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Federal Pell Grant Program - Calculating the Federal Pell Grant

AwardYear: 1998-1999
EnterChapterNo: 4
EnterChapterTitle: Federal Pell Grant Program
SectionNumber: 2
SectionTitle: Calculating the Federal Pell Grant
PageNumbers: 9-44

In this section, we will review the basic steps in calculating a Pell
award. These steps, in effect, adjust the Pell award to take into
account the student's cost of attendance (COA) for the academic
year, the student's enrollment status, the ability to contribute to his or
her education (EFC), the amount of coursework taken in the award
year, and the length of the student's enrollment during the academic
year.

[[See Section 3 for special considerations]]
Pell calculations for most programs can be performed by following
the steps in this section. However, there are some situations that
require further adjustments. These situations are discussed in
Section 3, "Special Program Considerations." Check that section to
see if these special considerations apply to any of the programs at
your school.


BASIC CONCEPTS
----------------

[[Scheduled Award]]
A primary concept in the Federal Pell Grant Program is the
"Scheduled Award," which is the amount a student receives during
an academic year for a given COA and EFC, assuming the student is
enrolled full time for a full academic year. For example, a
student with a COA of $6,000 for a full academic year and a nine-
month EFC of 0 would have a Scheduled Award of $2,700 (the
maximum for 1997-98). A student will receive less than a full
Scheduled Award if he or she is enrolled less than full time or is
enrolled for less than a full academic year. For instance, if a student
attends two semesters as a half-time student at a semester school, the
student would receive half a Scheduled Award. Or, if the student
enrolled full time in a program late in the award year and only
completed half of an academic year in that program, he or she would
receive no more than half of a Scheduled Award.

The concept of the Scheduled Award has always been important
because it has limited the student to a maximum payment for an
award year. The Scheduled Award cannot be exceeded, even if the
student transfers to another school or attends for more than one
academic year in the award year (for example, by attending a
summer session).

[[Annual award]]
The annual award is the maximum amount (from the appropriate
Payment or Disbursement Schedule) a student would receive during
a full academic year for a given enrollment status, EFC, and COA.
Note that for a full-time student, the annual award will be the same
as the Scheduled Award.

[[Award year]]
The award year begins on July 1 of one year and ends on June 30 of
the next year.

[[This file contains the graphic "1998-99 Award Year" on
page 4-10 in Portable Document Format (PDF). It can be viewed with
version 3.0 or greater of the free Adobe Acrobat Reader software.]]

As already noted, a student cannot be paid more than one Scheduled
Award for an award year. The regulations provide that students may
receive up to a second Scheduled Award during a single award year
if the Department determines that sufficient funds are available.
There is no funding for payment of a second Scheduled Award for
1998-99; therefore, students will not be able to receive more than
one Scheduled Award for the 1998-99 award year.

[[Academic year]]
The academic year is used to measure the amount of coursework the
student will complete during the award year. The school must define
the academic year for each program of study; once it has defined the
academic year for that program, it must use that definition for all
SFA purposes. A school's defined academic year must contain at
least 30 weeks of instructional time; within the weeks of the
academic year, a full-time student must be expected to complete at
least 24 semester or trimester hours or 36 quarter hours at a school
measuring program length in credit hours, or at least 900 clock hours
at a school measuring program length in clock hours. The General
Provisions regulations provide a definition of academic year and
allow schools to apply for a waiver of the 30 week minimum. (See
Chapter 3, Section 1 for more information on the definition of
academic year.)

[[Calendar weeks vs. weeks of instructional time]]
Note that for the Pell calculations, the school will need to determine
how many weeks of instructional time are in the program or
academic year, or in each term if the school uses terms. In some
cases, the weeks of instructional time will not be the same as the
number of calendar weeks. Chapter 3 explains how to determine
weeks of instructional time. A school should be careful not to use
calendar weeks when it should be using weeks of instructional time.

[[Different academic year for different programs]]
Depending on the academic nature of the programs involved, a
school may define an academic year differently for different
programs of study. For instance, it may set an academic year of 900
clock hours and 30 weeks in one program and 1,200 clock hours and
40 weeks in another. The school may even use a different academic
year for an evening program, as opposed to a day version of the same
program, as long as each academic year meets the minimum
requirements established for an academic year. If the school
establishes separate versions of a program, with different academic
years, but allows individual students to take courses in both versions,
the school must be able to determine which program the student is
actually enrolled in.

[[Standard term and nonstandard term]]
Term-based schools may have either standard terms or nonstandard
terms. Standard terms are semesters, trimesters, or quarters,
as these terms are traditionally used. In traditional usage, an
individual semester or trimester provides approximately 15 weeks of
instruction and full-time is defined as at least 12 semester or
trimester hours; the program's academic calendar generally consists
of three terms, one each in fall, spring, and summer. In traditional
usage of the term quarter, an individual quarter provides
approximately 10 to 12 weeks of instruction and full-time is defined
as at least 12 quarter hours; the program's academic calendar
generally includes three quarters in the fall, winter, and spring and
often a summer quarter as well. Any other type of term is a
nonstandard term. Nonstandard term has sometimes been
used to refer only to terms of unequal length, but under this
definition terms of equal length may be nonstandard terms.


CHOOSING A FORMULA
---------------------

[[34 CFR 690.63(a)]]
The regulations specify five different formulas for calculating Pells;
the formula the school uses depends on the type of program.
However, each formula has the same basic steps. Once the school
chooses a formula, the school must use that same formula for all
students in the same program of study for the entire award year.

[[Formula 4 or 5]]
Three of the formulas (Formulas 1, 2, and 3) are used for credit-hour,
term-based programs. Of the remaining two formulas, Formula 4 is
used for all clock-hour programs and for nonterm credit-hour
programs, and Formula 5 is used for students enrolled only in
correspondence courses (not including residential components of
correspondence programs). Calculations for correspondence
programs are discussed separately in Section 3 of this chapter.

[[Formula 3]]
A school can use Formula 3 to calculate Pells for any credit-hour,
term-based program. However, if the program meets certain
requirements, Formula 1 or 2 may also be used. If the program meets
the requirements for more than one formula, the school may choose
which formula to use.

[[Formula 1 or 2]]
To qualify for Formula 1 or 2, the program must

- be offered in semesters, trimesters, or quarters (standard terms);

- use an academic calendar that includes two semesters or trimesters
or three quarters;

- not have overlapping terms; and

- define full-time enrollment for each term as at least 12 credit
hours.

If the program provides at least the statutory minimum of weeks for
an academic year (30 weeks of instructional time, unless the school
has received a waiver from the Department) in the fall through spring
terms, Formula 1 may be used. If it does not provide this minimum
in the fall through spring terms, Formula 2 may be used. Note that in
both cases the school may decide to use Formula 3.

