Pell Grant recipients can get $20,000 in student loan forgiveness instead of $10,000. How to check if you qualify

Under the Biden administration’s plans to wipe out some student loan debt, one particular type of need-based financial aid that many borrowers receive could mean qualifying for twice as much in forgiveness.

If you were the recipient of a Pell Grant, you may be eligible for up to $20,000 in student loan forgiveness instead of $10,000. Both kinds of relief come with income caps for qualifying: $125,000 for individual tax filers and $250,000 for married couples who file jointly, according to the plan released Wednesday by the White House.

“The idea behind offering more forgiveness to Pell Grant recipients is to target the relief,” said Allie Arcese, spokesperson for National Association of Student Financial Aid Administrators.

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Of course, you may wonder, “What is a Pell Grant?” — and perhaps more pointedly, “How do I know if I have a Pell Grant?”

There’s a decent chance you received one as part of your financial aid package while at college: Of the estimated 43 million borrowers who will benefit from the administration’s forgiveness plan, more than 60% are Pell Grant recipients, according to the administration.

While many borrowers — an estimated 8 million — would see an automatic reduction or elimination of their student loan debt because the U.S. Department of Education has the information it needs, an application process would be implemented for others.

Here’s what to know.

If you’re unsure whether you received a Pell Grant as part of your financial aid package, you can check your account on studentaid.gov. Just be aware that, right now, heavy traffic to the site is slowing it down.

On the main page of your account, there’s a section titled “My Aid,” Arcese said.

“This shows their outstanding loan balance, as well as a breakdown of any grants they received,” Arcese said.

Alternatively, you can check with the financial aid office of the college you attended to see if it can provide you with that information, said higher-education expert Mark Kantrowitz.

Pell Grants are awarded through the financial aid application process — using the so-called FAFSA form — and are given out based solely on financial need (not on factors like grades or extracurricular activities). And unlike loans, the money generally does not need to be repaid.

Most recipients come from families with income below $60,000, according to the White House.

However, the grants come with limits — which means students and their families are charged with covering the remaining cost of attendance through other aid such as scholarships and other grants and, yes, student loans that you start paying back after you graduate.

The average loan balance is more than $30,000, up from $12,000 in 1980.

The maximum Pell Grant for the 2022-2023 school year is $6,895. 

Based on the average cost of attending a public four-year institution — $27,330 for the 2021-2022 school year, according to the College Board — the maximum Pell Grant covers roughly 25% of the cost. That compares with more than 75% in 1975, according to the National Association of Student Financial Aid Administrators.

In the 2020-2021 school year, about 6.4 million students received a Pell Grant, each getting an average of $4,166, according to the National Association of Student Financial Aid Administrators.