It was a grant, not a loan.
I assume there are supposed to be some restrictions on how the money can be spent, but doubt that it is very strictly enforced.
I got a Pell Grant years ago and there is no CO trips on what you spend the money on. It is expected it will be use to pay for something educationally connected, but that can be books, tuition room and board, whatever.
Not when I was in collage.
As long as you are attending collage and getting acceptable grades the money can be used as you like.
I knew one guy who would would use it to buy Raman, canned soup and other collage food staples in bulk so he would be sure of not going hungry during the quarter.