[[Combining terms]
A school may combine terms to allow a program to qualify for
Formula 1 or 2. For example, a school with several summer terms for
which full-time enrollment is less than 12 credit hours may combine
these terms into a single term for which full-time enrollment is 12
credit hours so that Pells for students in the program can be
calculated under Formula 1. A school may also combine a short term
with a semester in order to have two semesters as required for
Formulas 1 and 2, as the following example shows.


[[This file contains the graphic on page 4-13 in
Portable Document Format (PDF). It can be viewed with version
3.0 or greater of the free Adobe Acrobat Reader software.]]


[[Calendar changes]]
Because the academic calendar for a program must fall within
specific limits for the school to be able to use Formula 1 or 2, if the
calendar for the program changes, the school may have to check
again to see if it can still use Formula 1 or 2 for the program.

[[This file contains the graphic on page 4-13 in
Portable Document Format (PDF). It can be viewed with version
3.0 or greater of the free Adobe Acrobat Reader software.]]


No matter what formula is used, there are five basic steps to
calculating a Pell award:

STEP 1: Determine Enrollment Status

STEP 2: Calculate Cost of Attendance

STEP 3: Determine Annual Award

STEP 4: Determine Payment Periods

STEP 5: Calculate Payment for a Payment Period

We will now discuss each of these steps in more detail. Appendix A
contains step-by-step summaries for each of the five formulas.


DETERMINING ENROLLMENT STATUS
----------------------------------

The student's enrollment status is based on the number of credit or
clock hours for which the student enrolls. It determines which cost
components are used to calculate the student's Pell COA and, for
some programs, establishes which Payment or Disbursement
Schedule is used to determine the student's annual award.

[[Enrollment status change during year]]
If a student's enrollment status changes during the year, the school
may have to recalculate the student's Pell payment based on the
student's new enrollment status. Section 5 of this chapter explains
when a school is required to recalculate due to a change in
enrollment status.

For credit-hour programs with terms, the school must determine
whether the student is enrolled full time, three-quarter time, half
time, or less than half time. This allows the school to determine
which Payment or Disbursement Schedule it needs to use. For clock-
hour programs and for credit-hour programs without terms, the
school only needs to determine if the student is enrolled at least half
time or less than half time, so that it can calculate the COA correctly.

[[This file contains the chart "Enrollment Status Minimum
Requirements" on page 4-15 in Portable Document Format (PDF).
It can be viewed with version 3.0 or greater of the free Adobe Acrobat
Reader software.]]

[[School defines full-time enrollment]]
If the school has standard terms (i.e., semesters, trimesters, or
quarters), it may establish its own standards for determining
enrollment status for each of its academic programs, provided its
standards meet the minimum requirements defined in the regulations,
as shown in the chart above. Note that the school's academic standard
may differ from the enrollment standard used by the financial aid
office for SFA purposes. For example, the school may define full
time as six hours during the summer; however, the financial aid
office uses 12 hours as full-time for all terms including the summer
term. The school must apply its standards consistently to all students
enrolled in the same program of study, for all SFA purposes.

[[Enrollment status for nonstandard terms--34 CFR 690.63(d)(1)(ii)]]
If a school's academic calendar contains nonstandard terms, the
school must determine the student's enrollment status for each
nonstandard term. To determine enrollment status for a nonstandard
term, the school must first determine the number of credit hours
required for full-time enrollment status using the following formula:

Weeks of instructional time in the nonstandard term
Credit hours in
the academic X --------------------------------------------
year Weeks of instructional time in the
program's definition of academic year

If the resulting number is not a whole number, it is rounded up to the
next whole number. After the school has determined the number of
credit hours required for full-time enrollment, the school can then
determine the less-than-full-time status for the nonstandard term
using the following formula:

Credit hours student takes in the nonstandard term
--------------------------------------------------------------------
Credit hours required for full-time status in the nonstandard term

The resulting fraction is then matched with the appropriate less-than-
full-time status classification. The fraction must equal or exceed the
enrollment status classification. For example, two-thirds would
correspond to a half-time enrollment status. The following examples
illustrate how the enrollment status for a nonstandard term is
determined.

Nonstandard term examples

Anner enrolls in a two year program at Bylsma Conservatory.
Bylsma Conservatory's academic calendar consists of four terms,
each of which provides 8 weeks of instructional time. The school
has defined the academic year for Anner's program as 40 quarter
hours and 32 weeks of instructional time. Anner enrolls for 6
quarter hours in the first term and 10 quarter hours in the
remaining three terms.

Bylsma determines the number of credit hours required for full-
time enrollment in the term as follows:

8 weeks instructional
time in term
40 quarter X ----------------------- = 10 quarter hours
hours 32 weeks instructional
time in academic year

Therefore, a student must complete 10 quarter hours each term to
be a full-time student. For the first term, Bylsma must determine
Anner's enrollment status as follows:

6 quarter hours / 10 quarter hours = .6

Because .6 is less than three-quarters (.75) but more than
one-half (.5), Anner's enrollment status in the first term is half
time. Anner is enrolled full time (10 hours) in the remaining terms.
_________________

Owen enrolls in the education program at Hart University that has
a short 4-week term between two 15-week terms. Hart does not
combine the 4-week term with one of the longer terms for
purposes of the Pell calculation. The academic year for the
program is 34 weeks of instructional time and 24 semester hours.
Owen enrolls for 6 hours in the first and third terms and 3 hours in
the second term.

Hart must determine the number of credit hours required for full-
time enrollment in the first and third term as follows:

15 weeks instructional
time in term
24 semester X ----------------------- = 10.58
hours 34 weeks instructional
time in academic year

A student must enroll in 11 semester hours (rounded up from
10.58) in the first and third terms to be full-time. The requirement
for full-time enrollment for the second term is determined as
follows:

4 weeks instructional
time in term
24 semester X ----------------------- = 2.82
hours 34 weeks instructional
time in academic year

A student must enroll in 3 semester hours (rounded up from 2.82)
in the second term to be full-time.

Note that Owen is enrolled full-time in the second term. To
determine Owen's enrollment status for the other two terms, the
school must compare the number of hours he is enrolled with the
number required for full-time enrollment:

6 semester hours / 11 semester hours = .54

Because .54 is less than three-quarters (.75) and greater than
one-half (.5), Owen is enrolled half-time in the first and third
terms.

If the school has combined two or more terms into a single term for
purposes of the Pell calculation, the student's enrollment status is
based on the combined number of hours the student is enrolled in for
all the component terms of the combined term. Note that if the
student later does not begin attendance in one of the parts of the
combined term, the school must recalculate the student's award (see
Section 5 for more on recalculations).


[[This file contains the graphic on page 4-18 in Portable
Document Format (PDF). It can be viewed with version 3.0 or greater
of the free Adobe Acrobat Reader software.]]


