Chapter 3

Calculating Pell and Iraq & Afghanistan Service Grant Awards

Pell Grant awards are based on the 9-month Expected Family Contribution (EFC) on the student’s valid SAR or ISIR, the academic year structure (see Chapter 1 of this volume), and the cost of attendance (COA) for a full-time student for a full academic year (see Chapter 2 of this volume). The Scheduled Award amounts are specified on the Pell Grant payment schedules released by the Department. For term-based programs, awards for part-time students are also based on enrollment status, using the part-time charts in the Pell Grant payment schedules.

In this chapter, we’ll show you how to calculate Pell and Iraq & Afghanistan Service Grant (IASG) payments for your students, using the appropriate formula for the term or non-term calendar.

CHAPTER 3 HIGHLIGHTS

Calculations for:

  • Zero EFC treatment for children of soldiers

  • Iraq & Afghanistan Service Grants

  • Credit-hour term programs with fall through spring standard terms that provide 30+ weeks of instructional time and certain other standard term programs (Formula 1 or Formula 3)

  • Credit-hour term programs with fall through spring standard terms that provide less than 30 weeks of instructional time (Formula 2 or Formula 3)

  • Any credit-hour term programs including nonstandard term programs (Formula 3)

  • Clock-hour programs and non-term credit-hour programs (Formula 4)

  • Pell/Iraq & Afghanistan Service Grant LEU

  • Summer terms, crossover payment periods, and mini-sessions

  • Transfer students

  • Recalculations (required and optional)

The Sequester and Iran & Afghanistan Service Grants

The Budget Control Act (BCA) of 2011 put into place a federal budget cut known as the sequester. The Pell Grant program is exempt from the effects of the sequester. As such, Pell Grant payment schedules are unchanged. Unlike Pell, the Iraq & Afghanistan Service Grant is not exempt from the effects of the sequester. Iraq & Afghanistan Service Grant awards first disbursed on or after October 1, 2019, and before October 1, 2020 (FY 2020 sequester) require reductions of 5.9% from the award amount for which the student would otherwise have been eligible to receive. The FY 2021 sequester related reductions (for awards made on or after October 1, 2020 and before October 1, 2021) for the IASG will be 5.7%. For more details, see the Electronic Announcement posted June 23, 2020.

Scheduled Award, Award Year, & Annual Award

The Scheduled Award is the maximum amount the student can receive during the award year, if he or she attends full-time for a full academic year. The award year begins on July 1 of one year and ends on June 30 of the next year. For example, the 2020-21 award year begins July 1, 2020, and ends June 30, 2021.

The student’s Scheduled Award is established by the Pell Grant payment schedules that the Department issues prior to the start of each award year. The amount of the Scheduled Award is always taken from the full-time payment schedule and is based on the student’s EFC and COA. The annual award is the maximum amount 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.

A part-time student who is enrolled in a term-based program will have an annual award that is less than the Scheduled Award. If the student attends part-time, the student’s annual award is taken from the three-quarter-time, half-time, or less-than-half-time disbursement schedules. For instance, if a student’s Scheduled Award is $6,345, but the student is enrolled as a halftime student in a term program, the student’s annual award would be $3,173. The Department issues one schedule for full-time Scheduled Awards, and separate schedules for three-quarter-time, half-time, and less-than-half-time awards.

The tables below show selected EFC and COA amounts as they are displayed in the Pell Grant full-time Scheduled Award and half-time annual award schedules for the 2020-2021 award year. These tables show, for example, that the Scheduled Award for a full-time student with an EFC from 3501 to 3600 and a COA from $5,000 to $5,099 would be $1,500. A half-time student with the same EFC and COA would have an annual award of $750.

Federal Pell Grant Program Payment Schedule for Determining Full-Time Scheduled Awards in the 2020-2021 Award Year

Federal Pell Grant Program Payment Schedule for Determining Full-Time Scheduled Awards in the 2020-2021 Award Year

Federal Pell Grant Program Payment Schedule for Determining Half-Time Scheduled Awards in the 2020-2021 Award Year

Federal Pell Grant Program Payment Schedule for Determining Half-Time Scheduled Awards in the 2020-2021 Award Year

For more details, see Dear Colleague Letter GEN-20-01 (Pell Grant Payment and Disbursement Schedules), the March 4, 2020 Electronic Announcement (Operational Implementation Guidance - Federal Student Aid’s Implementation of 2020-21 Federal Pell Grant Payment and Disbursement Schedules, and 34 CFR 690.63.

Pell Grant awards for 2020-21

The maximum Pell Grant award is $6,345 (see the Year-Round Pell & IASG section later in this chapter on how a student may be eligible to receive up to an additional 50% of their scheduled award). The maximum eligible EFC for the 2020-21 award year is 5711. For more detail, see the Pell Grant payment schedules and accompanying guidance in Dear Colleague Letter GEN-20-01, available in the Knowledge Center. Actual Pell awards are unique to each student and are based upon and limited by their enrollment status, EFC, COA, and Lifetime Eligibility Used (LEU). For more on LEU, see the subsection “Pell Grant and Iraq & Afghanistan Service Grant Lifetime Eligibility Used (LEU)” later in this chapter.

Prohibition on concurrent enrollment and Pell Grant

A student may not receive Pell Grant payments concurrently from more than one school, nor from the Secretary and a school. A student who withdraws from one school and enrolls at least one day later in another school is normally not considered to have been enrolled concurrently. If a student is awarded Pell for any period of concurrent enrollment, the student has the choice of which award to receive, but is limited to a single award from a single school. See 20 USC Sec.1070a(c)(3) and 34 CFR 690.11.

Children of Fallen Heroes (CFH) Scholarship Act

Beginning with the 2018-19 award year, an otherwise Pell-eligible student whose parent or guardian died as a result of active service in the line of duty as a Public Safety Officer (defined under 42 U.S.C. 3796b, or a fire police officer) may receive the maximum Pell Grant and increased amounts of other federal student aid if the student was less than 24 years old when the parent or guardian died, or was enrolled at an institution of higher education at the time of the parent or guardian’s death. A school must use an EFC of 0 to package all federal student aid if the student meeting the above criteria has a Pell-eligible EFC. Note that the zero EFC is only used for packaging purposes; you do not actually change the student’s calculated EFC.

An FAA who identifies an applicant meeting the criteria for the CFH Scholarship Act will set the CFH indicator in FAA Access. This indicator becomes part of the ISIR file and is printed on the SAR, eSAR, and ISIR from EDExpress. Comment code 402 is assigned to students’ records, alerting the student that they may be eligible for additional aid under the CFH Act and to contact their FAA for more information. Once an institution determines that a student has met the eligibility criteria for the CFH Scholarship Act, that institution (or any other institution) does not need to redetermine CFH Scholarship Act eligibility for subsequent award years for that student. See the Electronic Announcement of November 19, 2018 and HEA Sec. 473 [42 U.S.C. 3796b] for more details on the eligibility and treatment of Children of Fallen Heroes.

Minimum Pell Grant and LEU

Under section 401(b)(4) of the HEA, the minimum award is set at 10% of the maximum award appropriated each year. Because midpoints are used for the EFC and COA columns in constructing the Pell payment schedules, the minimum Pell award for a full-time student is actually slightly higher than 10% of the maximum Pell award. Students who are eligible for less than the minimum award are not Pell eligible for 2020-21, unless the reason for their low Pell eligibility was truncation due to Lifetime Eligibility Used (LEU) limitations (for more on LEU, see the “Pell & IASG LEU” section later in this chapter).

There is no de minimis award amount for purposes of determining a student’s award because of the 600% LEU limitation. As such, even a student with a very small remaining LEU is eligible to receive the calculated amount of the Pell Grant, as long as the LEU is not exceeded. For example, a student with an EFC of 3750 and an LEU of 599.500% would be eligible for the remaining 0.500% which is $12.97 (if your school only disburses in whole dollars, this amount must be rounded down to $12, because $13 would exceed the student’s maximum LEU).

Academic calendar and enrollment status changes

Because the academic calendar for a program determines which Pell formula you use, you need to review the conditions for the use of each formula if the calendar for the program changes. This is particularly true if you are using Formulas 1 and 2, since they have the most restrictive conditions.

If a student’s enrollment status changes during the year, your school may have to recalculate the student’s Pell Grant payment based on the new enrollment status. At the end of this chapter we’ll discuss when a school is required to recalculate a student’s Pell Grant payment due to a change in enrollment status. For more details, see 34 CFR 690.63 and 34 CFR 690.80(b).

