Do You Have to Pay Back Pell Grants?

Key takeaways

Pell grants, a type of federal student aid to students with financial need, generally do not require repayment, with some exceptions. 

• More than six million students received Pell Grants during the 2023-2024 school year [1].

• Situations that require Pell Grant repayment include withdrawing from school, changing your enrollment status or income level, receiving a robust financial aid package, and receiving more federal aid than you’re eligible for.

• You can make college more affordable with Pell Grants, which typically cover some but not all costs and work best when paired with other forms of financial aid.

Learn more about what a Pell Grant is, when you might have to pay it back, and how it can help you pay for your college education. 

*Keep in mind that you should consult your Pell Grant provider or studentaid.gov to ensure the accuracy of this information as it applies to your unique circumstances and in case the Pell Grant program terms have changed.

What is a federal Pell Grant? 

A Pell Grant is a type of federal student aid given to undergraduate students who demonstrate financial need. Unlike a student loan, Pell Grants usually do not have to be paid back. The Pell Grant gets its name from Senator Claiborne Pell of Rhode Island, the chief sponsor of the 1972 bill that created this education funding program. For the 2023-24 school year, around six million students received a Pell Grant to help cover the costs of their education [1].

Do you have to pay back a federal Pell Grant?

Pell Grants are like scholarships in that you generally do not have to pay back the award money. Nor do you have to work on campus in exchange for the funds. However, the government may ask you to pay back all or a percentage of the amount you received under certain conditions:

You withdraw early from school.

If you drop out of school before the end of the program for which you were awarded the grant, you will have to pay back at least part of your Pell Grant. The government views this as unearned money since you didn't complete the program. Be prepared to pay back half of the "unearned" money. If you receive $1,000 and leave school in the middle of the semester, you will pay $250.

Your enrollment status changes.

Changing your course load from full- to part-time status changes the amount of your tuition and reduces your need. If you don't pay back your "Pell Overpayment," you may not be able to receive future federal aid.

Your household income changes. 

Your household income is one of the factors used to calculate the amount of your Pell Grant. If your family's income increases, you may qualify for less financial aid and may have to pay back part of your Pell Grant.

You receive financial aid from other sources.

Your overall financial aid package affects the amount of your Pell Grant. If you receive a scholarship or grant after your Pell Grant, the government may ask you to pay back some of the money.

You receive more Federal Student Aid than you're eligible to receive.

If the government pays you more than your eligibility limits, you may need to pay back the overpayment amount. For this reason, it helps to pay attention to the amount of aid you receive in your disbursement.

Read more: Is College Worth It?

Do you get to keep leftover Pell Grant money?

Yes, you get to keep leftover Pell Grant money. Your school will apply your Pell Grant to your tuition, fees, and on-campus housing. If your Pell Grant exceeds those costs, your school will credit any remaining money to you, usually via electronic funds transfer or check. You can use the remaining money toward other educational expenses, such as books. School policies may vary on when and how much they will pay out if you have a credit.

What happens when you have to repay a Pell Grant?

If your school tells you that you have to repay a Pell Grant, you have 45 days to pay what you owe or agree to a repayment plan. The terms of your repayment plan may allow you to pay the money directly to the school or to a third-party debt collector. It's very important that you follow your agreement in order to maintain eligibility for Federal Student Aid in the future. 

Prepare for college with helpful resources

Visit our Career Resource Hub to explore your academic and professional career path. Then, check out these resources that can help you make your college plans and beyond:

• Watch on YouTube: What Should I Major In?

• Build your knowledge: How to Strengthen Your Critical Thinking Skills

• Read an insider story: How Steven Schmidt Advanced in His Career with UNT's B.A.A.S. Degree

Discover flexible degree programs from major colleges and universities on Coursera.

Frequently asked questions (FAQ)