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Getting the Most out of Year-Round Federal Pell Grants

Learn about the legislative background and general requirements for Year-Round Pell Grants, as well as the changed rules and operational considerations. Gain insights from a school's perspective on maximizing Pell Grant benefits.

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Getting the Most out of Year-Round Federal Pell Grants

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  1. Session #15 Getting the Most out of Year-Round Federal Pell Grants Aaron Washington, Marie Fitzpatrick, and Daniel Barkowitz U.S. Department of Education 2018 FSA Training Conference for Financial Aid Professionals November 2018

  2. Agenda • Legislative Background • General Requirements • Changed Federal Pell Grant (Pell Grant) Rules • Policy Examples • Year-Round Pell Operational Considerations • One School’s Perspective on Year-Round Pell Grant

  3. Legislative Background • The Consolidated Appropriations Act of 2017 allows a student to receive Federal Pell Grant funds up to 150% of the student’s Scheduled Award for an award year (AY) • Effective beginning with the 2017-18 award year • DCL GEN 17-06 issued June 19, 2017

  4. General Requirements • Student must be otherwise eligible to receive Pell Grant funds for the payment period • Student must be enrolled at least half-time in the payment period for which the student received the additional Pell Grant funds • Additional Pell Grant will be included in the student’s 600% maximum Pell Grant Lifetime Eligibility Used (LEU)

  5. General Requirements • Payment period may include awards from both the initial Pell Grant Scheduled Award and from the additional Pell Grant award • When the calculated award for a payment period is greater than the remaining balance of an initial Scheduled Award, the award for the payment period is the remaining balance plus an amount from the additional Pell Grant award

  6. Differences from Two Pell Grants in an Award Year • No acceleration requirement • No requirement to place a crossover payment period in the award year that produces the largest Pell Grant award

  7. Changed Federal Pell Grant Rules • Scheduled Award Limitation • Enrollment Status

  8. Scheduled Award Limitation • Old: Student may receive only one Scheduled Award for an award year • New: Student may receive up to one and one-half of a Scheduled Award for an award year

  9. Enrollment Status • Old: Less-than-half-time enrollment eligible at all times • New: Must be enrolled at least half-time to receive the additional award

  10. One Term—Additional Pell Grant Amount • When the calculated award for a payment period is greater than the remaining balance of the initial Scheduled Award, the award for the payment period is the remaining amount of the initial Scheduled Award plus the Additional Pell Grant amount • Awarded as one amount • Reported to COD as one amount

  11. Semester Example • Assume student’s 2018-19 Scheduled Award is $5,545 based on an EFC of 550 and a COA of $10,590 Summer 2018 (assigned to the 2018-19 AY) Three-Quarter-Time Award - $2,079.50 which is 37.5023% of the Scheduled Award Fall 2018 Full-Time Award - $2,772.50 which is 50.0000% of the Scheduled Award Total Percent of Initial Scheduled Award is 87.5023% Spring 2019 Full-Time Award - $2,772.50which is 50.0000% of the Scheduled Award**

  12. Semester Example **The additional Pell Grant award cannot exceed 50% of a student’s Pell Grant Scheduled Award. In the previous example, the Spring 2019 Pell award is made up of 12.4977% ($693) remaining from the initial Pell Grant Scheduled Award and 37.5023% ($2,079.50) from the additional Pell Grant award. The student has 12.4977% ($693) remaining from the additional Pell Grant award for the 2018–19 award year. If the student had used up 100% of his Pell Grant Scheduled Award for Summer 2018 and Fall 2018, the entire Spring 2019 award amount would be from the additional Pell Grant award.

  13. Clock-Hour Example • 1125 clock-hour program that occurs entirely within the 2018-19 award year • Academic Year = 900 clock-hours/26 weeks • Student’s Scheduled Award is $6,095 for 2018-19 225 hours/6.5 weeks$1,523.75 450 hours/13 weeks$3,047.50 450 hours/13 weeks$3,047.50 2018-19 Award Year 125% 2018-19 AY

  14. Determining Award Year for Payment Pay as Trailer from the Additional Pell Grant for 2018-19 or Header from the Initial Scheduled Award for 2019-20 Paid as Header from Initial Scheduled Award for 2018-19 Fall 2018Full-Time 50.0000% $3,047.50 Spring 2019Full-Time 50.0000% $3,047.50 Summer 2019Half-Time 25.0041% $1,524 Summer 2018Less-Than- Half-Time 12.5020% $762

  15. Optional Recalculation Examples • Conditions • Student is only eligible for additional Pell Grant award • Student enrolls in two 3 credit-hour courses prior to add/drop date for the term • Institution’s policy is to recalculate a student’s Pell Grant award up to the add/drop date for the term

  16. Optional Recalculation Examples • Results A • Student begins attendance in all classes • After add/drop date, student drops one 3 credit-hour course • Student is still considered half-time and eligible for the additional Pell Grant disbursed

