student is convicted of a sexual offense

  • The parents/ guardian has a good income

What is the Pell Grant?

Pell Grant is a need-based financial aid provided to pursue the first bachelor's degree or the students who are enrolled in certain post-baccalaureate programs by the U.S federal government.

Using Free Application for Federal Student Aid (FAFSA) the government calculates the family's Expected Family Contribution (EFC) and decides the amount of Pell Grant to be provided.

All the students who received this financial aid for their college expenses in the form of Pell grants have one question in common: Should I pay my pell grants back? If you are one among them? Feel lucky you have landed at the right place.

In this article, we will see whether to pay the pell grant back. If so, under what conditions and how to tackle them.

How do Pell Grants work?

The first step in the application for a Federal Pell Grant is to fill out the Free Application for Federal Student Aid(FAFSA) form. The qualifying students are awarded a maximum of $6,345 (for the 2020-2021 academic year).

The amount you receive will depend on the following -

  • Estimated family contribution (“EFC”)

  • The cost of attendance for your specific program

  • Type of enrollment- full time/ part-time

  • Tenure of your enrollment - Full-year or less

The Department of Education considers the following while calculating the EFC:

  • Taxed and untaxed income

  • Number of family members who will attend college

  • Benefits

  • Size of family

  • Assets 

  • Cost of attendance

The amount of Pell Grant awarded is difficult to predict prior to the FAFSA application. However, you can visit the official website of the Department of Education to educate on the approximate amount you can expect if you qualify for the Pell Grant. This approximation is estimated considering the EFC and the cost of attendance of the different schools, simultaneously entailing the number of classes you can enroll in. 

For example, you may qualify for a Pell Grant award of $5,895 for the 2020-2021 academic year with the following data -





What are the pros and cons of Pell Grants?

Like the two sides of the coin, Federal Pell Grants carry its own share of pros and cons. It is pivotal to scrutinize through each of these to have a clear understanding of the different aspects. Acknowledgment of the boons and banes can also be instrumental in weighing down the different options for federal financial aid, primarily because of the plethora of financial aid opportunities bestowed by the U.S Government.  Some of the pros and cons of the Federal Pell Grants are - 


  • Pell Grants have no repayment clause, unless in the most unsolicited circumstances 

  • It is a haven for students with substantial financial need 


  • Awardees need to maintain stipulated academic performance

  • It is difficult to qualify since income thresholds are on deficit levels 

  • Pell Grants do not/ might not cover the entire tuition bill

Pell Grant, Scholarships and Loans

Pell grants are a non-taxable financial option given to students with financial need. These funds can be used to pay student's tuition and other college fees.

Pell Grants are typically similar to the scholarship you receive for your exceptional performance in academics. The only difference is that scholarships are merit-based and are given based on your academic excellence.

Both do not demand you pay it back unless the given requirements are satisfied.

On the other hand, Pell Grants and loans are poles apart. Loans on the majority of the time require interest and should be repaid within the period mentioned.


Pell Grants are non-taxable 'gift-aid' you receive that do not require to be repaid. Just ensure that you follow all the obligations and fulfill the requirement needs of the pell grant. Pell grants are renewable scholarships, which you do every year. Do not forget to renew before the deadline.

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