A Federal Pell Grant, unlike a loan, does not have to be repaid. Pell grants are awarded to students who demonstrate financial need and who have not yet earned a bachelor's or professional degree. The maximum award for the 2017 - 2018 award year (July 1, 2017 to June 30, 2018) is $5,920. The amount of Federal Pell Grant funds you may receive over your lifetime is limited by federal law to be the equivalent of six years of Pell grant funding. Since the maximum amount of Federal Pell Grant funding you can receive each year is equal to 100%, the six year equivalent is 600%
The Pell Grant amount awarded will depend on:
You may not receive Federal Pell Grant funds from more than one school at a time.
Direct Loans, from the William D. Ford Federal Direct Loan Program, are low-interest loans for eligible students to help cover the cost of higher education at a four-year college or university, community college, trade, career or technical school. Eligible students borrow directly from the U.S. Department of Education at participating schools.
There are several benefits in using the Direct Loan Program:
Federal Subsidized Student Loan Borrowing Limitations
As of July 1, 2013, a first-time Federal Subsidized Student Loan borrower is no longer eligible for the Subsidized Student Loan program if he or she exceeds 150% of the published length necessary to graduate within an undergraduate degree program.
In addition, a borrower reaching the 150% limit becomes ineligible for the interest subsidy benefits on all Federal Subsidized Loans disbursed to the borrower on or after July 1, 2013.
In order to receive federal student loans, you must complete certain requirements. The Department of Education has created a website (studentloans.gov) to manage borrower requirements and provide valuable information regarding federal student loans. The three items listed below are required from all borrowers.
Annual Direct Loan Limits – Effective July 1, 2013
Note: It is important to note that even if a student is financing their education on their own, dependency status is still determined by the school.
Congress has passed the Bipartisan Student Loan Certainty Act of 2013, which ties federal student loan interest rates to financial markets. Under this Act, interest rates will be determined each June for new loans being made for the upcoming award year, which runs from July 1 to the following June 30. Each loan will have a fixed interest rate for the life of the loan.
The following table provides the interest rates for new Direct Loans made on or after July 1, 2016, and before July 1, 2017. These rates will apply to all new Direct Loans made during this time, even loans already disbursed before the passage of the Act.
Learn about interest rates and fees associated with federal student loans.