  17. Optional Recalculation Examples • Results B • Student begins attendance in all classes • Prior to add/drop date, student drops one 3 credit-hour course • Student is considered less-than-half-time and is not eligible for the additional Pell Grant

  18. Optional Recalculation Examples • Results C • Student begins attendance in all classes • After add/drop date, student drops one 3 credit-hour course • The initial calculation of the student’s Pell Grant occurs subsequent to the “add/drop” date of the term • The institution must use the student’s enrollment status on the date of the initial calculation, which is less-than-half-time, and the student is not eligible for the additional Pell Grant

  19. Required Recalculation Module Example • Standard term, semester-hour program with a summer term comprised of two modules • Student is enrolled half-time during summer 2019 • 100% of 2018-19 initial Scheduled Award has been paid for Fall/Spring • Payment for the payment period will be from additional 2018-19 Pell Grant Summer 2019 Summer 1 Summer 2 3 credits 3 credits 2019-20 2018-19 Student withdraws from 3 credits from module 2 Pell recalculation date Disbursement made

  20. Required Recalculation Example-Conclusions • Student was paid half-time Pell award based on enrollment in 6 credits as of the Pell Recalculation Date (PRD) • Pell recalculation/COD adjustment necessary • Withdrawal from 3 credits from summer 2 was after the PRD but the student will not have begun attendance in all credits on which the Pell Grant payment was based • A similar situation would exist if the student did not withdraw from the 3 credits from summer 2 but simply failed to begin attendance in them • Student is now less-than-half-time and may not receive payment from 2018-19 additional Pell Grant • Payment may be made from the initial 2019-20 Scheduled Award

  21. Year-Round Pell Grants Operational Considerations • Additional Eligibility Indicator (AEI) • Total Eligibility Used (TEU) calculation • Tools in COD to help identify Year-round Pell Grant issues • Potential Overaward Process (POP) Example • Setting the AEI Correctly • Operational Reminders

  22. Additional Eligibility Indicator • The AEI is the sole means of confirming Year-round Pell Grant eligibility • The AEI is an optional data element, and does not need to be submitted for ineligible students, but may be submitted as “false” • Must be “true” to certify eligibility between 100 -150% • Only submit as “true” if student is eligible for Year-round Pell Grant

  23. Total Eligibility Used Calculation • The TEU is the amount of Pell Grant disbursed across all schools in one AY • Especially important when you are calculating remaining need for transfer students • If AEI = “true”, TEU should be > 100% of the student’s Scheduled Federal Pell Grant (SFPG) in the AY, across schools • COD edits against the TEU, and the AEI value alters the TEU maximum calculation

  24. Total Eligibility Used Calculation • If the AEI is not submitted, or is = “false” at all schools in the AY, and actual disbursement amount > $0 • TEU Max = 100% + |Net of Closed School Adjustments for AY| • If the AEI is = “true” at any school in the AY, and actual disbursement amount > $0 • TEU Max = 150% + |Net of Closed School Adjustments for AY|

  25. Identifying Year-round Pell Grant Issues • COD edit logic is altered by the value of the AEI for the following edits: • Disbursement Warning Edit 65 • Disbursement Warning Edit 68 - POP • Award Level Rejecting/Correcting Edit 172 • Award Level Rejecting/Correcting Edit 173 • Award Level Warning Edit 174 • Award Level Warning Edit 175

  26. Identifying Year-round Pell Grant Issues • Don’t ignore the edits returned in responses from COD!* • Disbursement Warning Edit 68 – POP -- is a clue the AEI may need to be set to “true” • Award Level Edits 173, 174, 175 all point to a change in the AEI from “true” to “false” and the award/disbursement are no longer consistent with that determination. • * COD Technical Reference Volume 2, Section 4

  27. Identifying Year-round Pell Grant Issues • Review reports with the AEI* • Pell Grant POP Report (column V in CSV format) • POP is the #1 clue the AEI is not correctly set for the student • Pell Grant Multiple Reporting Record (MRR) (position 449) • Pell Grant Reconciliation Report Record (position 97) • Pell Grant Year-to-date Record (position 251) • * COD Technical Reference Volume 6, Section 8

  28. POP Example 2018-19 School A • Term-based, Formula 1 • Trans. 01, EFC= 0 • 2018-19 COA $32,500 • SFPG = 6095 • Eligibility Used =125.005% • AEI= “true” School B • Term-based, Formula 1 • Trans. 03, EFC= 633 • 2018-19 COA $19,920 • SFPG = 5445 • Eligibility Used =24.995% • AEI not submitted TEU = 150%

  29. POP Example Withdraws 1/6/19 School A COD shows 125.005% of the Scheduled Award used, $6,857 disbursed. School A Summer Fall Semester Spring Semester School B School B Disburses remaining ($5,445 X 24.995%) = $1360.97 Spring Semester Fall Semester Non-Attendance Begins Attendance 1/9/19 School A –Return to Title IV (R2T4) calculation on 1/17/19 resulting in Spring Pell Grant award and disb. reduction so EU = 83.3333% ($5,079.16) for School A. Submits all updates to COD including changing the AEI from “true” to “false” so TEU is now 108.3283%.

