How to Determine the Family's Size for a Pell Grant

Taking advantage of public sources for educational financial aid can make college a much more affordable reality for a student. To determine need-based award sizes for financial aid such as the Pell grant, the United States Department of Education takes financial information from enrolled students and their families. This financial information is then calculated into a figure known as the expected family contribution. Calculating this figure will help you determine your Pell grant award eligibility.

Instructions

1

Complete the Free Application for Federal Student Aid, and file it with the U.S. Department of Education (see Resources). The FAFSA must include financial information for both the student applying for federal aid and his parents, including income, assets, size of the household and the number of family members currently attending college.

2

Use the financial information included in your FAFSA application to find out what the expected family contribution will be for the student. Collect the information about assets and income for both the students and parents that appears on the FAFSA. Write them down if you don't want to keep referencing your FAFSA copy.

3

Calculate the net household income of the student applying for Pell Grant aid. The Department of Education considers net income to be the total of household income minus taxes and basic living expenses, including food and shelter. Add the total of your shelter bills, whether you pay rent or mortgage, as well as basic living expenses for food, utilities and other living expenses. This net income figure is considered to be part of the basis for the Pell grant's expected family contribution.

4

Calculate the expected parental contribution from assets. This is typically the sum of all cash resources and bank accounts as well as the net worth of investments. The Department of Education applies an asset protection allowance that reduces the asset contribution; this allowance can range from about $2,000 to $80,000 or more depending on the parents' age and number of children. The remainder is multiplied by a conversion rate so that only a percentage of available assets are considered part of the family contribution. As of 2011, this conversion rate was 12 percent (0.12).

5

Calculate the student's expected contribution through assets. This is basically the same calculation as the parental asset contribution, but the conversion rate is 20 percent (0.2) instead of 12 percent.

6

Add together the sum of the net household income, the parental contribution from assets and the student's contribution from assets. This total is considered to be the expected family contribution for a full-year of collegiate education. A low expected family contribution makes a student eligible for the maximum Pell grant award, which is $5,550 per grant as of 2011. (See References 1, section titled "Purpose")