If you fail a class and are paying tuition with Pell Grant funds, you will still receive a Pell Grant for the current semester, but your financial aid may be affected in the following semester. To continue receiving a Pell Grant, you must maintain overall satisfactory academic performance.
Overall satisfactory performance means a cumulative grade point average (GPA) of 2.0, according to financial aid officer Mark Bennet, writing for Pell Grant Eligibility. Failing one class hurts your GPA, but won't necessarily push you under the limit. However, if you have been barely passing classes and then fail one, you could have your aid suspended.
Once a Pell Grant is given to you, you do not have to pay it back as long as it is used for educational expenses, such as tuition and books. Hence, if you are enrolled in a course and have been approved for a Pell Grant for the semester, you will receive that aid disbursement regardless of your grades. However, if your overall academic performance is less than satisfactory, you may not receive a Pell Grant for the next semester and will have to get your grades up to receive grants in the future.
Financial Aid Advisors
If your GPA falls and your academic performance becomes unsatisfactory, you should talk with a financial aid advisor. Financial aid advisors can look at your situation and intercede on your behalf for continued aid.
The U.S. Department of Education requires students to maintain a certain level of academic performance to provide an incentive for students to study and to also direct funding towards the students that are most likely to finish their degrees. Students that fall below the 2.0 GPA are less likely to finish their course of study and hence use the benefits of a college degree.