Sometimes even the best students find themselves struggling in a particular class, and despite their best efforts, receive a failing grade. Unfortunately, if a course is required for a major the student is pursuing, he will have to repeat the course. But the good news is there is no repayment penalty if the student was receiving a federal Pell Grant at the time he failed to pass the class. Federal guidelines require students to maintain an overall passing grade point average in order to continue receiving financial assistance through the Pell Grant program. Students may be required to repay a Pell Grant is if they drop out of college in the middle of a semester.
A Pell Grant is money the federal government awards college students to pay for educational expenses. Unlike loans, students who receive a Pell Grant do not have to repay the amount of the grant to the federal government. Pell Grants are typically used to pay tuition. But if a student's tuition is already paid by other sources, the Pell Grant can be used to help pay for books, supplies, room and board, and transportation costs. The Pell Grant is only available to undergraduates, and the amount a student receives is based on factors that include the cost of attending the college, other siblings that also are in college and whether the student is attending full or part-time. The maximum Pell Grant for the 2011-12 year is $5,550.
If a student drops out of college before completing at least 60 percent of the semester, he may be required to repay part of the Pell Grant money received for the full semester. The college will be required to return the unearned portion of the Pell Grant money to the Department of Education, and the student is likely to get a bill from the college for the amount of money the institution had to return. If the student can't pay the whole amount at once, the college will set up a payment plan. But the student will have to repay the money or make regular payments on the debt in order to be eligible for more federal student aid.
Calulating Monies Owed
To estimate the amount of Pell Grant money a student would owe for dropping out in the middle of a semester, count the number of days in the semester and the number of days the student attended college before officially withdrawing. Divide the second number by the first to get the percentage of days the student was enrolled. For instance, if the semester is 100 days long and the student withdrew on day 25, the student would have earned 25 percent of the grant. If the student had received a Pell Grant of $3,000, college officials would have to return the unearned 75 percent, or about $2,250 to the federal government. The college could bill the student for 50 percent or more of that amount.
Satisfactory Academic Progress
A student must make satisfactory academic progress toward graduation to remain eligible for Pell Grants. The student needs to maintain the required grade point average for probationary status at the college, which often means earning at least a "C" average after two years of enrollment. Students who struggle to complete college-level work can also receive Pell Grants for up to 30 hours of non-credit remedial work.
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