Getting approved for a Pell grant can take the worry out of paying college expenses. Depending on financial need, students may get approved for a full grant. There are several ways to use Pell grant money; the student may even receive a refund check. Learning to use this money properly can help him avoid having to pay taxes on the grant. The following steps will help you ensure that Pell grant money is used to fund college expenses only.

Retain the tuition bill stating that Pell grant money can be used to pay the expense. After registering for courses, the student will be sent a bill for tuition and other fees. There will be an option that allows the student to charge the expenses to financial aid or, more specifically, the student's Pell grant.

Charge bookstore purchases to the Pell grant. Students can make purchases in the bookstore and have the amount charged directly to financial aid. In some cases, the student can even purchase books at the college's online bookstore and have the total charged to a Pell grant.

Obtain a refund for unused funds. Depending on the amount the student receives, there may be leftover funds. These funds will be sent to her in the form of a check. The check can then be cashed and used for additional college expenses.

Put away some of the refund check to cover tuition and books for unpaid semesters. Pell grants are given out for two semesters. If the student plans to attend three semesters, she must put money back to cover the cost. The student should calculate the cost of tuition, fees and books to determine how much should be put back.

Use remaining funds to pay for additional college expenses. Pell grant funds are tax-free as long as they are used to pay for college expenses. For example, the funds can be used for supplies, gas, software and other expenses that are directly tied to college.