Enrollment status under consortium agreement

The enrollment status of a student attending more than one school under a consortium agreement is based on all the courses taken that apply to the degree or certificate at the home institution. The disbursing school may have to make some adjustments if the coursework at the other school is measured in different units.

Enrollment status for cooperative education

In a cooperative education program, your school assesses the work to be performed by the student and determines the equivalent academic course load. The student’s enrollment status is based on the equivalent academic course load.

DOD Match Flag and SAR Comment Code 298

If you received an ISIR containing the DOD Match Flag “Y”, with the parent’s date of death and SSN, the student could potentially be eligible for additional Title IV aid, including a maximum Pell Grant award or an Iraq and Afghanistan Service Grant. The DOD Match Flag is the result of the match with the Department of Defense to identify an applicant whose parent was a member of the U.S. Armed Forces who died as a result of service in Iraq or Afghanistan after September 11, 2001.

A SAR comment code is not always printed. When a student matches with the DOD file, the ISIR always shows a “Y” in the DOD Match Flag field and the parent’s date of death is populated. But SAR comment code 298 (which informs the student of a possible change in the student’s eligibility for federal student aid) is only generated when the CPS DOD Table is updated after the student filed the FAFSA (a system generated transaction occurs and generates the comment). For more details, see the 2021-22 ISIR Guide.

Full-time enrollment status for students with intellectual disabilities enrolled in comprehensive transition and postsecondary programs

Students enrolled in certain programs for students with intellectual disabilities may qualify to receive aid as full-time students by meeting the fulltime enrollment status criteria using alternative credit “equivalencies.” These equivalent credits, earned from audited courses and other normally noncredit activities undertaken as part of a program for students with disabilities, may be awarded for purposes of determining enrollment status. For more detail, see Chapter 1 of Volume 1 of the FSA Handbook.

Pell Grant Administrative Cost Allowance (ACA)

For each student that receives a Pell Grant at your school each award year, your school is paid $5 to help pay the associated administrative costs. ACA amounts will be posted in G5 as an Available Balance (look for Award Number P063Q18####). ACA amount notifications will be sent to your SAIG mailbox (look for Message Class PGAS19OP). This money must be used solely to pay for the costs of administering the Federal Pell Grant, Federal Work-Study (FWS), and FSEOG programs. For more details, see 34 CFR 690.10, HEA Sec. 489(a), and the March 2, 2020 Electronic Announcement.

Ground rules for Pell Grants

Fractions

When using fractions, be careful to multiply first, and then divide to avoid an incorrect result. For example, here’s the correct way to prorate a $2,150 Scheduled Award for a payment period that is a nonstandard term of 10 weeks of instructional time, for a program that has 30 weeks of instructional time.

$2,150 x (10 ÷ 30) is multiplied as (2,150 x 10) ÷ 30 = 716.67

In this case, if you divide the fraction to get a decimal (0.333333...) and then round the decimal either down (0.33) or up (0.34), your calculation will result in a number that’s too low (709.50) or too high (731).

Rounding

The Common Origination and Disbursement System (COD) accepts cents and whole dollar amounts in payment amounts for Pell. When rounding, you may round up if the decimal is 0.50 or higher; round down if its less than 0.50. When rounding for a student expected to be enrolled for more than one payment period in the award year, alternate rounding up and down. The amount used to round (whether it be a dollar or penny) is usually carried forward to the next payment and applied before the rounding calculation is performed for that payment period, unless a different Pell award amount is calculated for the following term, for example, when a student’s enrollment status changes, in which case you may round up for two consecutive terms. Your policy on rounding must be applied equally to all students.

Important: These rounding rules do not apply if the amount disbursed would exceed the student’s Scheduled Award or place the student’s LEU over 600%. For more on LEU for Pell and Iraq & Afghanistan Service Grants, see “Pell and Iraq & Afghanistan Service Grant LEU” later in this chapter.

Additional aid eligibility for certain children of soldiers: Zero EFC treatment or Iraq & Afghanistan Service Grant

HEA Sec. 420R, November 6, 2009 Electronic Announcement

An otherwise Pell-eligible student whose parent or guardian died as a result of U.S. military service in Iraq or Afghanistan after September 11, 2001, may receive increased amounts of federal student aid if the student was less than 24 years old when the parent or guardian died, or was enrolled at an institution of higher education at the time of the parent or guardian’s death. There are two different provisions for eligible children of soldiers, depending on whether the student has an EFC that falls within the range for Pell Grant eligibility or not.


Zero EFC treatment for dependents of soldiers

A school must use an EFC of 0 to package all federal student aid if the student meeting the above criteria has a Pell-eligible EFC. (Note that the zero EFC is only used for packaging purposes; you do not actually change the student’s calculated EFC.) When submitting an origination to COD for a student of this type, you must include the CPS transaction containing the DOD Match Flag set to “Y,” or the award will not be accepted. A student with an EFC that is not Pell eligible is potentially eligible to receive an award under the Iraq & Afghanistan Service Grant program (see Iraq & Afghanistan Service Grant below).

Iraq and Afghanistan Service Grant

To receive the Iraq & Afghanistan Service Grant, the student must have an EFC that is not Pell eligible. Iraq & Afghanistan Service Grants are made under the same terms and conditions as Pell, and disbursements for each payment period are calculated in the same manner as described in this chapter for Pell. Unlike Pell Grants, however, Iraq and Afghanistan Service Grant award amounts must be reduced as required by the federal budget cut known as the sequester. See “The Sequester and Iraq & Afghanistan Service Grants” earlier in this chapter.

When submitting an origination to COD for a student receiving an Iraq & Afghanistan Service Grant, you must include the CPS transaction containing the Department of Defense (DOD) Match Flag set to “Y,” or the award will not be accepted. The award may not exceed the student’s COA. Iraq and Afghanistan Service Grants are not considered Estimated Financial Assistance for packaging purposes. For more detail on packaging awards, see Chapter 7 of this volume. Note that children of public safety officers (see the “Children of Fallen Heroes Scholarship Act” section earlier in this chapter) are not eligible for Iraq & Afghanistan Service Grants.

The Year-Round Pell provision also applies to Iraq & Afghanistan Service Grants. For more detail on how to calculate Year-Round Pell & IASGs, see the Year-Round Pell & IASG section later in this chapter.


Identification of eligible students and notification by the Department:

The Department will notify the student when a student appears to meet the criteria for Zero EFC treatment for children of soldiers or the Iraq & Afghanistan Service Grant, based on a match with a Department of Defense (DoD) file of eligible dependents. The match will be performed when a student submits a FAFSA or FAFSA correction (and periodically thereafter). When an eligible student is identified, the Department will generate a Central Processing System (CPS) transaction for the student, and the resulting ISIR will include a “DOD Match Flag,” associated comment code 298 (in some cases), and the parent or guardian’s date of death.

Note that Zero EFC treatment under this provision will not force an auto-zero EFC; the EFC will be calculated based on the student’s financial situation, but you must use the flag and date of the parent or guardian’s death, along with the student’s calculated EFC, to determine if the student is eligible for Zero EFC treatment for children of soldiers, or an award under the Iraq & Afghanistan Service Grant program. The Department will also send a letter to each matched student that informs the student of his or her possible increase in eligibility for FSA funds. The letter advises the student to contact his or her financial aid administrator for more information.

For more information on code 298 and other SAR comment codes, see the 2021-22 SAR Comment Code Guide.

Terms and Payments Methods for Calculating Pell

Generally, if all coursework is scheduled to be completed within a specific time frame, the program can be considered term-based. Term-based programs can have either standard terms or nonstandard terms. Pell Grants are usually calculated differently for the two types of terms. Standard term programs may be treated similarly to nonstandard term programs if the program does not conform to a traditional academic calendar or meet certain other conditions. Regardless of whether coursework is generally offered using terms, schools always have the option of treating a program as a nonterm program for Title IV purposes. See Chapter 1 of this volume for detailed guidance on standard term, nonstandard term, and non-term programs.

When calculating Pell Grants, you must generally use the same formula for all years in a student’s program. In most cases, a program’s academic calendar determines the particular formula that must be used to calculate Pell Grant awards, and that formula is then used for all years of the program. However, for programs offered in standard terms a school has the option of choosing between different Pell formulas, as explained later in this chapter. For such programs a school normally chooses one of the allowable formulas and uses that same formula for the duration of the program, but in rare cases a school may have reason to change from the originally selected formula to a different allowable formula. Any such change in Pell formulas for standard term programs can only be made at the beginning of a new award year.