[[Step 1 summary by formula]]
STEP 1: Determine Enrollment Status

Formula 1, Formula 2, Formula 3:
Full time, three-quarter time, half time, or less than half time

Formula 4:
At least half time or less than half time


CALCULATING THE COST OF ATTENDANCE
---------------------------------------

The components used to calculate a student's Pell COA are the same
as those used to calculate the COA for the other SFA Programs. (See
Section 3 of Chapter 2 for a list of these components.)

[[Cost for full time for full academic year]]
Although schools must use the same components for calculating a
student's cost for the Federal Pell Grant Program as for the other SFA
Programs, the Pell COA is always based on costs for a full-time
student for a full academic year. That is, the amount
of each component must always be a full-time, full academic year
cost.

[[Less than half time]]
If the student is enrolled less than half time, the aid administrator can
include in the Pell COA only those cost components allowable for
less-than-half-time enrollment. (See Chapter 2 for more information,
and for other restrictions on COA components.)

For students who are less than half time, COA can include only:

- tuition and fees;

- an allowance for books and supplies;

- transportation (but not miscellaneous expenses); and

- an allowance for dependent care expenses

The major difference between the COA for Pell and for other SFA
Programs is that under Pell, costs for programs or enrollment periods
longer or shorter than an academic year must be prorated so that they
apply to one full academic year.1 This is true for both components
of the academic year definition, the number of weeks and the number
of clock/credit hours: If the program or period of enrollment differs
from the defined academic year in either component, the costs must
be prorated to determine the Pell COA.

1 Note that in many cases prorating the COA will not affect the
amount of Pell the student receives. However, you must enter
accurate amounts when reporting disbursements (see Section 7).

[[Two proration methods]]
Schools may choose between two proration methods. A school may
either prorate the entire cost using one fraction, or split the COA into
credit or clock hour costs and week costs, and prorate the two types
of costs separately. A school may use whichever method it prefers.

[[Single fraction method]]
To prorate the COA by one fraction, the school must compare two
fractions and multiply the COA by the lesser of the two. There is one
fraction for each component of the academic year definition. One
fraction is calculated by dividing the number of credit or clock hours
in the program's academic year by the hours for which the costs
apply; the other by dividing the number of weeks in the program's
academic year by the weeks for which the costs apply:

Credit/clock hours in program's definition of academic year
----------------------------------------------------------------
Credit/clock hours for which costs apply


Weeks of instructional time in program's definition of
academic year
----------------------------------------------------------
Weeks of instructional time for which costs apply

The COA is multiplied by the lesser of these two fractions to
determine the student's Pell COA. This Pell COA must be used when
determining the amount of the student's annual award. Note that in
some cases the prorated COA calculated by this method will be the
same as the original, nonprorated COA: If for one of the components
of the academic year the program or period of enrollment for which
costs apply is the same as the academic year, one of the fractions will
be equal to one.

Following are some examples showing how to determine full-time,
full-year costs.

Example 1

Woodhouse College has fall and spring semesters, each of which
provides 14 weeks of instructional time. Thus, the two semesters
provide 28 weeks of instructional time, shorter than the statutory
requirement for an academic year. Woodhouse has defined the
academic year as 24 semester hours and 30 weeks of instructional
time. The average costs for a full-time student attending both
semesters are as follows:

Tuition and Fees $2,600
Room and Board 2,700
Books, Supplies,
Transportation,
Miscellaneous
Expenses 880
Loan Fees 100
---------------------------------------------
TOTAL $6,280

Because the two semesters do not provide a full 30 weeks of
instructional time, the cost for a full-time student to attend both
semesters must be prorated to determine a full academic year
COA.

Woodhouse compares the two fractions:

24 semester hours in academic year definition
---------------------------------------------------
24 semester hours in fall through spring terms

30 weeks instructional time in academic year definition
-----------------------------------------------------------
28 weeks instructional time in fall through spring terms

Because the credit hour fraction (24/24) is the lesser of the
two, it would be used to prorate the cost; since it is equal to 1
the Pell COA for the program is the same as the non-prorated
COA: $6,280.
___________________

Example 2

Bylsma Conservatory offers a two year program; the academic
calendar for this program consists of four 8-week terms. The
school has defined the academic year for this program as 40
quarter hours and 32 weeks of instructional time. Bylsma charges
the student for the entire program when he or she begins. The
average cost for a full-time student for the entire program is:

Tuition and Fees $8,900
Room and Board 8,600
Books, Supplies,
Transportation
Miscellaneous
Expenses 4,540
Loan Fees 240
-------------------------------------------
TOTAL $22,280

Because the cost is for longer than an academic year, Bylsma must
determine the cost for an academic year by prorating the full cost.
The school compares the two fractions:

40 quarter hours in academic year
---------------------------------------
80 quarter hours in program

32 weeks instructional time in academic year
-----------------------------------------------------
64 weeks instructional time in program

The credit-hour fraction and the week fraction are both equal to
one-half. Therefore, the school may prorate the entire cost using
either fraction. Multiplying $22,280 by one-half, the school ends
up with a prorated cost of $11,140.
______________________

Example 3

Miranda has enrolled as a less-than-half-time student in a 650
clock hour, 28 week program at Sarven Technical Institute. Sarven
has defined the academic year for the program as 900 clock hours
and 30 weeks of instructional time. The average costs for the
entire program are as follows:

Tuition and Fees $1,800
Room and Board 2,500
Books and Supplies 100
Transportation 100
Miscellaneous
Expenses 200
----------------------------------------------
TOTAL $4,700

Because the program is shorter than an academic year in length,
the costs for the program must be prorated to determine the costs
for an academic year. Also, because Miranda is attending less than
half time, the COA cannot include all components. The cost using
only the components allowed for a less-than-half-time student
(tuition and fees, books and supplies, and transportation) is
$2,000. Sarven compares the two fractions:

900 clock hours in academic year
------------------------------------
650 clock hours in program

30 weeks instructional time in academic year
-------------------------------------------------
28 weeks instructional time in program

Of the two fractions, the smaller is 30/28

Sarven multiplies the full cost (using only the components allowed
for a less-than-half-time student) by this fraction:

30 weeks instructional time
in academic year
$2,000 X ------------------------------ = $2,143
28 weeks instructional
time in program

Therefore, Miranda's Pell COA is $2,143.

[[Split proration method]]
As mentioned earlier, the school may split the COA into two parts
and prorate the two parts separately, if it chooses. The school
multiplies costs associated with credit or clock hours (tuition and
fees, books and supplies, loan fees) by the credit or clock hour
fraction discussed previously, and multiplies costs associated with
weeks of instructional time (room and board, miscellaneous
expenses, disability expenses, transportation, dependent care, study
abroad, reasonable costs associated with employment as part of a
cooperative education program) by the week fraction discussed
previously. The student's Pell COA is the sum of the two types of
prorated costs.

[[Actual vs. average cost]]
While schools have the option of determining actual costs for
individual students, most schools prefer to determine the COA by
using an average cost for a group of similar students. (For example, a
school may have different charges for different academic programs
or different charges for in-state vs. out-of-state students.)

