Never overpay for college

Two Common Pell Grant Myths Explained

Pell GrantStatistics can be awfully misleading. Consider the fact that the average Pell Grant appropriation has increased over 300% since the program started in the mid 1970’s. Sounds terrific doesn’t it?

In theory it might, except for the fact that the cost of tuition and room and board in that same span has increased over 600%!

We could get deeper and factor in the rate of inflation for a more concrete statistic but the point is clear: Pell Grants simply do not provide the kind of relief they once did. Let’s tackle two common Pell Grant myths and consider how changes from the beginning of the program to now have contributed to the failure of the program.

Myth #1: Pell Grants are Readily Available

With the amount of students attending college skyrocketing over the years, less than 50% of high school students attended college when the program began while over 70% of high school students attend college today nationwide, the Pell Grant program has suffered considerably. More students and more demand coupled with college tuition rates going through the roof have created an unsustainable program. When considering family income, it is far from a guarantee that a student from a family making 20-30K will receive Pell Grant money.

Myth #2: Pell Grants Cover the Lion’s Share of College Cost

In 1976 when Pell Grants were first physically administered to students, the average grant was $759 per year. Considering that the average for tuition plus room and board for four-year colleges equaled $2,577, this amount made a considerable difference. In 2014-2015, the average cost of tuition plus room and board for a four-year public school is $18, 943 and for a four-year private school the average is $42, 419. Conversely, the maximum yearly amount of Pell Grant money awarded per year is $5, 730, which does little to curb the cost of college even for families with an expected family contribution (EFC) as low as zero.

Given these troubling statistics that unfortunately in this case do not lie, the question becomes how do families come up with college costs without much help, if any, from the Pell Grant? The solution is not simple and requires considerable research and time by the student and family to understand which schools have other sources of financial aid to help curb enormous college costs.

Waiting until senior year to understand what type of financial aid in the form of grants and merit based aid is available is a tremendous risk. The conversation really needs to start early in high school and grades, test scores and extracurricular activities have never meant more.

It is unfair to sugar coat this process, it is cutthroat and far different than the early days of the Pell Grant when said grant was in fact a legitimate safety valve.

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