Tag Archives: applying for pell grant

Do student loans count as income when applying for pell grant?

If you were a financially handicapped student back in college, applying for the federally budgeted Pell Grant may have helped you navigate your way through the university. See, the Pell Grant is sponsored by the government through the department of education, and was formerly known as the Basic Educational Opportunity Grant. The Pell Grant is covered by the Higher Education Act of 1965 or more commonly known as the HEA and is considered to be one of the most effective educational policy, second only to affirmative action, which aims to equalize the opportunity to access credible education.

In applying for pell grant, a student must submit a form called the FAFSA or the Free Application Federal Student Aid. Unlike loans, the Pell Grant does not need to be repaid once the student finishes his degree, nor does it have to be returned when a student voluntarily or involuntarily quit studying. More than that, it is important to take note that, compared to student loans which take a look at your credit history, grades, mortgages, and current economic standing, every university or college student is given the opportunity to be eligible for a Pell Grant.

But, like most legislations, a lot of legal technicalities have been questioned by oppositionists of this law. They say that while the Pell Grant is beneficial in principle, it is not insulated from either being abused by students who are not really poor, or by what they call bad investments, or students who do not continue with the pursuit of their education. According to them, Pell Grant restrictions have to be made because the principle behind state sponsored educational subsidy is to make sure that it develops a highly educated citizenry. To them, these students are the scholars of the state and society in general. And like all scholars, they should be subject to the same high standards that universities follow. Given these arguments, they have tried to skirt their way through legal processes to make the Pell Grant more exclusive to those who truly deserve it, with the word “deserving” defined by their own standards. Perhaps, one of most hotly contested debate regarding the Pell Grant is whether or not student loans do count as income in applying for pell grant.

The argument behind this claim is simple; if a student is supposed to be so poor to the extent that he or she could not afford to pay for his own education, it is logical to assume that that person will not qualify for student loans. So, if one qualifies, it is reasonable to believe that that person might be monetarily capable of paying for his education to some extent. Fortunately, the law has been clear and firm about this. Student loans do not qualify as income. As a matter of fact, when students are required to state their current balance of cash, savings or checking amount, it expressly rules that it does not include student grants, aside from those that are also federally given. This is to protect the interest of the student from opting to strike deals with private financing institutions which ask for exorbitant payment schemes once the student graduates. This argument of the proponents of the Pell Grant makes the policy more equitable. After all, they say that those who have less in life should have more in law.