The Pell Grant is a financial aid program offered by the U.S. Department of Education. It’s one of the best forms of federal financial aid because you don’t have to repay it. It’s basically “free money” for college.

You apply for a Pell Grant by completing a FAFSA, or Free Application for Federal Student Aid. Pell Grants aren’t handed out to everyone, however. To be eligible, you need to demonstrate that you have financial need. Your income, or your parents’ income, however, isn’t the determining factor — your financial need is.

To determine financial need, the Department of Education uses a formula:

Cost of Attendance (CoA) – Expected Family Contribution (EFC) = Financial Need

Your Expected Family Contribution, or EFC, is determined by your information on the FAFSA. It’s not a mandatory amount that your parents have to pay, it’s merely a number that the federal government, after reviewing your financial situation, believes that you are capable of paying. 

Cost of Attendance is the total amount that it costs to go to a particular school. It includes tuition, room and board, books, fees, and other expenses. The amount for each college is set by the school itself.

The Minnesota Office of Higher Education statistics show how the Pell Grant was offered in the state of Minnesota for the 2017-2018 school year. They show that low-income households received grants, but so did some households making over $100,000, if they had a large number of household members and their finances showed they had financial need for college funding.

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While there isn’t a hard-and-fast income cutoff for all Pell Grants, there is a soft cutoff for a two-person household at $60,000. At that income level, you’ll generally need to have at least three people in the home to receive a small Pell Grant of under $1,000. With $70,000 in annual income, you would need five people in the household to qualify.

Even those income limits, however, aren’t set in stone.

Being “over” the limit may simply mean you have a higher EFC. In those cases, you’ll want to ensure that you demonstrate any legitimate circumstances that prevent you from paying for college, in an effort to keep your EFC as low as possible.

Not every student can qualify for a Pell Grant. These awards are not, however, just based on income, so make sure to fill out your FAFSA completely and honestly. You may find you qualify for more grant money than you thought — regardless of your family’s income.

There are also other grants and scholarships out there to help you pay for college that are worth looking into.