[[Step 2 summary by formula]]
STEP 2: Calculate Pell COA Tuition
Formula 1:
Full-time, full academic-year costs
Formula 2:
Full-time, full academic-year costs
Cost for fall through spring terms prorated. If fall through
spring terms provide the same number of credit hours as are
in the academic year definition, prorated COA is the same as
nonprorated COA.
Formula 3 and Formula 4:
Full-time, full academic-year costs
Cost for program or period not equal to academic year
prorated. Two fractions compared:

Hours in program's definition of academic year
---------------------------------------------------
Hours to which the costs apply

Weeks of instructional time in program's
definition of academic year
-----------------------------------------
Weeks of instructional time in the enrollment
period to which the costs apply

The entire cost is multiplied by the lesser of the two fractions
to determine Pell COA.


DETERMINING THE ANNUAL AWARD
--------------------------------

Once the school has figured the student's COA, the financial aid
administrator can use the Payment Schedule or appropriate part-time
Disbursement Schedule to look up the student's annual award. As
mentioned earlier, the annual award is the maximum amount a
student would receive during a full academic year for a given
enrollment status, EFC, and COA. For students enrolled in clock-
hour or nonterm credit-hour programs, the annual award is always
determined from the full-time Payment Schedule, even if the student
is attending less than half time.

Please remember that you do not have the discretion to refuse
to pay an eligible part-time student.

[[Step 3 summary by formula]]
STEP 3: Determine Annual Award

Formula 1, Formula 2, Formula 3:
If the student's enrollment status is full-time, the annual award
is taken from the full-time Payment Schedule (Scheduled
Award). If the student's enrollment status is 3/4-time, 1/2-time,
or less than 1/2-time, the annual award is taken from the
appropriate part-time Disbursement Schedule.

Formula 4:
Always taken from full-time Payment Schedule (equal to
Scheduled Award)


DETERMINING THE PAYMENT PERIODS
------------------------------------

The program's academic year must be divided into payment periods.
Pells must be paid in installments over the academic year to help
meet the student's cost in each payment period. The payment period
determines when Pell funds are disbursed and the exact amount to be
disbursed. The cash management regulations published on 11/29/96
provide a common definition of payment period for all the programs,
which replaces the definition in the Pell regulations. We will note the
changes below; these changes became effective for payment periods
beginning on or after July 1, 1997.

[[Credit-hour term program]]
For credit-hour term programs, the payment period is the term.
Under the new definition of payment period, the payment period for
a clock-hour term program is no longer a term. Instead, clock-
hour term programs are treated exactly like nonterm programs.

[[Nonterm or clock-hour programs--34 CFR 668.4(b)]]
For credit-hour nonterm programs and all clock-hour programs, the
school must define, in writing, the payment periods as measured in
clock or credit hours for each program. The regulations require at
least two equal payment periods for programs that are shorter than or
equal to an academic year or at least two equal payment periods in
each full academic year for programs longer than an academic year.

[[Less than AY]]
[[Equal to or longer than AY]]
If the program of study is shorter than an academic year, each
payment period is the period of time in which the student completes
half the credit or clock hours in the program. If the program of study
is equal to or longer than an academic year, each payment period is
the period of time in which the student completes half the credit or
clock hours in the academic year.


[[This file contains the graphic on page 4-25 in Portable
Document Format (PDF). It can be viewed with version 3.0 or greater
of the free Adobe Acrobat Reader software.]]

For a program that is longer than an academic year, if the number of
hours remaining in the final year is less than half an academic year,
the final payment period is the period of time in which the student
completes the remaining hours. If the number of hours remaining in
the final year is more than half an academic year, each payment
period in the final year is the period in which the student completes
half the remaining hours in the program. The examples on the
next page illustrate how to calculate final year payment periods in
these situations.

[[This file contains the graphic on page 4-26 in Portable
Document Format (PDF). It can be viewed with version 3.0 or greater
of the free Adobe Acrobat Reader software.]]

[[More frequent payment periods--34 CFR 668.4(b)(4)]]
Regulations also permit a school to establish more frequent payment
periods for its programs of study. For example, a school may choose
to use monthly payment periods. The payment periods must be equal
in number of credit or clock hours, except that a final payment
period for a program may be shorter than the other payment periods.

[[This file contains the graphic on page 4-27 in Portable
Document Format (PDF). It can be viewed with version 3.0 or greater
of the free Adobe Acrobat Reader software.]]

For clock-hour programs and nonterm credit-hour programs, the
payment period ends when the student has completed all the credit or
clock hours in the payment period. Because the length of a payment
period (measured in weeks of instructional time) is based on what a
full-time student is expected to complete, part-time students will take
longer than full-time students to complete each payment period.
However, as we will discuss in "Calculating the Payment for a
Payment Period," the number of weeks of instructional time that is
used in the formula to calculate the payment for the payment period
will remain the same.

[[34 CFR 668.4(b)(3)]]
For some nonterm credit-hour programs, the school does not award
credits for part of the year (or program). For example, the school
may award the student credits only after the student has completed
the entire program. The school must still determine the payment
periods as usual, but may adjust the beginning of the second payment
period to account for the student being halfway or further through
the year or program without having earned half the credits. In such
cases, the second payment period is considered to begin at the later
of the calendar midpoint between the first and last day of class or the
point at which the school considers that the student has completed
half of the academic coursework for the year or program.

[[This file contains the graphic on page 4-28 in Portable
Document Format (PDF). It can be viewed with version 3.0 or greater
of the free Adobe Acrobat Reader software.]]

[[Excused absences--34 CFR 668.164(b)(3)]]
Note that a school with a clock-hour program may take into
consideration "excused absences" in determining whether a student
has completed the hours in a payment period. The school must have
a written policy permitting excused absences, and the absences must
actually be excused--that is, the student will not be required to make
up the absences to receive the degree or certificate for the program.
The cash management regulations now provide that the school
cannot allow the excused absences to exceed 10% of the clock hours
in the payment period (or less as required by accrediting agency or
state agency policies). For example, if a school's written policy (in
accordance with its accrediting agency guidelines) allows a student
to miss up to 50 hours of a program, the school may still pay a
student who had missed 20 of the first 450 hours at the same time it
would pay a student who did not miss any hours. Note that although
the accrediting agency guidelines in this case allow the student to
miss up to 50 hours of the entire program, the school could not
excuse more than 45 hours (10% of the hours) of the payment
period.

[[Step 4 summary by formula]]
STEP 4: Determine Payment Periods

Formula 1, Formula 2, Formula 3:
Payment period is the academic term

Formula 4:
Length of payment period measured in credit or clock hours.
Minimum of 2 equal payment periods required for programs
shorter than an academic year, or 2 equal payment periods in
each full academic year (or final portion longer than half an
academic year) for programs longer than or equal to an
academic year.