  30. POP Example Consequences from the POP example • COD Response returns • Warning edit 68 returned (POP) • Multiple Reporting Record (MRR) sent to both school A & B • Pell Grant POP Report is sent to both school A & B • Negative pending 30 day counter begins • POP Deobligation -- 2/18/19 all Pell Grant disbursements reduced to $0 • School A funding is reduced by $5,079.16 • School B funding is reduced by $1,360.97

  31. Setting the AEI Correctly • Update procedures for R2T4 calculations, non-attendance, and all other recalculated disbursements • When AEI is changed from “true” to “false”, always recalculate and submit award and disbursement changes if necessary • When award and disbursements are changed, always evaluate if AEI needs to be changed to/from “true”/“false” • If you reduce the student’s award and disbursement to $0, change the AEI from “true” to “false” • School disbursing any part of 100%-150% (reliant on AEI= “true”), also submit AEI = “true” • Don’t wait until year-end to correct the AEI

  32. Operational Reminders • One Pell Grant per student, per school, per award year • There is no “First Pell” and “Second/Additional Pell” in COD, regardless of how it might be structured in your system • If software product does not package/disburse in cents, the 2018-19 maximum at the 150% limit is $9,142 • $9,143 exceeds the maximum limit of $9,142.50 • Always calculate remaining Eligibility Used in percentages!

  33. Operational Reminders • Setting the AEI=true for a student can increase the student’s Pell Grant eligibility across all schools for that award year • Schools may not know their COD submissions are being edited at the higher limit if another school set the AEI=true

  34. One School’s Perspective on Year-Round Pell Grant Daniel T. Barkowitz Valencia College

  35. Year-Round Pell Grant: One College’s Experience • About Valencia College • Orange and Osceola counties’ State College • Eight campuses (soon to be nine) • In 2017-18, enrollment was 61,668. FTE was 31,383. • 34.7% FT / 65.3% Part-time • Received 72,519 FAFSAs in 2017-18 • 21,920 Pell Grant Recipients in 2017-18 • $76.9M in Pell Grant received by students in 2017-18 • 62% of Pell Grant Recipients have a 0 EFC

  36. Valencia College Outreach efforts • Student communication • Fall – Letter to all enrolled students receiving Pell Grant • Spring – Targeted letter to segmented Pell Grant populations: • Enrolled Fall and Spring FT  encouraged FT summer enrollment • Enrolled Fall and Spring LTFT but might benefit from more Pell Grant in Summer  encouraged greater summer enrollment (concept of 150% Pell Grant) • Enrolled Fall and/or Spring, but not enough hours to benefit from new Pell Grant, encouraged summer enrollment

  37. Valencia College – Other outreach • Advisor / Counselor Communication • Faculty Communication • Staff / Leadership Communication • Public and Social Media Outreach

  38. Financial Aid History at Valencia

  39. Impacts of Summer Pell Grant at Valencia College

  40. Pell Grant Demographics at Valencia College

  41. Practical Considerations for Valencia College • System Considerations • Readiness of Pell Grant Awarding • System Errors / Delays • Rounding • LEU • Summer is a Trailer for Valencia • How to handle student variation?

  42. AEI at Valencia College • Automatic semester by semester roll-forward • Created summer records for all • Automatic Pell Grant Awarding • AEI created based on Awarding • Post-summer Clean-up Campaign for students ≤ 100% • Net result: • 3,040 students had Pell Grant AEI = “Yes”, and TEU > 100% (13.86% of our Pell Grant population) • Average TEU for these students was 126.14% • Average increased Pell Grant was $1,820.12. • Total increase for Year-Round Pell Grant: $5.53M

  43. Resources • June 19, 2017 DCL -- GEN-17-06 -- Implementation of Year-Round Pell Grants • June 20, 2017 EA -- provides preliminary COD System implementation information and school processing timeline • October 4, 2017 EA – The COD 16.2 Implementation documentation • COD Technical Reference • Volume 2, Section 4 -- Edits • Volume 6, Section 8 -- Reports

  44. Contact Information Aaron Washington U.S. Department of Education Office of Postsecondary Education, Policy Development Group Washington, DC Aaron.Washington@ed.gov Marie Fitzpatrick U.S. Department of Education Federal Student Aid Business Operations Grants Division Chicago, IL marie.fitzpatrick@ed.gov Daniel T. Barkowitz Valencia College Assistant Vice President Financial Aid and Veterans’ Affairs dbarkowitz@valenciacollege.edu 407-582-1458 Direct 407-582-1457 Office

  45. Questions and Answers

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