The Pell Grant is based on financial need of the student, which is determined by the U.S. Department of Education using a standard formula. This formula is shown as the EFC score, which all students will receive if they’ve completed and submitted the FAFSA form.
The maximum pell grant amount that a qualified applicant will receive will change every school year. The Pell Grant amount is expected to increase by $500 to $5,350 for the 2009-2010 academic year. It will then go up to $5,500 for the 2010-2011 academic year thanks to the stimulus package signed into law by President Obama in February 2009.
President Obama also proposes to take Pell Grants out of lawmakers' hands, giving the program a mandatory stream of dollars like Social Security and Medicare, and to index Pell Grants to the annual inflation rate. If the Pell Grant tracks the annual inflation index, then the Pell Grant will increase every school year. This will dramatically improve the chances of lower-income students to receive a post-secondary education.