CALCULATING THE PAYMENT FOR A PAYMENT PERIOD
--------------------------------------------------

Once the school has determined the payment period, it can determine
how much of the annual award the student will receive for that
payment period. A student may receive a Pell payment only for those
terms, or payment periods, in which the student is enrolled. For some
students, the total disbursements for all payment periods within the
award year will equal the amount of the Scheduled Award. However,
students who attend for less than an academic year (in either
clock/credit hours or weeks of instructional time) will not receive a
full Scheduled Award. This may occur if the student enrolls for only
part of the year, attends part time, or if the program is less than an
academic year in length. These enrollment variations are taken into
account in the calculation of the student's payment for the payment
period. The four calculation formulas discussed in this section
account for these variations differently; therefore, we will describe
the calculation for each formula separately (see page 4-11 for more
information on which formula to use).

[[Formula 1]]
For a program using Formula 1, a student will attend less than an
academic year only if he or she enrolls part time or does not enroll in
all terms in the academic year. The adjustment for part-time
enrollment is made in determining the annual award (by using the
appropriate part-time Disbursement Schedules). The adjustment for a
student not enrolling in all terms is made by dividing the annual
award evenly between the terms. If the student does not enroll in a
term, he or she will not receive that part of the award. Therefore, to
determine the payment for a payment period, divide the annual
award by the number of payment periods in the academic year (two
for semesters or trimesters, three for quarters). However, if the
school has a summer term, it may wish to use an alternate calculation
that spreads the award over the summer term as well (see "Summer
Terms" later in this section for more information).

Helen enrolls full time in Hart University in a degree program
offered in semesters. Hart University can use Formula 1 to
calculate Pells for students in this program. Helen enrolls in both
semesters in the 1997-98 award year, and her EFC is 752. The Pell
COA is $8,170.

Based on a COA of $8,170 and an EFC of 752, the full-time
Payment Schedule shows that Helen is eligible for an annual
award of $1,950.

To calculate Helen's payment for the semester, Hart divides the
annual award by the number of terms:

$1,950 / 2 = $975

Therefore, Helen's payment for each semester is $975; she will
receive the full annual award of $1,950 if she actually attends full-
time both semesters.

[[Formula 2]]
[[34 CFR 690.63(c)(3)]]
For a program using Formula 2, a student will attend less than an
academic year in credit hours only if he or she enrolls part time or
does not enroll in all terms (fall through spring) in the academic year.
As for Formula 1, the adjustment for part-time enrollment is made in
determining the annual award (by looking up the award on the
appropriate schedule). Because the fall through spring terms provide
fewer than 30 weeks of instructional time, the school must always
adjust for less than an academic year in weeks by prorating the
annual award:

Weeks of instructional time in
fall through spring terms
Annual award X ---------------------------------------
Weeks of instructional time in
program's definition of academic year

Then, to adjust for students not attending all terms, the award is
divided evenly between terms. To determine the payment for one
payment period, divide the prorated annual award by the
number of terms in the year (two for semesters or trimesters, three
for quarters). If the school has a summer term, it may use the
alternate calculation to distribute the award over all terms (see
"Summer Terms" later in this section).

Emma enrolls full time in Woodhouse College, which has two
semesters of 14 weeks each. Woodhouse College defines the
academic year for Emma's program as 24 semester hours and 30
weeks of instructional time, and uses Formula 2 to calculate Pells
for students in this program. Emma's EFC is 545, and the Pell
COA for the program is $6,505. The full-time Payment Schedule
shows that Emma is eligible for an annual award of $2,150.

Because the two terms provide less than 30 weeks of instructional
time, the annual award must be prorated:

28 weeks instructional time in
fall through spring terms
$2,150 X -------------------------------- = $2,006.67
30 weeks instructional time in
academic year definition

This prorated amount is then divided by the number of terms:

$2,006.67 / 2 = $1,003.34

Therefore, Emma's payment for the first semester is $1,003
(rounded down from $1,003.34) and her payment for the second
semester is $1,004 (rounded up because the first payment is
rounded down). Emma will receive $2,007 for her attendance in
both semesters. Note that this is less than her Scheduled Award;
she may be able to receive the remaining $143 if she enrolls in a
summer term.

[[Formula 3]]
[[34 CFR 690.63(d)3,4]]
Under Formula 3, the school also adjusts for less than an academic
year by using enrollment status in determining the annual award and
by distributing the award over terms. Because the program may use
uneven nonstandard terms, the award cannot simply be divided
evenly among the terms. Instead, the school must multiply the annual
award by a fraction representing the proportion of an academic year
the payment period contains. This procedure adjusts for the period of
enrollment that is less than an academic year either because the
student misses a term or because the terms provide less than an
academic year of instruction. To calculate a student's payment for a
payment period, the school uses the following formula:

Weeks of instructional time in the term
Annual award X ------------------------------------------
Weeks of instructional time in the program's
definition of an academic year

[[34 CFR 690.63(f)]]
If the resulting amount is more than 50% of the annual award, the
school must make the payment in at least two disbursements. A
single disbursement may never be more than 50% of the annual
award.

Anner is enrolled half time in the first 8 week term at Bylsma
Conservatory and full time in the remaining three terms. Bylsma
defines the academic year for Anner's program as 40 quarter hours
and 32 weeks of instructional time, and uses Formula 3 to
calculate Pells. Anner's EFC is 323, and the Pell COA for the
program is $11,140.

For the first term, the half-time Disbursement Schedule shows that
Anner is eligible for an annual award of $1,175. To determine
Anner's payment for the first payment period, the school uses the
following calculation:

8 weeks instructional time
in the term
$1,175 X --------------------------- = $293.75
32 weeks instructional time
in the academic year

Anner's payment for the first payment period will be $294
(rounded up from $293.75).

For the remaining terms, the full-time Payment Schedule shows
that Anner is eligible for an annual award of $2,350. To determine
Anner's payment, Bylsma uses the following calculation:

8 weeks instructional
time in the term
$2,350 X -------------------------- = $587.50
32 weeks instructional time
in the academic year

Anner's payment for the second term will be $587 (rounded down
because the first payment was rounded up); his payment for the
third term will be $588, and his payment for the fourth term will
be $587.
_________________

Owen is enrolled in the education program at Hart University that
has a short 4-week term between two 15-week terms. His
enrollment status is half-time for the first and third terms and full-
time for the second term. The academic year for the program is
defined as 34 weeks of instructional time and 24 semester hours.
Hart uses Formula 3 to calculate Pells for students in this program.
Owen's EFC is 1214, and the Pell COA for the program is $8,745.

For the first and third terms, the half-time Disbursement Schedule
shows that Owen is eligible for an annual award of $725. To
determine Owen's payment for these two terms, the school uses
the following calculation:

15 weeks instructional
time in the term
$725 X ------------------------- = $319.85
34 weeks instructional time
in the academic year

Owen's payment for the first term will be $320 (rounded up
from $319.85).

