Pell Grant will increase by $500. Will college students feel the boost?

Low-income students could get an extra $500 this year to help with the cost of their education.

Under the latest federal spending plan signed by President Joe Biden on Thursday, the maximum value of the Pell Grant is expected to reach nearly $7,400 in fiscal year 2023, an increase of $500 from the maximum award. current $6,895.

Higher education advocates hailed the increase, saying it could help more low-income students start and complete college.

The $500 figure comes on top of a $400 increase the previous year, making it the largest two-year increase in the program’s history, said Terry Hartle, senior vice president of government relations and in public affairs at the American Council on Education, a trade group of universities.

How many low-income students receive Pell grants?

More than 6 million students received the Pell Scholarship in the 2020-21 academic year, according to the Department of Education. Unlike student loans, students do not have to repay the money except in the most extreme cases.

Biden has said he plans to increase Pell’s maximum grant to $13,000 by 2029, and Hartle, other supporters had hoped that increase would happen sooner rather than later.

Still, this year’s most important award “will help so many people who are trying to decide whether to start or pursue post-secondary education,” Hartle said..

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How do I apply for a Pell Grant?

To receive a Pell grant, students must complete the Free Application for Federal Student Aid, or FAFSA, as it is more commonly known. It’s free to fill out.

In a new form to come into force in 2024, students will only need to answer about a third of the questions they had in previous iterations. The government is also tweaking its method of determining how much students and their families could contribute to their education costs, which could mean more money for students who need it most.

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Hartle said universities are eager to see the changes take effect because they could make it easier for students and families to receive the money they need to attend college.

How much is the Pell Grant award?

Not all students will receive the full $7,400 available through a Pell Grant. In the 2020-21 award year, the average student received about $4,600. The price of a student depends on the expected contribution of himself and his family to the cost of his studies.

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An average four-year degree at a public university costs about $9,400, and the cost jumps dramatically to $37,600 for those attending a private institution, according to the National Center for Education Statistics.

What does $500 cover on a college campus?

Pell grants are usually given directly to universities, and the institution will use the funds to cover tuition, fees, and other costs. Anything left over goes directly to the student, who can use the money for other education-related expenses.

It’s fair to say that $500 doesn’t cover much for higher education, but it might make life easier for some students.

The average student spent about $340 on course materials — think textbooks and similar equipment — during the 2021-22 academic year, according to a National Association of College Stores survey.

Student parking permits can cost hundreds of dollars each year at colleges nationwide. On-campus parking for students living at Montana State University, for example, costs between $100 and $245 per year. At the University of Virginia, student permits can cost between $324 and $804 per year.

Students, especially those in science, technology, engineering, and math, are likely to pay additional fees for specialized lab courses that can cost hundreds of dollars. And many campuses may require students to have health care plans and some automatically enroll students in programs where annual premiums can cost thousands of dollars. Students can opt out of these plans if they prove they are insured either through their parents or through plans available through the Affordable Care Act.

Contact Chris Quintana at (202) 308-9021 or cquintana@usatoday.com. Follow him on Twitter at @CQuintanadc