Basic Pell Grant calculations
Pell payment schedules: 34 CFR 690.62
Pell Grant formulas: 34 CFR 690.63
“Crossover” payment periods (e.g., summer sessions): 34 CFR 690.64

Determining the award year for crossover Pell awards

You may assign crossover payment periods to the award year that best meets the needs of your students and maximizes a student’s eligibility over the two award years in which the crossover payment period occurs (you must source Pell funds from the award year to which the payment period is assigned). For more detail on crossover payment periods, see the section on crossover payment periods later in this chapter and 34 CFR 690.64.

Credit-Hour Term-Based Programs

Annual award based on enrollment status

In a term-based program, academic progress is always measured in credit-hours, and the student’s annual award depends on his or her enrollment status. Your school’s standards for enrollment status must meet the minimum regulatory requirements, which are discussed in further detail in Volume 1, Chapter 1 of the FSA Handbook.

For standard terms in undergraduate programs, the minimum enrollment standards are:

Full-time:

12 semester hours per semester/trimester

12 quarter hours per quarter

3/4-time:

9 semester hours per semester/trimester

9 quarter hours per quarter

1/2-time:

6 semester hours per semester/trimester

6 quarter hours per quarter

Less-than-1/2-time:

less than half of the workload of the minimum full-time requirement.

If the student is enrolled full-time, then the annual award is the Scheduled Award, which is based on the full-time payment schedule. If the student is attending part-time, you must use the three-quarter-time, halftime, or less-than-half-time payment schedules, depending on the number of credit-hours in which the student enrolls.

If the student is enrolled less-than-half-time, it will also affect the cost components that are used in the student’s Budget (see Chapter 2 of this volume). Schools do not have the discretion to refuse to pay an eligible parttime student, including during a summer term or intersession.

On the appropriate full-time or part-time payment schedules, use the student’s COA and EFC to find the Pell annual award at that enrollment status. Most student aid software programs, such as EDExpress, will do this for you automatically, but you can also refer to the Pell Grant payment schedules online on the Knowledge Center.

Pell Grant payments by term

Pell Grants must be paid in installments over the course of a program of study to help meet the student’s cost in each payment period. The payment period affects when Pell funds are disbursed and the exact amount to be disbursed. For credit-hour term programs, the payment period is the term.

A student who doesn’t enroll in one of the terms won’t receive a portion of the award for that payment period. If the student’s enrollment status changes in the next term, the annual award will be different for that term. (See discussion of terms and payment methods.)

If any program uses standard terms, the enrollment status standards in the program don’t have to be proportional—for instance, a program could have a 15-hour standard for full-time enrollment, but set a 9-hour minimum for three-quarter-time status and a 6-hour minimum for half-time status. In addition, your school’s academic standard may differ from the enrollment standard used by the financial aid office for FSA purposes.

For example, your 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. Your school must apply its FSA full-time enrollment standards consistently to all students enrolled in the same program of study for all FSA purposes. For more on enrollment status, see Volume 1, Chapter 1.

Enrollment status for students taking regular and correspondence courses

If a student is enrolled in a non-correspondence study program, but correspondence coursework is combined with regular coursework, the correspondence courses must meet the following criteria to be included in the student’s enrollment status:

  • The courses must apply toward the student’s degree or certificate or must be remedial work to help the student in his or her course of study.

  • The courses must be completed during the period required for the student’s regular coursework, e.g., a term.

  • The amount of correspondence work counted can’t be more than the number of credit-hours of regular coursework in which the student is enrolled (although a student taking at least a half-time load of correspondence courses must be paid as at least a half-time student, regardless of the credit-hours of regular coursework).

A student will be paid as a less-than-half-time student for any combination of regular and correspondence work that is less than six credit-hours or the appropriate equivalent of half-time.

Enrollment Status for Enrollment in Correspondence and Regular Coursework

Regular Work

Correspondence Work

Adjusted Total Coursework

Enrollment Status

3

3

6

Half-time

3

6

6

Half-time

3

9

6

Half-time

6

3

9

Three-quarter time

6

6

12

Full-time

2

6

6

Half-time

This chart assumes that the school defines full-time enrollment as 12 credit-hours per term, and half-time enrollment as six credit-hours per term. As you can see in the second and third examples, the number of correspondence hours counted in the total course load was adjusted so that the correspondence hours never exceeded the regular hours taken. Note that in the last example, the student is eligible for payment based on half-time enrollment in correspondence courses, because not all of the correspondence work can be counted toward enrollment status.

Consortium different units example

Chris is taking six semester hours at Aroldis University, the home institution, and nine quarter-hours at Coghlan Technical Institute. To determine his enrollment status, Aroldis needs to convert the hours at Coghlan into semester hours.

Because a quarter-hour is about two-thirds of a semester hour, Aroldis multiplies the number of quarter-hours by two-thirds:

9 quarter hours x 2/3 = 6 semester hours

Then the hours taken at both schools can be added together:

6 semester hours at Aroldis + 6 semester hours at Coghlan = 12 semester hours

Linda is also taking six semester hours at Aroldis University and nine quarter-hours at Coghlan Technical Institute, but her home institution is Coghlan Technical Institute.

Because Coghlan is paying her, it needs to convert the semester hours taken at Aroldis into quarter hours:

6 semester hours x 3/2 = 9 quarter-hours

Then, the hours taken at both schools can be added together:

9 quarter hours at Coghlan + 9 quarter hours at Aroldis =18 quarter hours

Pell Formula 1: Credit-Hour Term-Based Programs

To use Pell Formula 1, the program must meet one of two sets of requirements (see 34 CFR 690.63(a)(1)). For a program with a traditional academic calendar, the program:

  • must have an academic calendar that consists, in the fall through spring, of two semesters or trimesters, or three quarters (note that summer may not be a standard term);

  • must have at least 30 weeks of instructional time in fall through spring terms;

  • must not have overlapping terms; and

  • must define full-time enrollment for each term in the award year as at least 12 credit-hours and must measure progress in credit-hours.

Other programs offered in standard terms may use Formula 1 if they start the terms for different cohorts of students on a periodic basis (for example, monthly). These programs:

  • must have an academic calendar that consists exclusively of semesters, trimesters, or quarters;

  • must have at least 30 weeks of instructional time in any two semesters or trimesters or any three quarters;

  • must start the terms for different cohorts of students on a periodic basis (for example, monthly);

  • must not allow students to be enrolled in overlapping terms and must stay with the cohort in which they start unless they withdraw from a term (or skip a term) and re-enroll in a subsequent term; and

  • must define full-time enrollment for each term in the award year as at least 12 credit-hours and must measure progress in credit-hours.

For Formula 1, the term is the payment period, and you divide the student’s award by the number of terms in the program’s academic year. You can combine shorter terms or modules into a standard term that meets the requirements for Formula 1. See the discussion of academic calendars in Chapter 1 for examples. You must use the same formula for a program for all payment periods in an award year.

Alternate calculation

If you’re working with a standard-term program that meets the rules for Formula 1 or Formula 2, you may divide the annual award by the number of all the terms (including the summer term) in the award year.

Formula 1: Basic Calculation

In Formula 1, the annual award is simply divided by the number of terms in the fall through spring at a school with a traditional academic calendar.

Take the case of Jake, who is enrolled full-time in a program that has an academic year of 30 weeks of instructional time and 24 semester hours. The program has fall and spring semesters that provide a total of 30 weeks of instruction and a 12-week summer nonstandard term with 12 semester hours as full-time. Jake has a Scheduled Award of $3,050, and because he is enrolled full-time, that is also his annual award. Because the fall through spring has standard terms, it doesn’t matter that the summer term is nonstandard; you still calculate summer payment based on Formula 1.

$3,050 ÷ 2 = $1,525 disbursement for a semester

The same formula would be used if Jake enrolled in a program that has fall, winter, and spring quarters that provide at least 30 weeks of instruction and has a summer term with 12 quarter hours as full-time. The only difference is that Jake’s annual award of $3,050 is divided by three.

$3,050 ÷ 3 = $1,016.66 disbursement for each payment period

Note that Jake is receiving a full Scheduled Award because he is attending for two semesters or three quarters as a full-time student. If Jake enrolls at least half-time for a term in the summer, he may be eligible to receive further Pell funds from the Year-Round Pell provision. See the Year Round Pell & IASG section later in this chapter.

Formula 1: Basic Calculation Nontraditional Academic Calendar

Majel is enrolled full-time at Roddenberry University in a program that has an academic year of 36 weeks of instructional time and 36 quarter hours, and is offered exclusively in quarters. A new cohort of students starts a quarter on the first workday of each month, and a student is not allowed to take courses in overlapping terms outside that student’s cohort.