For the second term, Owen has an annual award of $1,450 (from
the full-time Payment Schedule). Note that this is the same as his
Scheduled Award. To determine his payment for the term, Hart
uses this calculation:

4 weeks instructional time
in the term
$1,450 X ------------------------------- = $170.59
34 weeks instructional time
in the academic year

Owen's payment for the second payment period will be $171
(rounded up from $170.59). His payment for the third payment
period will be $319 (rounded down from $319.85 because the first
two payments were rounded up). He will receive $810 for the
entire year. Note that this is less than his Scheduled Award, but
more than the annual award based on half-time enrollment.
_________________


[[This file contains the graphic on page 4-33 in Portable
Document Format (PDF). It can be viewed with version 3.0 or greater
of the free Adobe Acrobat Reader software.]]


[[Formula 4]]
[[34 CFR 690.63(e)2]]
Unlike under the preceding three formulas, no adjustment for
enrollment status is made in determining the annual award under
Formula 4. Instead, a comparable proration of the award based on
hours enrolled must be performed. The calculation for the payment
period adjusts the annual award both if the student will be enrolled in
fewer credit/clock hours than in a full academic year (an adjustment
mainly handled by enrollment status in the other formulas) and if a
full-time student would be attending fewer weeks than a full
academic year. To adjust for fewer weeks, the school must multiply
the annual award by the lesser of:

Weeks of instructional time for a full-time
student to complete hours in the program
-----------------------------------------------
Weeks of instructional time in program's
definition of academic year

OR

Weeks of instructional time for a full-time student
to complete hours in the academic year
-------------------------------------------------------
Weeks of instructional time in program's definition
of academic year

OR

One (1)

Note that the result of this multiplication will never be greater than
the original annual award. Because the annual award has not been
adjusted for enrollment status, the fractions use the weeks of
instructional time for a full-time student to complete the
hours in the program or academic year. The school must determine
the weeks of instructional time it takes a full-time student to
complete the hours based on the time required for the majority of its
full-time students to complete the program or academic year, not
student by student.

[[34 CFR 690.63(e)3]]
Then, to adjust for fewer clock/credit hours, the school must multiply
this adjusted annual award by the following fraction:

Credit/clock hours in a payment period
-------------------------------------------------------------
Credit/clock hours in program's definition of academic year

[[34 CFR 690.63(f)]]
The resulting amount is the payment for a payment period. However,
if this amount is greater than 50% of the annual award, the school
must make the payment in at least two disbursements. A single
disbursement may never be more than 50% of the annual award.

Miranda is enrolled for 10 clock hours per week in a 650 clock
hour program at Sarven Technical Institute. She begins attending
in January 1998. The program provides 27 weeks of instructional
time; Sarven defines the academic year for the program as 30
weeks of instructional time and 900 clock hours. Miranda's EFC
is 0; the Pell COA for less-than-half-time students in the program
is $2,143.

Based on a COA of $2,143 and an EFC of 0, the full-time
Payment Schedule shows that Miranda is eligible for an annual
award of $2,150. Sarven has established 4 payment periods—the
first three are each 163 clock hours, the fourth is 161 clock hours.
To calculate Miranda's payment, the school uses the following
calculations:

27 weeks instructional time
for program
$2,150 X ------------------------------- = $1,935
30 weeks instructional time
in the academic year

163 clock hours in the
payment period
$1,935 X ----------------------------- = $350.45
900 clock hours in the
academic year

Miranda's payment for the first payment period will be $350
(rounded down from $350.45). She may receive this payment
when she begins the program. Her payment for the second
payment period will be $351 (rounded up because the first
payment was rounded down); she may receive this payment after
she completes the 163 clock hours in the first payment period.
Because she is completing only 10 clock hours a week, the final
two payment periods will be in the 1998-99 award year, and a new
calculation will be required based on the 1998-99 Payment
Schedule.
___________________

Allen is also enrolled at Sarven Technical Institute; his EFC
is 137, and the Pell COA for his program is $4,650. His program
is 24 quarter hours and 20 weeks of instructional time; the
academic year for the program is defined as 36 quarter hours
and 30 weeks of instructional time. Based on a COA of $4,650
and an EFC of 137, the full-time Payment Schedule shows that
Allen is eligible for an annual award of $2,550.

Sarven has established two payment periods of 12 quarter hours
each for Allen's program. To calculate Allen's payment, the school
uses the following calculations:

20 weeks instructional time
for program
$2,550 X ------------------------------- = $1,700
30 weeks instructional time
in the academic year

12 quarter hours in the
payment period
$1,700 X -------------------------------- = $566.67
36 quarter hours in the
academic year

Allen's payment for the first payment period will be $567
(rounded up from $566.67). Allen may receive this payment when
he begins the program. Allen's payment for the second payment
period will be $566 (rounded down, because the first payment was
rounded up). Because students do not earn any of the 24 quarter
hours in the program until they complete the entire program,
Sarven has determined that it may make the payment for the
second payment period after Allen has completed the tenth
calendar week of the program (see page 4-28).

[[This file contains "Step 5 summary by formula; Step 5:
Calculate Payment for a Payment Period" on page 4-36 in Portable
Document Format (PDF). It can be viewed with version 3.0 or greater
of the free Adobe Acrobat Reader software.]]

CHECKING REMAINING ELIGIBILITY: CROSSOVER
PAYMENT PERIODS
------------------------------------------------

Payment periods do not always fall neatly into one award year or
another. When a payment period falls into two award years, it is
referred to as a "crossover payment period."

At a school with a traditional term calendar, the summer term is
usually a crossover payment period.

[[This file contains the graphic on page 4-37 in Portable
Document Format (PDF). It can be viewed with version 3.0 or greater
of the free Adobe Acrobat Reader software.]]

The basic calculation for a crossover payment period is the same as
that for any other payment period. However, there are additional
provisions for some summer terms. (See "Summer Terms" in this
section.)

[[Payment from either award year]]
The school may make a payment for a crossover payment period out
of either award year, provided the student has a valid output
document for the award year selected, except that if more than six
months of the payment period occurs in a given award year, the Pell
payment must be made from that award year.

The decision about which award year to use is usually based on the
student's remaining eligibility in the earlier award year. For instance,
if a student had already been paid for two semesters (each at least 15
weeks) as a full-time student for a full academic year in the 1998-99
award year, the student would have been paid a full Scheduled
Award for that year. However, if the school receives a valid output
document for the 1999-2000 award year, the student could be paid
for the crossover period from that year's funds. Of course, a student
may still be eligible for a summer payment from the earlier award
year if the student has not attended for a full academic year. For
example, a student who enrolls at midyear, in the spring session,
might still have eligibility remaining for the summer term. As
another example, a student could receive a Pell payment for the
summer term, even after receiving payments for the other terms in
the award year, if the student attended PART TIME in those other
terms, or if those terms provided less than 30 weeks of instructional
time.

