Who is Eligible for a Pell Grant?
As a student, learning about all types of federal financial aid available to you, including Pell Grants, is important. But what exactly is a Pell Grant and how can you know if you are eligible to receive one?
Only certain students are eligible for Pell Grants. Typically, eligibility is based on financial need and college-level completion. Generally, undergraduate students with significant financial need are eligible for Pell Grants. Eligibility shouldn’t be affected much if students have a 529 college savings plan, but, to be safe, parents should own 529 plans and name their children as the beneficiaries. Starting a 529 plan early in your child’s life can help you save for college so that their eligibility for a Pell Grant won’t determine whether they can afford tuition at a four-year university.
At Sootchy, we care about helping parents and students more comfortably afford college tuition. Download Sootchy for 529 college savings plans to begin preparing for the future today.
Are You Eligible for a Pell Grant?
The two eligibility requirements for a Pell Grant are exceptional financial need and completed college level. If you meet the criteria of both requirements, you may be eligible to receive a Pell Grant, which can help you more easily afford the cost of college.
Generally, Pell Grants are only available to undergraduate students that have not completed college. This means if you got your bachelor’s degree and plan on applying for a Pell Grant to help cover tuition for a post-graduate degree, you will likely not be eligible to receive grant money.
The second part of the equation is financial need. Pell Grants are generally only available to undergraduate students that demonstrate exceptional financial need. Pell Grant eligibility is largely based on your individual and familial financial information. If your family has considerable expenses, such as multiple college tuitions, and a low income, you may be eligible for a Pell Grant. How much your family plans on contributing to your college tuition also matters. If you are on your own and do not expect to receive financial help from your parents for your college tuition, you may be eligible for a Pell Grant.
Students that take a bit longer to complete college may not be eligible to receive a Pell Grant for the duration of their college careers. Students can only receive a Pell Grant for 12 academic terms, which adds to about six academic years. There is no age limit to receive a Pell Grant; only your college degree level and financial situation matter when determining eligibility.
Are Students with 529 College Savings Plans Eligible for Pell Grants?
If you plan on applying for a Pell Grant, you may be concerned that your eligibility will be called into question if your parents have a 529 college savings plan with Sootchy. That’s a valid concern, as your financial situation, like your assets, largely determines Pell Grant eligibility. However, eligibility for federal financial aid, including Pell Grants, will likely be unaffected if you have a 529 plan.
When parents are preparing for the cost of college, they may make the wise decision to start a 529 college savings plan with Sootchy. Using this investment and savings account, parents can make contributions throughout a child’s life to earn and save funds to put towards college tuition. But what does having a 529 plan mean for your eligibility for financial aid of any kind, including a Pell Grant?
In most cases, having a 529 plan shouldn’t impact your eligibility for receiving a Pell Grant much. While students can only receive a Pell Grant if they demonstrate exceptional financial need, having an investment asset such as a 529 plan does not necessarily impact their eligibility. That’s largely because the funds earned in a 529 plan can only be withdrawn tax-free when used on qualified expenses. As long as you and your parents only make withdrawals for qualified expenses, having a 529 plan won’t mean you are not eligible to receive a Pell Grant.
To make sure a student’s eligibility for federal financial aid is unaffected, parents should own a 529 plan. When a student owns such an account, eligibility for Pell Grants may get complicated. A student can still be a beneficiary of an account when their parent starts and owns a 529 plan with Sootchy.
Should You Have a 529 Plan if You Plan on Applying for a Pell Grant?
College tuition is expensive. All parents know this, but the cost of sending a child to a four-year university may be more concerning to parents with lesser incomes. One way to start preparing for the cost of college is by opening a 529 plan early in your child’s life. If you know that affording college might be difficult for your family, consider taking this route. If you do, your child may not even have to apply for a Pell Grant before heading to college.
Although you might think your child will be eligible for a Pell Grant based on their financial need, waiting to see if they are given a grant might be anxiety-inducing. There are ways for parents to start saving from the day their children are born, like by starting a 529 college savings plan with Sootchy.
Regardless of their financial situation, all parents can benefit from opening a 529 plan account. When you open an account when your child is young, you can make regular contributions and sound investments throughout their life. By the time your child is ready to go to college, you may have saved and earned enough to foot the bill. This might mean that your child will not have to apply for a Pell Grant at all and that their college tuition will be covered. Of course, there’s no harm in applying for a Pell Grant even if you have a 529 plan, as Pell Grants generally do not have to be repaid.
Start Saving for College Today with Sootchy
Preparing for the cost of college can seem like a ginormous task. To make things easier, parents can download Sootchy for 529 college savings plans and start preparing today.