Any three quarters of the program provide at least 36 weeks of instructional time since each quarter is 12 weeks of instructional time in length. To be full-time, a student must be enrolled in at least 12 quarter hours for a quarter. Majel has a Scheduled Award of $3,000, and because she is enrolled full-time, that is also her annual award.

Because any three quarters are at least 30 weeks of instructional time and the academic year encompasses three quarters, Majel’s payment for each payment period is calculated by dividing the annual award by three:

$3,000 ÷ 3 = $1,000

Note that Majel is receiving a full Scheduled Award because she is attending for three terms as a full-time student and may be eligible for further Pell funds for the subsequent payment period if she satisfies the requirements for a Year-Round Pell award; for more details, see the Year-Round Pell & IASG section later in this chapter.

Formula 1: Enrollment status change

Yan enrolls full-time in the fall semester at his local community college. He has a cost of $10,000 and EFC of 100, so his Scheduled Award, taken from the full-time payment schedule, is $6,295. Since he’s attending full-time, this is also his annual award. If the school defines its academic year as 30 weeks of instructional time and 24 semester hours, Yan’s annual award is divided by 2 to arrive at the disbursement for the fall semester.

$6,295 ÷ 2 = $3,147.50 for Fall

Yan enrolls in the spring term as a three-quarter-time student. His EFC is the same, and even though his tuition is slightly less, the Pell award is still based on full-time costs. However, his annual award is now based on the three-quarter-time payment schedule, so his spring payment will be less than his fall payment.

$4,271 ÷ 2 = $2,360.50 for Spring

Note that Yan’s Scheduled Award is still $6,295, and he has only received $5,508. This means that he is still eligible for up to $787 in Pell funds from his first Scheduled Award if he attends a summer term assigned to the same award year (if this will not put him over his Pell Grant LEU limit). Yan may also be eligible for a Year-Round Pell award if he continues to be enrolled at least half-time. A student may receive funds from the initial Pell award and from the Year-Round Pell award in the same payment period. For more detail, see the Year-Round Pell & IASG section later in this chapter.

Pell Formula 2: Standard-Term Programs With Less Than 30 Weeks in the Fall Through Spring

Pell Formula 2 may be used for programs that would qualify for Formula 1 except that the program’s academic calendar provides less than 30 weeks of instructional time in the fall through spring terms. Like Formula 1, it simplifies the calculation payments by providing for the same calculation for all payment periods in the award year. Only a small number of schools use Formula 2; therefore, it is covered in Appendix A of this chapter.

Pell Formula 3: General Formula For Any Term Based Program

Any term-based program may use this formula for Pell calculations, but you must use this formula for a term-based program that does not qualify for Formulas 1 or 2 (for instance, a program that uses only nonstandard terms). To calculate the payment for the term, you must prorate the annual award that you looked up on the appropriate Pell Grant payment schedule. Unlike the term calculation in Formula 1, the annual award can’t simply be divided evenly among the terms. Instead, you must multiply the annual award by a fraction that represents the weeks of instructional time in the term divided by the weeks of instructional time in the program’s academic year.

PELL FORMULA 3: GENERAL FORMULA FOR ANY TERMBASED PROGRAM
weeks1 in term
÷
weeks1 in academic year (at least 30)

When using fractions, multiply first, and then divide. Dividing the fraction first to produce a decimal can cause an error if you need to round the decimal up or down. If the resulting amount is more than 50% of the annual award, your school generally must make the payment in at least two disbursements in that payment period regardless of whether the term is a standard term or a nonstandard term. A single disbursement for a payment period can generally not be for more than 50% of the annual award. You may disburse more than 50% of the annual award once the student has completed half of the weeks of instructional time in the program’s academic year definition.

1This fraction uses weeks of instructional time as defined in Chapter 1 of this volume, which are not necessarily the same number as the calendar weeks in an academic year.
Formula 3 regulatory citations
Formula 3 described: 34 CFR 690.63(a)(3)
Enrollment status for nonstandard terms: 34 CFR 668.2
Disbursement cannot exceed 50% of the annual award: 34 CFR 690.63(f)

Enrollment status standards for nonstandard terms

If you are using Formula 3 for a program that contains standard terms, the minimum enrollment standards previously discussed would still apply for the standard terms. However, if a program has nonstandard terms, the enrollment standard must be calculated for the nonstandard terms. The fulltime enrollment status is determined for a nonstandard term based on the length of the term in relation to the academic year.1

Credit-hours in academic year ✕ (weeks2 in nonstandard term ÷ weeks2 in academic year (at least 30))

After you determine the number of credit-hours required for full-time enrollment, you 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 enrollment in the nonstandard term

1 If the resulting number isn’t a whole number, it is rounded up to the next whole number. For example, 3.3 is rounded up to 4 if the program’s coursework is offered in whole credits. If the program’s coursework is offered in fractions, the full-time enrollment status need not be rounded. For example, 3.3 would remain 3.3 as full-time, and a student taking 3.4 credits in the term would be full-time.
2These fractions use weeks of instructional time as defined in Chapter 1 of this volume, which are not necessarily the same number as the calendar weeks in an academic year.

Disbursing more than half the annual award and the 50% requirement

If the disbursement for the payment period results in more than half of the annual award and occurs after half of the weeks of instructional time of the academic year have passed during the payment period, you can make a disbursement of the full payment for the payment period.

For example, your school has a program that must use Formula 3. The program has 3 terms with 17, 14, and 6 weeks of instructional time and defines its academic year as 30 weeks of instructional time and 24 semester hours. Debbie is attending half-time for all three terms. Her payments for each payment period are 17/30, 14/30, and 6/30 of her half-time annual award. For the first term, you may disburse 15/30 of her award at the beginning of the term and the final 2/30 only after the 15th week of instructional time in the term. However, if Debbie establishes eligibility in the 16th week of the term, you can make a disbursement of 17/30 of the annual award at that time. Her award for the 2nd and 3rd terms may be disbursed in a single disbursement. For more details, see 34 CFR 690.63(f).

Formula 3: Payments for standard terms

Montgomery College has a semester-based program with a 2-semester academic calendar that comprises 28 weeks of instructional time. The program’s academic year is defined as 24 semester hours and 30 weeks of instructional time. If both semesters are 14 weeks in length, the Pell payment for a full-time student with a Scheduled Award of $4,550 would be calculated as follows:

(14 weeks1 in term ÷ 30 weeks1 in academic year) × $4,550 = $2,123.33

1These fractions use weeks of instructional time as defined in Chapter 1 of this volume, which will not necessarily be the same number as the calendar weeks in an academic year.
Formula 3: Payments for nonstandard terms of equal length

Edwards University has a program that consists of four 8-week terms. Edwards University defines the academic year as 40 quarter hours and 32 weeks of instructional time. Because this program does not use standard terms (semesters, trimesters, or quarters), Edwards University must use Formula 3 to calculate Pell disbursements for students in the program. Let’s use the example of a student who attends all four terms for 10 quarter- hours each term in the award year, and has a Scheduled Award of $3,750.

Because the program has nonstandard terms, Edwards University must determine the number of credit-hours required for full-time enrollment in each term, as follows:

(8 weeks1 in term ÷ 32 weeks1 in academic year) × 40 quarter hours = 10 quarter hours

A student enrolled for 7 hours could be paid as a half-time student (7/10 = 0.7, which is less than 3/4 [0.75] but greater than 1/2 [0.5] ). Because the student in our example will be enrolled on a full-time basis (10 hours each term), the student’s annual award is the same as the Scheduled Award. This is a term-based, credit-hour program, so the payment period is the term.

To determine the student’s payment for each payment period, multiply the annual award by the length of the nonstandard term compared to the length of the academic year:

(8 weeks1 in term ÷ 32 weeks1 in academic year) × $3,750 = $937.50

1These fractions use weeks of instructional time as defined in Chapter 1 of this volume, which will not necessarily be the same number as the calendar weeks in an academic year.
Formula 3: Payments for nonstandard terms of unequal length

Ryne is enrolled in a semester-hour program at Hendricks University that has a 10-week nonstandard term between two 12-week nonstandard terms. The terms do not overlap. The academic year for the program is defined as 34 weeks of instructional time and 24 semester hours. Courses are offered in whole credits. Hendricks must use Formula 3 to calculate Pell Grant payments for students in this program. Ryne enrolls for six semester hours in each of the three terms. Because the program has nonstandard terms, Hendricks must determine the number of credit-hours required for full-time enrollment in each term, as follows.

