two pells in one award year

Two Pells

in One Award Year

Fred Sellers Office of

Postsecondary Education

April 9, 2010

Agenda

• Legislation and negotiated rulemaking• Basics on crossover payment periods• 2009-2010 award year• 2010-2011 and subsequent award years• Summer 2010• Additional provisions starting in 2010-2011

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Legislationand

Negotiated Rulemaking

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Budget: Scheduled Award

• FY 2009 (2009-2010)– Maximum Scheduled Award: $5,350

• FY 2010 (2010-2011)– Maximum Scheduled Award: $5,550– SAFRA: change in minimum award

calculation

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Legislation

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• Higher Education Opportunity Act of 2008 Pub. L. 110-315 (effective 2009-2010)

• Eligibility for a second Scheduled Award in an award year– Must be in a program leading to associate

degree, baccalaureate degree, or certificate– Must be attending at least half-time in order to

receive any of second Scheduled Award

Negotiated rulemaking

• Team V-General and Nonloan Programmatic Issues met in March 2009, April 2009, and May 2009.

• Negotiations included two Pells in one award year

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Negotiated rulemaking

• No consensus• Notice of proposed rulemaking: August 21,

2009 • Final regulations: October 29, 2009• Effective starting in 2010-11• Early implementation

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Basics on Crossover Payment Periods

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Crossover payment period

• Is a payment period that includes June 30 and July 1, i.e., a payment period that occurs in two award years

• May be a term or a nonterm payment period• Must be assigned to one award year• Must have valid SAR/ISIR for assigned year• May assign two consecutive crossover payment

periods to the same award year• Through 2009-2010 award year, have always

been able to assign to either award year

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Example• A program has a semester calendar with two

summer sessions (6/1 – 7/14 and 7/20 – 8/28).• If combined in one term, the combined term is a

crossover payment period regardless of what classes students attend.

• If the two sessions are considered separate terms, only the 6/1 – 7/14 term is a crossover payment period.

• Note: if the two sessions are separate terms– Full-time must be 12 hours for each session to use Pell

Formula 1– Without a single summer term, the program may no longer

qualify to use an SAY for Stafford/PLUS loans.10


Crossover payment period and packaging

• Raises packaging issues• Must use same EFC, COA, and need for all

programs except Pell• Treat Pell as estimated financial assistance (EFA)

for other Title IV• For Pell, use EFC for the award year from which

the student will be paid

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Crossover payment period and packaging

EXAMPLE• Summer term normally assigned as last payment

period of award year.• Institution decides to pay 2010 summer Pell from

2010-11 ISIR. – Use 2010-11 ISIR/EFC for Pell– Use 2009-10 ISIR/EFC for packaging all other

aid• Amount of Pell received is applied as EFA to

determine need for other Title IV.

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• These requirements are not new.• The new “two Pell” requirements are in addition to

these requirements. • For example, if you have no summer crossover

payment period, the “two Pell” requirements still apply to the rest of an award year.

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2009-2010Award Year

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2009-2010 Implementation

• No regulations for 2009-2010• Legally supportable ways to implement in ED:

staff conference presentations, FSA Handbook, and new final regulations

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2009-2010 Implementation

• Term-based program: no requirement that a student must−– Complete the hours of the first academic year

to be eligible, or– Be taking hours attributable to the second

academic year to be eligible• Clock-hour or nonterm credit-hour program: a

payment period requirement that student must complete the hours of an academic year to move to eligibility for a second Scheduled Award due to payment period definition

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2009-2010 Payments

• School determines payment for each payment period

• Calculation is based on Scheduled Award for the award year– Pell Grant formulas have not changed– Each calculation is done using same amount

for Scheduled Award

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2009-2010 Payments

• Must pay an eligible student until reach 200 percent of his or her Scheduled Award for the award year

• Can begin paying from 2nd award while paying balance of 1st award if at least half-time student

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Credit-hour example

• $5,000 Scheduled Award for 2009-10• Summer 09 and Fall

– Paid on ¾ time and full-time enrollment– Earns only 6 semester hours each term

• Spring, receives payment from first and second Scheduled Awards– $ 625 1st award– $1,875 2nd award

