Grants are a type of "gift aid" awarded to students who demonstrate a financial need based on formulas established by federal and state government and/or the school. Unlike a loan, grants do not have to be repaid. Student grants are available from the federal government, state government, school and private organizations.
Need is usually calculated by the basic formula:
| Academic year cost | |
| less | Stafford loan |
| less | any outside aid (including merit scholarships) |
| less | Profile Estimated Family Contribution (EFC) |
| = | Unmet need |
Federal Pell Grants are the largest source of need-based gift aid and are funded by the U.S. government. Pell Grants are awarded only to undergraduate students who have not earned a bachelor's or professional degree such as medicine, law or dentistry. In some cases, a Pell Grant may be awarded to a student attending a post-baccalaureate teacher certification program.
The Federal Pell Grant Program makes annual awards ranging from $400 to $4,310. You automatically apply for a Pell Grant when you complete the Free Application for Federal Student Aid (FAFSA). If your expected family contribution is $4,100 or less, you are probably eligible to receive aid from this program. Many students who do not qualify for Pell Grant funding, do qualify to receive aid from other sources.
Starting with academic year 2006-2007, there are two new federal grant programs:
Federal Academic Competitiveness Grant (AC Grant)
Federal National Science and Mathematics Access to Retain Talent Grant (SMART Grant)