[[Costs for crossover payment period]]
Costs for a crossover payment period are figured in the same way as
for any other payment period; that is, the costs are based on a full
academic year. For instance, if the school has fall and spring
semesters that comprise an academic year, the financial aid
administrator must not add the costs for the summer term to the costs
for the fall and spring semesters. The award for the summer term is
still based on the costs for one academic year. However, if the
academic year definition includes the summer term, then the costs
for the summer term must be included in the cost for a full
academic year.

If the student was previously enrolled in the award year, the school
may be able to use the same COA for the summer term that it used
for the immediately preceding term the student attended. However,
this is not possible if the school is required to recalculate the COA.
(See Section 5 of this chapter for information on when recalculations
are required.) If it is necessary to base the student's COA on the
summer term, the financial aid administrator must prorate the
summer costs to establish the cost for an academic year. (See
"Calculating the Cost of Attendance" in this section for information
on prorating costs.)

If the summer session is the first term in the award year for that
student (for example, the school is paying a student for the summer
1998 term from the 1998-99 award year), the school must establish
the student's full-year cost based on the costs for the summer term.
If the student enrolls in another term in that award year, the school
may have to recalculate the student's costs for the later term (see
Section 5.)


SUMMER TERMS
--------------

If a school offers a summer term in addition to fall through spring
terms, the school calculates the student's payment for the summer
term by using the same formula used to calculate the payment for
each term within the school's fall, winter, or spring terms. For a
program for which the school could calculate awards using Formula
1 or 2, the school may instead perform an alternate calculation that
distributes the annual award over all the terms for all students
enrolled in the program.

[[Full-time status definition]]
Regardless of the method the school chooses to calculate the
student's summer payment, the aid administrator must apply the
school's definition of full-time status consistently to all SFA
Programs. In addition, in order to calculate a student's Pell under
Formula 1 or 2 or under the alternate calculation, the aid
administrator must define full-time enrollment during the summer as
at least 12 credit hours.

[[Alternate calculation]]
To perform the alternate calculation, the school divides the annual
award by the number of terms (including the summer term) in the
award year. If the school chooses this alternate calculation, the
school must use the alternate calculation for all students enrolled
in the same program of study, increase the number of weeks of
instructional time in the academic year defined for the student's
program to include the number of weeks in the summer term, and
include the costs for the additional term in the Pell COA. The school
may also include the number of credit hours for the additional term
in the academic year defined for the student's program.
Alternate calculation example

Kevin enrolls as a half-time student in a two year associate degree
program at Ivers Community College. The academic calendar for
this program uses quarters; there are three quarters in the fall
through spring terms, each providing 9 weeks of instructional
time. The program also has a summer quarter which provides 9
weeks of instructional time. Ivers can use Formula 2 to calculate
Pells for students in the program, and decides to use the alternate
calculation to distribute the award over all four terms. The school
defines the academic year for Kevin's program as 48 quarter hours
and 36 weeks of instructional time (both the weeks and the credit
hours for the summer term are included in the academic year).
Kevin's EFC is 300, and the Pell COA (which includes costs for
the summer quarter) is $5,200.

Based on a COA of $5,200 and an EFC of 300, the half-time
Disbursement Schedule shows that Kevin is eligible for an annual
award of $1,225. Ivers uses the alternate calculation to determine
Kevin's payment for a payment period. It divides the annual award
by the number of terms in the award year:

$1,225 / 4 = 306.25

Kevin will receive $306 (rounded down from $306.25) in the fall,
winter, and spring quarters; he will receive $307 (rounded up
because other payments are rounded down) in the summer quarter.

If the school does not choose to use the alternate calculation and
calculates the payment for the summer term using Formula 1 or 2,
the school must ensure that the amount of Pell funds the student
receives for the award year does not exceed the Scheduled Award.
(See "Crossover Payment Periods" in this section.)

Suppose for the preceding example, Ivers did not use the alternate
calculation, and calculated payments using Formula 2. Because
Ivers would no longer be required to include the summer term in
the academic year definition, it could define the academic year for
the program as 30 weeks of instructional time and 36 quarter
hours. Ivers would also have to adjust the COA (to remove
summer costs), although in this case it would not affect Kevin's
annual award. Using the same annual award as in the previous
example, the school would calculate Kevin's payment as follows:

27 weeks instructional time in
fall through spring terms
$1,225 X -------------------------------- = $1,102.50
30 weeks instructional time in
academic year definition

Ivers would then divide this prorated annual award by 3 (because
the program uses quarters) to determine Kevin's payment for the
payment period:

$1,102.50 / 3 = $367.50

Kevin would receive $368 for each of the fall and spring quarters
(rounded up from $367.50), and $367 for the winter quarter. He
would receive an additional $367 payment for the summer quarter.
Under this calculation, Kevin will receive a total of $1,470 for the
award year. His Scheduled Award is $2,450, so he will not receive
more than a Scheduled Award.

[[Summer minisessions]]
If a term-based school offers a series of minisessions that overlap
two award years (by "crossing over" the June 30 end date for one
award year), these minisessions may be combined and treated as one
term. However, schools are not required to combine these
minisessions. The weeks of instructional time in the combined term
are the weeks between the beginning of the first minisession and the
date the last minisession will end. The student's enrollment status for
the entire payment period must be calculated based on either

- the total number of credits the student is taking for all sessions, if
that number is known when the award is calculated, or

- a projected number of credits based on the credits the student is
taking for the first session if the number of credits to be taken in
subsequent sessions is unknown when the award is calculated.

If the school combines minisessions into a single term, a student may
not be paid more than the amount for one payment period for
completing any combination of the minisessions.

Note that recalculation is required if the student does not ultimately
attend the projected classes in a subsequent minisession. (See
"Change in Enrollment Status" in Section 5 of this chapter.)

If the school does not combine minisessions into a single payment
period, it must treat each minisession as a separate nonstandard term
and calculate the payment for each using Formula 3.
Minisession example

Bruce enrolls part time at Hart University. In addition to fall and
spring semesters, Hart University offers three summer
minisessions. Each minisession provides 5 weeks of instructional
time. Hart chooses to combine the sessions into a single payment
period providing 15 weeks of instructional time. Full-time
enrollment in this period is defined as 12 semester hours. Hart can
use Formula 1 to calculate payments for this summer session.

Bruce enrolls for 3 semester hours in each of the minisessions, so
he is enrolled three-quarter time (9 hours total in the combined
term). His EFC is 772 and the Pell COA is $8,170. Based on a
COA of $8,170 and an EFC of 772, the three-quarter-time
Disbursement Schedule shows that Bruce is eligible for an annual
award of $1,463. To calculate Bruce's payment, the school divides
the annual award by the number of terms in the academic year:

$1,463 ¸ 2 = $731.50

Bruce may receive $732 for the combined summer session if it is
the first term of the award year. However, suppose Bruce had also
enrolled three-quarter time in the preceding fall and spring
semesters. He would have received a total of $1,463 for these two
terms. If this amount is subtracted from his Scheduled Award
($1,950), only $487 remains. Therefore, if Bruce had enrolled in
both semesters and was being paid from the same award year for
the summer, he would only receive $487 for the combined
summer session.

