What Happens to Excess Pell Grant Money

What Happens to Excess Pell Grant Money
  • Opening Intro -

    A federal Pell grant are monies that do not have to be repaid, representing funds given by the U.S. government to help college students pay for their education.


The maximum amount of money awarded currently is $5,550 per academic year, an amount that may be over and above what it costs some students to attend college. Excess Pell grant money does not have to be returned. Instead, it can be used to cover a variety of college-related expenses.

You may be eligible for a federal Pell grant if you complete the free application for student aid form. Once you complete a FAFSA, you will receive a Student Aid Report or SAR that outlines your financial aid package including your Pell grant. Such grants can be for any amount up to the maximum awarded each year.

Your school will disburse funds by either crediting your account for your outstanding education expenses or issuing you a check, an electronic funds transfer or cash for you to manage. Funds are generally disbursed each academic term. Some schools issue funds on the first day of class while others may disburse grant money after the drop period has ended.

Tuition — Your federal Pell grant will be used to cover your tuition. If you attend a community or technical college, your grant may come in for more than your tuition costs. You may be eligible for a grant even if you are not a full-time student. In some cases you may be able to apply your funds to your summer classes.

Room and Board — You are also permitted to use your federal Pell grant to cover your room and board. If you live away from home, grant money can help defray some of this cost.

Books and Supplies — Students may use federal Pell grant money to pay for textbooks and related school supplies. These books and supplies can be purchased at the college bookstore or elsewhere such as online or through a local office supply retailer.

Returned Funds

Some students do not finish the semester or may drop out of college. Other students may not use all of the funds that a college credits to them. In either case, the unused money can be returned by the college to the federal government. Students that drop out can reapply for a Pell grant in subsequent semesters. Contact your college’s financial aid department if you need clarification about your school’s disbursement policy.


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Categories: Grants