Can a school hold Pell Grant money with no outstanding balance?

Education is certainly important, which is why the government has taken active steps to help people who are seeking further education to try to improve their career path once they graduate. The Pell Grant is a federally-approved grant given by the government to students with financial needs so that they can get their degrees from participating institutions.

There are several requirements that the student will need to fulfill in order to be given a Pell grant. Furthermore, he or she will need to have not received his or her Bachelor’s degree yet and should be enrolled in one, or else enrolled in a post-baccalaureate program that is eligible for certification.

The participating institutions can either put the Pell Grant money directly into the student’s school account or give the money to the student directly, or combine both methods. The students should be paid at least once for each term (which can be a semester, trimester, or quarter) that they are enrolled in.

For the academic institutions that do not follow these periods, they must give the money to the grantee at least twice for every academic year that they are enrolled in and are qualified for the Pell grant. Once the student has received the money, he or she is tasked with the responsibility to use the funds exclusively for his or her education, as per the agreement they signed when they applied for the Pell grant.

They must also be able to show that they have a good academic standing in order to continue to benefit from their Pell grant, that is, by getting more funding for their education. They can do this by showing good progress in their degrees. Furthermore, the student must have a good standing in other federal student loans as well.

There are various ways in which the Pell grant can be forfeited, so the grantee must need to take care in order to prove that he or she deserves the financial aid being given by the government.

Generally, the school has no right to hold Pell grant money if the student does not have an outstanding balance that would need to be settled. However, the Financial Aid Office or the Office of the Bursar of your school may be keeping the money intact for you until you contact them.

Any remaining amount from the grant that remains should be given to the student, which again, should be used for academic-related expenses. For example, if your grant is $3,000, and your school fees are only $2,500, you are entitled to a disbursement of $500.

This also means that you will not get any disbursement should the Pell grant money be just enough. In cases when the grant is not enough to pay for your school fees, the remaining amount should come from your own pocket, unless you are receiving financial aid from a different institution.

Bear in mind that the Pell grant money is distributed over the academic year, so it is possible for the academic institution not to be actually holding the money; the Pell grant itself hasn’t sent in the money in the first place, or you are not owed any excess funds at that point in time.


  • Hussain Shoaib

    Hussain Shoaib is an author and digital marketer with expertise in financial aid and education. He has extensive knowledge of the Pell grant and FAFSA, and has published numerous articles on these topics.

6 thoughts on “Can a school hold Pell Grant money with no outstanding balance?”

  1. i got to milan institute for cosmotology.
    and they have three phases.
    1 is basics 2 and 3 your out on the floor working on actual clients.
    my financial aid rep said ill be getting about 2500 of pell grant money back, since the loans that i had to take out will pay my full tuition fees and such.
    and they said that they’re holding the money until i reach 450 hours of class time (this applies to every student)

    and ive read that they can’t do that.
    why are they able to do this?
    is there anything that i can do?

  2. The financial aid at the school your attending should apply your grant money to your tuition before your loans are applied! it is less money you will have to pay back on your loan! The school sounds like they want you to have a certain amount of clock hours are you sure its not money from your loan that your getting and not the grant? If you signed a paper stating you want the remaining money its from your student loan not the grant…these schools are scandals when it comes to grant money they want to keep it knowing you don’t have to repay it! you can call the Dept of Education they will help you resolve it here is the number 415-486-5700…good luck!

  3. I have reviewed my financial aid and I found several occasions where pell awards were only partially distributed and the balances remain in school account. I’m no longer in school but can I recoup these funds.I have been trying to receive funding to complete bachelors degree but I have met 600% lifetime cap for pell grants however, parts of this money is sitting in school accounts and were never distributed to me.

  4. My Community College in So CA keeps telling me that they have a ‘system glitch’, therefore it is holding up my disbursements (Pell & Cal Grant). It has been going on for 2 months with no end in sight. I have been awarded & packaged and reassured by the Financial Aid Department/Financial Aid Director that I will be funded but need to check status each week on the date. WTH?!

    What kind of business process is that? There must be some federal & CA state governed laws that protect students. Or a way for us to report these stalling tactics. Especially when students who qualify, are awarded, are in good standing (SAP), and started the process early and are in need of their aid. Something just does not seem right I really do believe some schools are holding these grants. I am going to call one of the numbers above to see what can be done at this point.

  5. I applied for Pell Grant earlier this year for Fall and Spring Semesters. When I went to financial aid they told me I would get $6195 disbursed in two payments of $3098 and $3097 however when they applied funding to my account they only paid $2323 I am a full time student with 5 classes this semester and the girl who sits next to me in one class said she too only received $2323 from Pell Grant Funding. Which means now I have to take out loans just to get books for next semester.

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