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Summer 2009¾ time (6 hr)

$1,875

Fall 2009Full-time (6 hr)

$2,500

2009-10 Award Year

Summer 2010Full-time (12 hr)

$2,500

Spring 2010Full-time (12 hr)

$2,500

operationallytransparent

Clock-hour example

• $5,000 Scheduled Award for 2009-10• 1,800 clock-hour program with all payment

periods in the 2009-2010 award year

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1st P.P. 450 cl hr/13 wk it

$2500

2nd P.P. 450 cl hr/13 wk it

$2500

2009-10 Award Year

4th P.P. 450 cl hr/13 wk it

$2500

3rd P.P. 450 cl hr/13 wk it

$2500

Two Pells: COD

• Added new field in COD Common Record– Additional Eligibility Indicator (AEI)

• Set AEI to “true” when awarding funds from the student’s second Scheduled Award• Track the 200 percent limit in COD

• With AEI set, is no POP MRR but concurrent enrollment MRR is still triggered if enrollment dates were within 30 days

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AEI: COD screen

Additional Eligibility Indicator Checkbox

Reminders for 2009-2010

• Must pay eligible students, including less-than-half-time for first Scheduled Award

• Never had concept of headers and trailers; can choose award year to pay a crossover payment

• Cannot ignore payment periods, for example, crossovers or intersessions:– Must pay eligible students in any payment

period in an award year• Must implement “two Pells” regardless of software

capabilities, even if requires manual interventions for crossover or other payment periods

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2010-2011Award Year

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Two Pells: Final regulations

• Must be used starting in the 2010-2011 award year

• May apply in some instances to summer crossover payment period considered to be in 2009-2010

§§690.63, 690.64, 690.67

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Policy goals

• Accelerating completion• Maximizing the benefit of a second Scheduled

Award– Must attend full-time, or almost full-time, to

receive significant benefit• Applying student achievement and

accountability principles for use of funds under the American Recovery and Reinvestment Act of 2009

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Basics: Eligible student• Is enrolled in credit or clock hours attributable to a

student’s second academic year in the award year• Is enrolled in an eligible program leading to a

bachelor’s or associate degree or other recognized educational credential– The program must be greater than one academic

year in length to be an eligible program for a second Scheduled Award.

– An exception to the degree or certificate is provided for students with intellectual disabilities.

• Is enrolled at least as a half-time student

§690.67(a)

Subpart O of part 66827

Basics: Payment calculations

• Use same amount for both Scheduled Awards in the award year

• Calculate payment for each payment period• Have been no changes to the formulas to calculate

payments

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Basics: Disbursements

• Disburse to eligible students until reach 200 percent of the student’s Scheduled Award for the award year

• Can begin disbursing from second Scheduled Award in a payment period while paying the balance of first award if student qualifies for second award

§690.63(h)

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Crossover payment period assignment

• Must assign the payment period to the award year in which the student receives the greater payment– If assigned to first award year, must pay with

first award year funds– If assigned to second award year must pay with

second award year funds

§690.64

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• Must determine the greater payment based on all requirements that apply

• Must not rely on EFC or Scheduled Award alone• If only have valid SAR/ISIR for one award year,

must rely on that record – For example, that award year record is higher

if, for the other award year—• No SAR/ISIR• Rejected SAR/ISIR without an EFC• Incomplete verification

– May still need to pay on other year if receive a valid SAR/ISIR

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EXAMPLE• $4,000 Scheduled Award for first award year and

$5,000 Scheduled Award for second award year• Receipt of ISIR with a higher Scheduled Award for

second award year after summer term is completed• Payment as full-time from first award year ($2,000)

although student only completed the term as half-time

• Higher payment remains the first award year payment since payment from second award year would be based on half-time, i.e., $1,250 (lump sum payment rule, §690.76(b))

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• Must reassign if receive information that student would receive greater payment – within deadline date for the first award year

(2010 crossover payment period, September 10, 2010)

• May reassign if information received after initial deadline – but not later than the deadline date for

administrative relief for the first award year(2010 crossover payment period, February 1, 2011)