For the first and third term:

(12 weeks1 in term ÷ 34 weeks1 in academic year) × 24 semester hours = 8.47 (round up to 9)

For the second term:

(10 weeks1 in term ÷ 34 weeks1 in academic year) × 24 semester hours = 7.06 (round up to 8)

A student must enroll in nine semester hours (rounded up from 8.47) in the first and third terms, and eight semester hours (rounded up from 7.06) in the second term, to be full-time. Ryne is enrolled half-time in the first and third terms (6 semester hours/9 semester hours = 0.67). He is enrolled three-quarter time in the second term (6 semester hours/8 semester hours = 0.75). The COA does not need to be prorated because the fall through spring terms provide the same number of weeks of instructional time as in the academic year definition. Further, the school has determined the costs for a full-time student for a full academic year.

The half-time payment schedule shows that Ryne is eligible for an annual award of $2,075. Because this is a term-based credit-hour program, the payment period is the term. To calculate Ryne’s payment for the first and third terms, the school uses the fraction 12/34:

(12 weeks1 in term ÷ 34 weeks1 in academic year) × $2,075 = $732.35

Ryne’s payment for each of the first and third terms will be $732.35.

Because Ryne’s enrollment status for the middle term is three-quarter time, the payment for that term is based on a three-quarter-time annual award of $3,075. To calculate the payment for the middle term, the school uses the fraction 10/34:

(10 weeks1 in term ÷ 34 weeks1 in academic year) × $3,075 = $904.41

Ryne’s payment for the middle term (the second payment period) is $904.41.

1These fractions use weeks of instructional time as defined in Chapter 1 of this volume, which will not necessarily be the same number as the calendar weeks in an academic year.

Pell Formula 4: Clock-Hour and Non-Term Credit-Hour Programs

All clock-hour and non-term credit-hour programs must use Formula 4.

34 CFR 690.63(a) and (e)

Checking half-time enrollment status

For clock-hour programs and for non-term credit-hour programs, enrollment status only makes a difference if the student is attending less-than-halftime. If that’s the case, only certain components of the COA are used. (See discussion in Chapter 2.)

The annual award for a student in a clock-hour or non-term credit-hour program is taken from the full-time payment schedule, even if the student is attending less than full-time.

Calculating payment amounts

Pell Grants must be paid in installments over the course of the academic year or program of study 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. You must use the rules discussed in Chapter 1 to determine the payment periods for clock-hour and non-term credit-hour programs.

In non-term programs, the student’s Pell award is not reduced for part time enrollment unless the student is enrolled less than half-time in which case the student’s COA must be adjusted. However, if the program is less than an academic year (in either clock/credit-hours or weeks of instructional time), students enrolled in that program won’t receive a full Scheduled Award.

As in the case of the other formulas, you must perform comparable prorations of the award for each payment period in the student’s program. The calculation for the payment period prorates a student’s Scheduled Award based on the number of credit or clock-hours in the payment period as they compare to the credit or clock-hours in the defined academic year or the number of weeks of instructional time in the payment period as they compare to the weeks of instructional time in the academic year. To determine the payment for a payment period, multiply the student’s Scheduled Award by the lesser of

Number of credit/clock-hours in the payment period ÷ Number of credit/clock-hours in the program’s academic year

or

Weeks1 in the payment period ÷ Weeks1 in the program’s academic year (at least 30 for credit-hour, at least 26 for clock-hour)

1These fractions use weeks of instructional time as defined in Chapter 1 of this volume, which are not necessarily the same number as the calendar weeks in an academic year.

Enrollment status standards for clock-hour and other non-term programs

For non-term programs, the enrollment minimums are:

  • Full-time in credit-hours: 24 semester hours, 24 trimester hours, or 36 quarter hours per academic year.

  • Less than half-time status is defined as less than half of the workload of the minimum full-time requirement.

  • Full-time in clock-hours: at least 24 clock-hours per calendar week.

Coursework completion requirement & withdrawal/re-entry

Students in non-term programs must successfully complete a payment period to receive subsequent payments. We’ll discuss the effect of withdrawal and re-entry into a program in Volume 5.

Formula 5: Correspondence Study

Formulas 5A & 5B are formulas that must be used for correspondence students. Because there are only a small number of Pell Grants made to correspondence students, the formulas for correspondence study programs are covered in Appendix B of this chapter.

Payments for credit-hour non-term program (Formula 4)

Chance is enrolled at Strasburg Technical Institute (STI) and has a Scheduled Award of $4,250. His program is 24 quarter hours and 20 weeks of instructional time in length. The academic year for the program is defined as 36 quarter hours and 30 weeks of instructional time. STI has established two payment periods of 12 quarter hours and 10 weeks* each for Chance’s program. To determine the disbursement for the payment period, STI must multiply the Scheduled Award by the lesser of: the fraction comparing the hours in the payment period to the hours in the academic year, or the fraction comparing the weeks in the payment period to the weeks in the academic year. The two possible calculations would be as follows:

  1. (12 quarter-hours in payment period ÷ 36 quarter-hours in academic year) × $4,250 = $1,416.66; or

  2. (10 weeks1 in payment period ÷ 30 weeks1 in program’s academic year) × $4,250 = $1,416.66

Since the two resulting fractions (12/36 and 10/30) are the same, there technically is no “lesser” fraction and you can use either to get $1,416.66. Thus, Chance’s payment for the first payment period will be $1,416.66. Chance can receive this payment when he begins the program. STI can make the payments of $1,416.66 for the second payment period after STI has determined that Chance has successfully completed 12 quarter hours and 10 weeks of instructional time of the program.

1The fractions in these examples use weeks of instructional time as defined in Chapter 1, which will not necessarily be the same number as the calendar weeks in an academic year.
Payments for clock-hour program (Formula 4)

Chance is enrolled in a program 900 clock-hours and 22 weeks of instructional time in length at Evers Technical Institute (ETI) and is eligible for a Scheduled Award of $2,650. ETI defines the academic year for the program based on the regulatory minimums: 900 clock-hours and 26 weeks of instructional time. To calculate Chance’s payment, ETI calculates the payment for each payment period as follows: It multiplies the Scheduled Award ($2,650) by the lesser of: the fraction comparing the hours in the payment period to the hours in the academic year, or the fraction comparing the weeks in the payment period to the weeks in the academic year. The two possible calculations would be as follows:

  1. (450 clock-hours in the payment period ÷ 900 clock-hours in the academic year) × $2,650 = $ 1,325; or

  2. (11 weeks1 in the payment period ÷ 26 weeks1 in the program’s academic year) × $2,650 = $ 1,121.15

In this example, the lesser fraction is the one based on weeks. Therefore, Chance’s payment for the first payment period will be $1,121.15. He can get this payment when he begins the program. He can receive his second payment of $1,121.15 after he successfully completes the 450 clock-hours and 11 weeks in the first payment period.

1The fractions in these examples use weeks of instructional time as defined in Chapter 1, which will not necessarily be the same number as the calendar weeks in an academic year.

Summer Terms & Other Crossover Payment Periods

Payment periods don’t always fall neatly into one award year or another. When a payment period falls into two award years—that is, it begins before July 1 and ends on July 1 or later—it’s called a “crossover payment period.” The formula for calculating the payment for a crossover payment period is the same as that for any other payment period in the award year.

Crossover Payment Periods
34 CFR 690.64
GEN-17-06

Crossover payment from the proper award year

For Pell purposes, you must consider a crossover payment period to occur entirely within one award year and calculate the student’s Pell award and disburse Pell funds from the award year selected (if you only have a valid SAR/ISIR from one award year, you must rely on that record and the award year to which the valid SAR/ISIR pertains). Besides these considerations, the decision about which award year to use is based on the student’s remaining eligibility in the earlier award year. This assessment is made according to your school’s payment period policy, which for crossover Pell may apply to:

  • an individual student;

  • all students or a category of students without exception; or

  • all students or a category of students with allowance for an exception for an individual student.

Although you may, within the limitations described below, assign the crossover payment period to either of the relevant award years, you must make the assignment as you determine will be most beneficial to students.

You may assign the Pell Grant award to a different award year than the rest of the student’s Title IV aid. You can make a payment for a crossover payment period out of either award year, if the student has a valid SAR/ ISIR for the award year selected. You may assign two consecutive crossover payment periods to the same award year. For example, you could treat summer 2020 and summer 2021 as both being in the 2020-21 award year. You may also source the Pell funds from different award years for different students, as their eligibility allows, depending on their remaining eligibility and financial need.

You may not make a payment which will result in the student receiving more than his or her Scheduled Award for an award year, unless the student is enrolled at least half-time and is eligible for a Year-Round Pell award (see Year-Round Pell & IASG section later in this chapter), in which case the student may be eligible to receive up to 150% of their Scheduled Award for the award year.