If Hart University did not combine the three minisessions, it would
have to calculate payments for the program using Formula 3. Hart
would have to determine Bruce's enrollment status by multiplying
full-time enrollment for the academic year (24 semester hours) by
the number of weeks of instructional time in the term (5) over the
number of weeks in the academic year (30). For the 5 week terms,
a full-time student must enroll in 4 semester hours to be full time;
therefore, Bruce is still enrolled three-quarter time. The COA
would not have to be adjusted, and his annual award would remain
the same. Hart would determine his payment using the following
calculation:

5 weeks instructional time
in the term
$1,463 X ----------------------------- = $243.83
30 weeks instructional time
in the academic year

Bruce would receive $244 for the first two minisessions (rounded
up from $243.83) and $243 for the third (rounded down because
the first two were rounded up), for a total of $731 for the summer.
Again, these payments may need to be reduced if Bruce had
previously received payments for the fall and spring semester in
this award year.


CHECKING REMAINING ELIGIBILITY: TRANSFER STUDENTS
--------------------------------------------------------

[[Output document and financial aid history needed]]
The school must be careful not to exceed the Scheduled Award when
paying a student who has previously received a Pell for the award
year at another school. To pay such a student, the school must obtain
a SAR or ISIR and financial aid history information.

[[Application information]]
There are three ways for a school to obtain the student's application
information and official EFC if that school was not listed on the
FAFSA:

1. The school can have the student request a duplicate of his or her
original SAR and submit it.

2. If the school participates in EDE, it can have the student provide
the Personal Identification Number (PIN) that is printed on the
upper right corner of the SAR, so that the school can obtain the
student's data electronically.

3. The school can have the student correct his or her SAR to add the
school's name to the list of schools in items 92 through 103.

[[Financial aid history]]
The school may obtain a financial aid history by requesting that the
other eligible school(s) that the student attended send a financial aid
transcript. Note that schools may also receive transcript information
through the NSLDS. (See Chapter 2 for more on transcript
requirements and NSLDS.) However, schools should be aware that
there are limits on the use of NSLDS for midyear transfers, as
discussed below.

[[Midyear transfer--"Dear Colleague" letter GEN-96-13]]
To calculate awards for students who transfer during the award year,
the school must have up-to-date information on the student's
scheduled award and the amount disbursed. That information is not
provided in the NSLDS section of the output document. If the school
wishes to use NSLDS for transcript information for such students, it
must check NSLDS at least 60 days after the end of the student's
enrollment at the previous school. A school may make an initial
disbursement to such students before receiving the final NSLDS data
as it would to students for which it had requested but not received a
financial aid transcript. Alternatively, the school may request up-to-
date transcript data from the previous school. The school may
request only information on the current year and use NSLDS for the
remaining financial aid history. (See Chapter 2, Section 2 for more
on NSLDS.)

[[Calculating the payment]]
The Pell payment for a transfer student is calculated in the same way
as for any new student. That is, the school must divide the annual
award (prorated if necessary) into payments for each payment
period. However, before paying a transfer student, the school must
also make sure the student does not receive more than 100% of his or
her Scheduled Award during the award year. Thus the school must
determine what percentage of the Scheduled Award at the previous
school the student actually received. Because the school is
determining the relationship between the amount the student received
and the Scheduled Award used to determine that amount, the school
must use the Scheduled Award reported by the previous school in
determining this percentage, and cannot correct it on the basis of its
own records.

[[Figuring percentage of remaining eligibility--34 CFR 690.65(d)]]
The financial aid history provides the necessary information. First,
find the percentage of the Pell received at the previous school by
dividing the amount the student received by the student's Scheduled
Award at that school. Then subtract this percentage from 100%. The
result is the maximum percentage of the Scheduled Award that the
student may receive at the new school.
Transfer example

A student attends fall and winter terms at a school using
nonstandard terms. The student then transfers to a school using
semesters for the spring semester. The financial aid transcript from
the first school shows the student received $1,003 in Federal Pell
Grant payments and had a $1,700 Scheduled Award. The student
is eligible for a $2,100 Scheduled Award at the new school. What
is the maximum the student can be paid for the remainder of the
award year at the new school?

$1,003 / $1,700 = 59% of Scheduled Award
used at first school

The student is eligible for 41% of the Scheduled Award at the new
school.

41% X $2,100 = $861

A student with a $2,100 Scheduled Award would ordinarily
receive a $1,050 payment for one semester (if enrolled full-time).
However, the transfer student in this example may not be paid
more than $861, because the student has received 59% of the
Scheduled Award at the first school.

The reason for using percentages is that a transfer student may have
different Scheduled Awards because the costs of attendance at the
two schools may be different. The percentages are used to compare
the portions of a student's total eligibility that have been used at both
schools. (If the student's Scheduled Award is the same at both
schools, the financial aid administrator can find the amount of the
student's remaining eligibility simply by subtracting the amount
received at the first school from the Scheduled Award.)

Note that a transfer student receives the same payments as any other
student until the limit (100% of a Scheduled Award) is reached. For
example, a transfer student enrolls for two terms in the award year at
a school and would ordinarily receive a $500 payment for each term.
However, the student's remaining eligibility, based on payments at
the other school, is only $600. Rather than "rationing" this amount
by splitting it into two $300 payments for the two terms, the school
must pay the student $500 for the first term and the remainder ($100)
for the second term. Thus, the student will have received a full
payment for the first term, even if he or she does not return for the
second term.


TWO MATHEMATICAL NOTES
--------------------------

[[Rounding]]
When making disbursements, round to the nearest dollar: Round up
if the decimal is .50 or higher; round down if it is less than .50. For
instance, if a calculation resulted in a payment of $516.66, round up
to $517. If the calculation result was $516.33, round down to $516.
The payment system will not allow payments including cents.

For a student who is expected to be enrolled for more than one
payment period in the award year, the school must alternate rounding
up and rounding down to ensure that the student receives the correct
amount for the year. For example, if a student had a Scheduled
Award of $1,025 to be paid in two payment periods, the first
payment would be $513 (rounded up from $512.50), and the second
payment would be $512 (rounded down to ensure that the student is
not overpaid for the year).

The same principle applies when there are three or more payment
periods in the award year. For instance, if the student has a
Scheduled Award of $1,100 and enrolls at a school using quarter
terms, the payment for each term would come to $366.66. The first
two payments would be rounded up to $367, and the last payment
would be rounded down to $366 to reach the total of $1,100.

[[Fractions]]
When using fractions, be careful to multiply first, and then divide to
avoid making an overpayment. For example, to calculate the
payment in a program that has three payment periods of 300 hours
each, you should use the method in this example:

[[This file contains the fractions example on page
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