How grants work and who awards them

Grants are aid you generally keep without repaying, and they come from three main places. Knowing which source sets which rules helps you ask the right office the right question. Here is how the main grants are decided and where each one comes from.

Federal grants

The Federal Pell Grant is the largest federal grant for undergraduates. The amount depends on your Student Aid Index, your school's cost of attendance, and whether you study full-time or part-time. The maximum is set each year and published on studentaid.gov.

Pell also has a lifetime cap, equal to about six years of full-time study. Your StudentAid.gov account shows how much of that cap you have used.

The Federal Supplemental Educational Opportunity Grant, known as FSEOG, is run by participating schools from a limited pot of money. Schools give it first to students with the most need, so applying early helps.

State and school grants

Most states run their own grant programs for residents attending college in the state. Many use your FAFSA, and each state sets its own deadline and rules. Your state's higher education agency publishes them.

Colleges also award grants from their own funds, sometimes called institutional grants. These may be based on need, on academic record, or on both. The school decides who receives them and whether they renew.

What to have ready

• A completed FAFSA for the year
• Your state grant deadline
• Your school's priority filing date
• Any renewal rules on grants you already hold

When a grant has to be repaid

A grant usually stays yours, but there are exceptions. If you withdraw partway through a term, part of your federal grant may have to be returned under the federal withdrawal rules. An overpayment caused by a mistake on your record can also be collected.

The TEACH Grant is a special case. It requires a period of teaching service after graduation, and if that service is not completed, the grant turns into a loan with interest. Read its agreement closely before you accept it.

If a school asks you to repay a grant, ask for the calculation in writing. The aid office can explain how the amount was worked out and whether a payment arrangement is possible.