Term schools: using the formula for summer session

If your school offers a summer term in addition to fall through spring terms that qualify for Formula 1 or 2, you will calculate the student’s payment for the summer term using the same formula that you used to calculate payments for the other terms in the award year to which the summer term is assigned. If you use Formula 3 for Pell Grant calculations in any of the terms in an award year, then you must use Formula 3 for all terms in that program that occur in that award year, including the fall through spring terms. (Note that if your program is a standard-term program in the fall through spring and does not define full-time enrollment in the summer as at least 12 credit-hours, you must use Formula 3 for Pell calculations for all terms in the award year.) With regard to enrollment status, your school must apply its definition of full-time status for the summer term consistently for all FSA program purposes.

COA for summer terms

Costs for summer terms are figured in the same way as for any other payment period; that is, the costs are based on a full-time student for a full academic year. If your school has fall and spring semesters that comprise an academic year, you can’t 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, you may be able to use the same COA for the summer term that you used for the immediately preceding term that the student attended. However, this isn’t possible if the costs are different from the fall through spring, such as a different tuition charge per credit-hour, or if you are required to recalculate the COA. See the end of this chapter for information on when recalculations are required. If it’s necessary to base the student’s COA on the summer term, you must prorate the summer costs to the length of an academic year to establish the cost for a full academic year. See Chapter 2 on prorating costs in the Pell Grant program.

If the summer session is the first term in the award year for that student (for example, your school is paying a student for the summer 2020 term from the 2020-21 award year), you 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, you may have to recalculate the student’s costs for the later term.

Receiving less than the Scheduled Award due to crossover

A student may also receive less than a Scheduled Award in an award year, if the program crosses award years and the student’s Pell Grant award in one of the award years is for a portion of the program that is less than a full academic year.

Crossover Pell and withdrawal

For details on how to perform Return of Title IV Funds calculations in a crossover Pell situation, see Volume 5, Chapter 2 of the FSA Handbook.

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 unless they overlap each other.

When you combine minisessions into a single term (i.e., payment period), the weeks of instructional time in the combined term are the weeks of instructional time from the beginning of the first minisession to the date the last minisession ends. The student’s enrollment status for the entire payment period must be calculated based on the total number of credits the student is projected to take for all sessions. You must project the enrollment status for a student on the basis of the credits the student has:

  • Pre-registered or registered to take for all sessions;

  • Committed to take for all sessions in an academic plan or enrollment contract; or

  • Committed to take for all sessions in some other document.

When you combine the minisessions into a single term, a student cannot be paid more than the amount for one payment period for completing any combination of the minisessions. If the minisessions are not combined into a single payment period, you must treat each minisession as a separate nonstandard term and generally must use Formula 3 to calculate Pell Grant payments for the program. If, for each minisession, you define full-time as at least 12 credit-hours, you may be able to use Formula 1 or 2 if the program otherwise qualifies for one of these formulas.

If a combined minisession term crosses over the June 30-July 1 date, the combined term must be treated as a crossover payment period, regardless of what classes students attend. If your program has two summer sessions and only one of the sessions crosses over the award year date boundary and you do not combine the sessions into a larger term, then only the term that actually spans the award year boundary is considered a crossover payment period.

If the minisessions are combined in a single term and a student does not begin attendance in all of the minisessions that he or she was expected to attend, recalculation of prior disbursements is required based on the resulting changed enrollment status as discussed later in this chapter. Note that if you do not combine the minisession/intersession(s) to create a standard term and the intersession/minisession overlaps with the term to which it is attached, this creates overlapping terms, and the program must be considered a nonterm program. Also, if you use Formula 3 for any of the summer minisessions, or any other nonstandard term (e.g., a winter intersession), remember that you must also use it for all other terms in the award year, including fall through spring.

Minisession enrollment status example

Billy is enrolled in a summer session with three-week minisessions that his school, Williams University, has combined into one term. Williams U. is using Formula 1 to calculate Billy’s combined term, and knows it must define full-time enrollment as at least 12 credit-hours, even though the individual component minisessions may have originally considered full-time to be something less than 12 credit-hours. Billy is enrolled for 6 credits during the combined summer minisession term. Billy’s enrollment status is equal to the proportion of his credits to the school’s definition of full-time for the combined term. Therefore, Billy should be credited with half-time enrollment status for the combined summer term.

Combined minisessions into one term

Ron enrolls part-time at Santo University, which defines its academic year as 24 semester hours and 30 weeks of instructional time. In addition to fall and spring semesters, Santo offers three summer minisessions. Each minisession provides 4 weeks of instructional time. Santo can either combine the minisessions into a single nonstandard term, or treat each session as a separate nonstandard term. The school chooses to combine the sessions into a single payment period providing 12 weeks of instructional time with full-time enrollment in this period defined as 12 semester hours. If Santo meets the conditions for use of Formula 1 in its fall and spring semesters, it can use Formula 1 to calculate Pell Grant payments for this summer session.

Combined mini sessions into one term

Ron enrolls for 3 semester hours in each of the minisessions, so he’s enrolled three-quarter time (9 hours total in the combined term). His applicable Scheduled Award is $3,550 and his annual award (from the three-quarter-time payment schedule) is $2,663. To calculate Ron’s payment, Santo simply divides the annual award by 2, the number of terms in the fall through spring: $2,663 /2 = $1,331.50.

1These fractions use weeks of instructional time as defined in Chapter 1, which are not necessarily the same number as the calendar weeks in an academic year.
Minisessions treated as nonstandard terms

Suppose Santo didn’t combine these minisessions. If it defined full-time enrollment for each 4-week minisession as less than 12 semester hours, it would have to calculate all Pell payments for the program using Formula 3. Because these are nonstandard terms, Santo would have to determine Ron’s enrollment status for each minisession by prorating the standard for full-time enrollment in a full academic year (24 semester hours):

24 semester hours × (4 weeks1 in term ÷ 30 weeks1 in academic year) = 3.2 semester hours (round up to 42)

For each of the 4-week terms, a full-time student must enroll in 4 semester hours, and based on that standard, the 3 semester hours that Ron is attending in each minisession count as three-quarter-time enrollment status. Note that Santo would use the Pell COA for a full-time student attending a full academic year. Santo would determine his payment for each minisession (assuming his Scheduled Award remains unchanged across both award years):

(4 weeks1 in term ÷ 30 weeks1 in academic year) × $2,663 = $355.06

Ron would receive $355.06 for each of the minisessions, for a total of $1,065.18 for the summer. Again, these payments for one or more minisessions that are in the prior award year may need to be reduced if Ron had previously received payments for the fall and spring semesters in the same award year. Also, Santo must use Formula 3 for the fall through spring terms.

1These fractions use weeks of instructional time as defined in Chapter 1, which are not necessarily the same number as the calendar weeks in an academic year.
2Since Santo only offers courses in whole credits

Year-Round Pell & Iraq and Afghanistan Service Grant

Year-Round Iraq & Afghanistan Service Grants are calculated and disbursed in the same manner as Year-Round Pell Grant awards. Note that students eligible for Year-Round Pell awards are still subject to the normal Pell Grant duration of eligibility, sequester, and LEU limits (see DCL GEN-17-06 and Sec. 401(c) of the HEA, and EAs posted April 9, 2020 and June 23, 2020).

Students may be eligible to receive up to 150% of their Scheduled Award for an award year. This provision is called Year-Round Pell (or Year-Round IASG), or additional Pell (or additional IASG). It’s called “Year-Round” because it allows students to receive additional Pell/IASG funds, often in summer terms which are treated as either a header or trailer, whereas without the provision for Year-Round Pell/IASG, a student’s remaining Pell eligibility would often be truncated for a summer term treated as a trailer when the student had already exhausted their Scheduled Award for an award year, or prematurely exhaust the student’s Pell eligibility for an award year if the summer term was treated as a header. A student’s additional aid eligibility is certified by the “Additional Eligibility Indicator” or AEI, in COD.

To be eligible to receive Pell/IASG funds in excess of 100% of their Scheduled Award during a single award year, students must be enrolled at least half-time. For Year-Round Pell (& Year-Round IASG), students do not receive more Pell/IASG funds in each payment period for the same enrollment status, COA, and EFC. Instead, the student receives the same amount as is normally calculated for a payment period, but a student who is enrolled at least half-time and is in all other ways Pell or IASG-eligible may receive Pell or IASG funds for an award year up to 150% of their calculated Scheduled Award (a student may receive funds from the initial Pell/IASG award and from the Year-Round award in the same payment period).

