The Pell Grant is referred to as gift aid, which means the funds do not have to be repaid. This federal grant is awarded to the neediest undergraduate students who are working toward an associate's or their first bachelor's degree. Once a student  has earned his or her first bachelor's degree, they are no longer eligible for Pell Grant.

Award amounts may vary and are dependent on enrollment status: full–time, at least 12 credits; three–quarter–time, 9–11 credits; and half–time, 6–8 credits.

Congress enacted the Consolidated Appropriations Act of 2012 which limits the federal Pell Grant to a maximum of 12 full-time semesters over a student's lifetime.