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Credit-hour example

• $4,000 Scheduled Award for 2010-11• Fall, completes the hours of the first academic

year• Spring, receives payment from second

Scheduled Award

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$2,000


$2,000

2010-11 Award Year


$2,000

Credit-hour example

• $5,000 Scheduled Award for 2011-12• Summer 2011 reassigned• Fall, completes the hours of the first academic

year• Spring, receives payment from first and

second Scheduled Awards– $ 625 1st award– $1,875 2nd award

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Summer 2011¾ time (9 hr)

$1,875


$2,500

2011-12 Award Year


$2,500


$2,500

operationallytransparent

Credit-hour example

• $4,000 Scheduled Award for 2012-13• Spring, does not complete first academic year• Summer, eligible with payment of $500 from

balance of first award and $1,500 from second award

• May need to assign summer to 2013-2014 if a higher payment

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Fall 2012¾ time (9 hr)

$1,500


$2,000

2012-13 Award Year


$2,000

Clock-hour example

• $4,000 Scheduled Award for 2010-11• 1,800 clock-hour program over 52 weeks of

instructional time• 3rd payment period, a crossover payment

period

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1st P.P. 450 cl hr/13 wk it

$2000

2nd P.P. 450 cl hr/13 wk it

$2000

2010-11 Award Year


$2000

Clock-hour example

• $5,000 Scheduled Award for 2011-12• Reassignment of 3rd payment period since

student is now eligible for a $2,500 payment

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$2500

4th P.P. 450 cl hr/13 wk it

$2500

2011-12 Award Year

Summer 2010

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Crossover payment period assignment for 2010

• Effective date of final regulations affects 2010 crossover period.

• Institution may designate based on options applied to all students or on student-by-student basis.

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• Institution may designate:– Prior to July 1, 2010, a student’s payment period

as being in the 2009-10 and not apply these regulations;

– A student’s payment period as being in the 2009-10 award year with regulations being applicable; or

– A student’s payment period as being in 2010-2011, in which case the regulations must apply.

• Before July 1, 2010, establish written policy

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EXAMPLES

• Prior to July 1, 2010, institution determines it will--– Treat 2010 summer payment periods as being in

09-10 and not apply these regulations.• Prior to July 1, 2010, institution determines it will--

– Treat 2010 summer payment periods as being in 09-10 and not apply these regulations, but

– Assign student’s payment period to 2010-2011 if the student would receive a larger payment

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EXAMPLES

• Prior to July 1, 2010, an institution determines that it will--

– Treat 2010 summer payment periods as being in the 2010-2011 award year

• Prior to July 1, 2010, an institution determines it will make 2010 summer payment period assignments on a case-by-case basis

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EXAMPLES

• Prior to July 1, 2010, makes NO determination of policy to apply-- – Must apply new regulations to all summer

disbursements, whether for 9-10 or 10-11 (does not affect 9-10 payment periods prior to summer 2010)

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Additional ProvisionsStarting in 2010-2011

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Transfer student

• Final regulations: two options– Assumption method

• Based on disbursements received

– Hours-earned method• Based on actual hours earned

• Method at option of institution: apply on a student-by-student basis or to all students

§690.67(b)46

Transfer student: Assumption method

• Assume completed first academic year if received all of first Scheduled Award at prior institution

• If less than first Scheduled Award, calculate hours considered to have completed:

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Amount disbursedat prior institution X

Hours in current institution’s academic year

Amount of Scheduled Award at prior institution

=Hours

considered completed


EXAMPLE – credit hour• Fall transfer student received $2,000 of $4,000

Scheduled Award for summer at prior institution. • Current institution, without a summer term, defines

academic year, in part, as 24 semester hours.• Hours in award year considered to have earned

for prior attendance:

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$2,000 disbursedat prior institution X

24 hours in current institution’s academic year

$4,000 Scheduled Award at prior institution

= 12 hours considered completed


EXAMPLE – clock hour• Transfer student received $3,000 of $4,000

Scheduled Award at prior institution. • Current institution defines academic year, in part,

as 900 clock hours.• Hours in award year considered to have earned

for prior attendance:

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$3,000 disbursedat prior institution X

900 clock hours in current institution’s academic year

$4,000 Scheduled Award at prior institution

= 675 clock hours considered completed


• Round down any fractions of a credit or clock hour

• Except if courses are offered in fractions of credits, may retain fractions

• Example– Using the assumption method, a transfer

student is considered to have earned 12.7 credits in the award year at a prior institution.