For example, Bob has a Scheduled Award of $5,000 for 2020-21. He attends fall and spring semesters, during which he receives awards of $2,500 for each semester. He begins attendance in the summer 2021 term (which his school treats as a trailer) as a half-time student, and without Year-Round Pell, his Pell eligibility would be exhausted, but through Year-Round Pell, he’ll receive his calculated award, up to $2,500 in additional Pell funds for the summer term.

Year-round Pell & IASG
Consolidated Appropriations Act of 2017 GEN-17-06
COD Technical Reference
Year-Round Pell clock-hour example

Eugene enrolls in Springfield University for an 1125 clock-hour program (over 32.5 weeks, see graphic below). His program occurs entirely within the 2020-21 award year, and has an Academic Year of 900 clock hours and 26 weeks of instructional time. Eugene has a Scheduled Award of $5550.

Springfield awards Eugene $2775 in Pell after he completes each of the first two segments of 450 clock-hours and 13 weeks of instructional time. For the remaining 225 hours and 6.5 weeks of instructional time in the program, Springfield calculates that Eugene would be eligible to receive $1,387.50 in Pell, if his Scheduled Award would allow it. Prior to Year-Round Pell, Eugene would be out of luck, as his Scheduled Award has been expended by the $5550 he’s already received for 2020-21, but with Year-Round Pell, if he is enrolled at least half-time and remains in all other ways Pell-eligible, Eugene is eligible to receive up to an additional 50% of his $5550 Scheduled Award, for a maximum total of $8325.

Adding $1387.50 to the $5550 Eugene has already received, Springfield sees that he will be awarded a total of $6937.50 for 2020-21, which is within his $8325 Year-Round Pell maximum. Note that Springfield does not increase his final award for the award year to match his Year-Round Pell maximum; Eugene’s awards for each term are calculated according to the normal Pell rules.

Year-Round Pell clock-hour example
Year-Round Pell semester example

Gaston attends Green State University. His enrollment begins in the summer, which Green treats as a header to the 2020-21 award year. Gaston is enrolled three-quarter-time in the summer term, and has a Scheduled Award for 2020-21 of $5,795, and an EFC of 550, with a COA of $10,590. Based on these figures, Gaston’s three-quarter-time summer award is $2,173, which is 37.4978% of his Scheduled Award ($5,795).

After the summer term, Gaston continues in the fall and now has time to enroll full-time in Green’s fall semester. His fall Pell award is $2,897.50 (Green disburses 50% of a Scheduled Award for the fall semester). After receiving his fall Pell award, Gaston has received a total of 87.4978% of his Scheduled Award for 2020-21.

Continuing with his program in the spring semester, Gaston again enrolls full-time. Under normal Pell rules, Gaston only has 12.5022% of his Scheduled Award remaining, which would leave him only a maximum Pell award amount of $724.50. However, since he is enrolled at least half-time and meets all of the other standard Pell eligibility criteria, Gaston is eligible for an additional Year-Round Pell award amount of up to 50% of his Scheduled Award. This would mean that he could receive a total of up to $8,692.50 for the award year (though each term’s payment would be calculated per the normal Pell rules, and he may receive less than this).

Since Green normally awards a student 50% of their annual award for a standard spring semester, and knows that their normal award calculation for the term is calculated for Year-Round Pell under the same method as for a student’s initial Scheduled Award, they look at these numbers to see if they would fit within Gaston’s expanded Year-Round Pell 150% Scheduled Award. To do this, they add $2,897.50 for the proposed spring award to the $5,070.50 Gaston has already received for the award year. This totals $7,968, which is within Gaston’s 150% Scheduled Award for 2020-21 of $8,692.50 (i.e. 137.4978% of his annual award, lower than the 150% maximum), so Green is clear to award the spring Pell award of $2,897.50 as calculated.1

Year Round Pell Semester Breakdown

1Note that although Gaston has a Year-Round maximum Pell Scheduled Award of $8692.50, Green does not adjust his spring term Pell award upwards to meet this—the school must calculate and award Gaston’s spring Pell as normal for the term. This also will leave Gaston some remaining Pell eligibility for the remainder of the award year, for example, if he decides to attend during a summer 2021 term.

2The Year-Round Pell Grant award cannot exceed 50% of a student’s Pell grant Scheduled Award. In this example, the 50% is made up of 12.5022% ($724.50) remaining from the initial Pell Grant Scheduled Award and 37.4978% ($2,173) from the Year-Round Pell Grant award. The student has 12.5022% ($724.50) remaining from the Year-Round Pell Grant award for the 2020-21 award year. If the student had used up 100% of his Pell Grant Scheduled Award for Summer 2020 and Fall 2020, the entire Spring 2021 award amount would be from the Year-Round Pell Grant award. Schools may combine the amounts from initial and Year-Round Pell Grant awards and must submit as one amount for reporting to COD.

Calculating and Awarding Remaining Eligibility

The Pell payment for a transfer student is calculated in the same way as for any new student. That is, you must calculate payments for each payment period following the rules given in this chapter. However, a transfer student’s remaining Pell eligibility at your school is reduced if the student received Pell funds for the same award year at any prior schools. You can identify the student’s prior Pell disbursements when you review his or her Financial Aid History in NSLDS and COD.

Calculating remaining eligibility

Once you’ve identified the Pell amounts that a transfer student has already received for the ongoing award year, you must calculate the percentage of the Scheduled Award that has been used. This percentage is calculated by dividing the amount disbursed at the previous school by the student’s Scheduled Award at that school (COD calculates this and you can refer to COD to see what the percentage of remaining eligibility will be for a student).

Pell disbursed at prior school ÷ Scheduled Award at prior school = % of Scheduled Award used

Then subtract this percentage from 100% (or 150%, if the student is enrolled and eligible for a Year-Round award). The result is the maximum percentage of the Scheduled Award that the student may receive at your school. Note that a transfer student receives the same payments as any other student until the limit (up to 150% of a Scheduled Award, see Year-Round Pell & IASG section, previously in this chapter) is reached. Give the student the full amount for each payment period, rather than trying to ration the remaining amount by splitting it evenly across the remaining terms.

A transfer student must repay any amount received in an award year that exceeds his or her Scheduled Award (or in excess of 150% of his or her Scheduled Award, if enrolled and eligible for Year-Round Pell or IASG), unless the school that disbursed the award was at fault by failure to follow the administrative requirements in 34 CFR 668.

Payment period for a transfer student at a non-term school

When a student transfers into a non-term credit-hour or clock-hour program at a new school, that student is starting a new payment period. For non-term programs, you must use the payment period rules described in Chapter 1 to determine the payment periods for the remainder of the student’s program.

However, for a transfer student, the length of the program is the number of clock or credit-hours and the number of weeks of instructional time that the student will be required to complete in the new program. If the remaining clock or credit-hours or weeks of instructional time are half an academic year or less, then the remaining hours and weeks of instructional time constitute one payment period.

Transfer students and remaining eligibility

Consider a student who is eligible for Federal Pell Grant funds and who transfers from School A to School B within the same award year. Before paying any Pell funds to the student, School B must determine the percentage of eligibility remaining for the student. After transferring, a student’s remaining Pell Grant eligibility for a Pell Scheduled Award during an award year is equal to the percentage of the student’s Scheduled Award that remains unused, multiplied by the student’s Scheduled Award at the new school.

School B may pay the student a Pell Grant only for that portion of an academic year in which the student is enrolled and in attendance at School B. The grant must be adjusted, as necessary, to ensure that the funds received by the student for the award year do not exceed the student’s Scheduled Award for that award year or the student’s maximum Lifetime Eligibility Used.

The award for each payment period is calculated using the (full) Scheduled Award. The student receives a full award until the student has received 100% of the student’s remaining eligibility for a Scheduled Award (or 150%, if the student is enrolled at least half-time and otherwise eligible for a Year-Round award) or 600% LEU. This avoids a school having to ration the remaining amount by splitting it evenly across the remaining terms.

To calculate a transfer student’s remaining eligibility for a Scheduled Award, School B must first determine what percentage of the Scheduled Award the student used at School A. Check COD for the most up to date information on what aid has been disbursed to the student at all institutions.

The remainder is the unused percentage of the student’s Scheduled Award— the percentage the student may receive at School B. (Use percentages rather than dollars because a transfer student may have different Scheduled Awards at the two schools; using percentages rather than dollars adjusts for this possible difference.) School B then multiplies the percent of eligibility remaining times the Scheduled Award at School B. The result is the maximum amount of Federal Pell Grant funds the student may receive for his or her Scheduled Award at School B during the balance of the award year.

For more details on transfers, see 34 CFR 690.65, and DCL GEN-01-09.