– If the student’s program is offered in courses of 2.5 credit hours, the institution may consider the student to have 12.7 credits or 12 credits.

– If the program were offered in 3-hour courses, the student would have 12 credits.

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Transfer student: Hours-earned method

• The institution may determine the credit or clock hours actually earned at other institutions.

• The institution must have information that—– Includes the time periods when the credit or

clock hours were earned, and– Does not include nonapplicable credit or clock

hours.• Any hours earned are applicable. For example,

hours—– Need not be earned in an eligible program, or – Be accepted on transfer.

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• An institution must attribute to the current award year any credit or clock hours earned at other institutions that were earned in a summer crossover payment period.

• This requirement applies even though the institution does not have a summer payment period.

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EXAMPLE – credit hour• Current institution defines academic year, in part,

as 24 semester hours.• Student’s transcript shows earned 6 hours in the

summer term and 12 hours in the fall semester.• Transfer student received $2,000 of $4,000

Scheduled Award at prior institution for the fall term and no payment for summer from the current award year.

• At the current institution, the student is considered to have earned 18 semester hours in the award year: 6 from summer and 12 from fall.

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EXAMPLE – clock hour• Current institution defines academic year, in part, as

900 clock hours.• Student’s transcript shows earned 600 clock hours in

the period from June 15 to September 30.• Transfer student received $3,000 of $4,000 Scheduled

Award at prior institution for the fall term and no payment for summer from the current award year.

• At the current institution, the student is considered to have earned 600 clock hours in the award year since the institution confirmed that the first payment period was a crossover payment period.

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Transfer student

• No requirement to apply additional information to disbursements for prior payment period in award year

• For example— – Assumption method: a payment is reported

late to NSLDS. – Hours-earned method: a transcript is received

indicating student earned additional hours in the award year at another institution.

• In clock-hour programs, a payment consisting of funds from a first and second Scheduled Award, only for a transfer student

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Nonapplicable hours

• In determining eligibility for a second Scheduled Award in an award year, may not use hours based on:– Advanced Placement (AP) programs– International Baccalaureate (IB) programs– Testing out, life experience, or similar

competency measures• Are not earned by attendance in the award year

§690.67(d)56

Nonapplicable hours

• The equivalencies of reduced credit and noncredit remedial coursework do count toward determining eligibility for a second Scheduled Award in an award year.

• Any equivalent hours in excess of the 30 semester hours, 45 quarter credits, or 900 clock hours do not count unless they are equivalent hours of ESL coursework.

• In other words, reduced credit and noncredit remedial coursework does not count if the equivalent hours do not count toward determining Title IV eligibility.

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Special circumstances

• May waive requirement to be enrolling in hours attributable to the second academic year in the award year to pay from second Scheduled Award

• Must be due to circumstances beyond the student’s control

• Must be determined and documented on individual basis

§690.67(c)

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Special circumstances

• May include circumstances such as illness or classes not offered

• Does not include withdrawing to avoid a grade or failing to register for offered class

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Reminders for 2010-11 and subsequent years

• Must pay eligible students, including less-than-half-time for first Scheduled Award

• No concept of headers and trailers• Cannot ignore payment periods, for example,

crossovers or intersessions:– Must pay eligible students in any payment period

in an award year• Must implement “two Pells” regardless of software

capabilities, even if requires manual interventions for crossover or other payment periods

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Contact Information

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• Phone: 202 502-7502• Email: [email protected]• Fax: 202 502-7874

mailto:[email protected]

two pells in one award year

Documents

payment period of award

award yearmust

award year2010

award yearthrough

award yearsmay

crossover payment periods2009

maximum scheduled award

minimum award calculation