Transfer Student Remaining Eligibility Example

On August 1, 2020, Ernie enrolled at Maddux Hair Academy. After completing 400 of the 900 clock-hours in his program, Ernie withdrew from school. On February 1, 2021, Ernie enrolled at Bryant Esthetics Institute (BEI) as a transfer student. Ernie was awarded 400 clock-hours of transfer credit in BEI’s 1,000 clock-hour program (the program’s defined academic year is 900 clockhours and 30 weeks of instructional time). Ernie’s program is 600 clock-hours and 20 weeks of instructional time.

When the financial aid administrator (FAA) at BEI examined Ernie’s 2020–2021 ISIR, he found the following entry:

%Sch. Used: 50.0

As Of: 01/28/2020

Pell Verification

EFC: 0

The FAA subtracted the 50% used previously from 100% and found that the percentage of Ernie’s Scheduled Award that remained unused was 50%*. Therefore, Ernie was eligible to receive 50% of his scheduled Pell award of $4,850 during the balance of the award year. In addition, the FAA used the 600 hours and 20 weeks of instructional time remaining in Ernie’s program to establish the appropriate two payment periods (per 34 CFR 668.4(b)), each of 300 clock-hours and 10 weeks of instructional time. The aid administrator performed the required multiplication and determined that Ernie could receive as much as $2,425 (0.50 x $4,850 = $2,425) if he remained enrolled at BEI for the balance of the year.

During the first payment period, Ernie received $1,617 ($4,850 x 300 hours in the period ÷ 900 hours in the academic year) in Pell funds. However, in the second payment period, Ernie could only receive funds until his total Pell at BEI reached $2,425 (his total for the year reached $4,850). Therefore, for the second payment period at BEI, Ernie could only receive $808 ($2,425 – $1,617 = $808).

It’s important to remember that if Ernie received a Direct Loan at Maddux and now wishes to borrow a Direct Loan at BEI, there may be overlapping academic years between the two schools. When there are overlapping academic years, a student’s eligibility for Direct Loan funds will usually be impacted. The method for determining the remaining eligibility for Direct Loan funds is calculated in a very different manner than how we calculated Ernie’ remaining Pell Grant eligibility. Please refer to Chapter 5 of this volume for a complete discussion of this issue.

Also note that when you have a transfer student with overlapping academic years who borrows Direct Loan funds at the second school, that student will have payment periods for most Federal Student Aid Programs (Federal Pell Grant, FSEOG, TEACH, Iraq & Afghanistan Service Grant) that do not align with the loan periods/payment periods in the Direct Loan Program.

*This assumes Ernie was not eligible for a Year-Round Pell or IASG. If Ernie was enrolled and eligible for a Year- Round Pell or IASG, he would be eligible to receive up to 150% of his Scheduled Award, in total. For more details, see the Year-Round Pell & IASG section earlier in this chapter.

Why percentages are used

The reason for using percentages when calculating remaining eligibility is that a student may have different Scheduled Awards at different schools/ programs, and using percentages ensures that a student does not receive more than 100% (or 150%, if enrolled and eligible for a Year-Round award) of the student’s Scheduled Award. For example, the costs of attendance at the two schools may be different. The percentages are also 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.)

Avoiding Pell Grant overawards

A Pell Grant overaward can be caused by a school making an error in reading the Pell payment schedule (for example, using the wrong EFC or COA). A Pell Grant overaward can also be caused by a school using the wrong payment schedule (for example, using the full-time schedule to determine the award for a student who is not registered as a full-time student, or who dropped to less than full time enrollment status before beginning attendance in all classes.

A Pell Grant overaward can also result if an applicant enters incorrect data on a FAFSA and the EFC derived from the incorrect data is smaller than it should be (for more detail about the FAFSA and EFC data, see the Application and Verification Guide). A Pell overaward also exists if a student scheduled to receive a Pell Grant fails to begin class or is otherwise determined to be ineligible for FSA assistance (for example, having exceeded the Lifetime Eligibility Used [LEU]) in COD.

Finally, an overaward exists whenever a student is scheduled to receive or is receiving a Pell Grant for attendance at two or more schools concurrently. All of these Pell Grant overawards must be corrected. For more detail on the requirements and methods of resolving overawards, see Volume 4, Chapter 3. For more detail on liability for and recovery of Pell Grant overpayments, see 34 CFR 690.79.

This is not an exclusive list of all of the ways in which a Pell Grant may be overawarded. In addition to avoiding these mistakes, schools should also be sure to submit timely Pell actual disbursement records to COD, according to the Annual Deadline Date Notice Rules as published on the Knowledge Center.

NSLDS financial aid history and transfer monitoring

Before disbursing FSA funds to a transfer student, you must obtain a financial aid history for the student and you must inform NSLDS about the transfer student so that you can receive updates through the Transfer Student Monitoring Process. The financial aid history will not only identify Pell Grant disbursements that the student received at other schools, but also tell you if the student is ineligible for any FSA aid due to default or overpayment, if the student has reached or exceeded the annual or aggregate loan limits, or if the student has reached the Pell Lifetime Eligibility Used limit (LEU). There are several ways for you to get a student’s financial aid history from NSLDS. You can:

  • Use the NSLDS Financial Aid History section of the ISIR;

  • Log on to the NSLDS Professional Access website and access the data online for a student;

  • For multiple students, use the FAT 001 Web report, which you submit from the Reports tab on the NSLDS site (you retrieve the results through SAIG); or

  • Send a batch TSM/FAH Inform file to request aid history data for several students, which will be returned in either extract or report format through SAIG. The TSM/FAH processes and batch file layouts are posted on the Knowledge Center at the NSLDS reference materials link under Processing Resources.

Pell Grant and Iraq & Afghanistan Service Grant Lifetime Eligibility Used (LEU)

Per the Consolidated Appropriations Act of 2012 (CAA), a student’s maximum duration of Pell eligibility is 6 Scheduled Awards, as measured by the percentage of “Lifetime Eligibility Used” (LEU) field in COD (one Scheduled Award equals 100% LEU). A separate maximum of 600% LEU also applies to Iraq & Afghanistan Service Grant awards. A student is ineligible to receive further Pell or Iraq & Afghanistan Service Grant funds if they have reached or exceeded the 600% limit for the applicable program (i.e., Pell or Iraq & Afghanistan Service Grant). For Pell, this limitation is not limited to students who received their first Pell Grant on or after July 1, 2008, as was the previous limit of 9 Scheduled Awards. Instead, it is tracked to the beginning of the program (1973-74).

Pell & Iraq & Afghanistan Service Grants LEU
Consolidated Appropriations Act of 2012 HEA Section 401(c)
DCL GEN-12-01
DCL GEN-13-14
Electric Announcement April 18, 2014
2021-22 ISIR Guide

The LEU levels for Pell and Iraq & Afghanistan Service Grants are separate and are tracked independently. For example, a student might have 400% Pell LEU and 300% Iraq & Afghanistan Service Grant LEU and still be potentially eligible for either program, or 600% Pell LEU and 400% Iraq & Afghanistan Service Grant LEU and be potentially eligible for only an Iraq & Afghanistan Service Grant award. Rounding rules do not apply if the amount disbursed would place the student’s LEU over 600%.

The Department provides weekly Pell LEU reports through the SAIG Mailbox under Message Class PGLEXXOP (where XX = the year) for your Pell-eligible applicants (and students who listed your school code on their FAFSA) who have a Pell LEU greater than or equal to 450%. The COD website will show the current Pell LEU level for all aid recipients (updated as transactions are processed). COD also provides the LEU for the Pell Multiple Reporting Record (MRR), Pell Reconciliation Report, and Pell Year-to-Date file.

Students will fall into one of the following categories, which will have various effects:

  • Student not on report (Code “N” on the student’s ISIR under Lifetime Limit Flag) Students in this category have LEU of less than 400%. These students’ Pell awards will be awarded as normal, since even if they receive a full Scheduled Award, they will not go over the 600% LEU maximum.

  • LEU greater than 400% but less than or equal to 500% (Code “H” on the student’s ISIR under Lifetime Limit Flag) Students in this category will likely have Scheduled Award eligibility for 2020-21. However, a student’s 2020-21 Pell eligibility may be reduced if, for example, another Pell disbursement is reported after a report has been created, putting the student’s 2020-21 baseline LEU over 500%.

  • LEU greater than 500% but less than 600% (Code “C” on the student’s ISIR under Lifetime Limit Flag) These students will not have full Pell eligibility for 2020-21, since their baseline LEU has less than 100% remaining.

  • LEU 600% or higher (Code “E” on the student’s ISIR under Lifetime Limit Flag) These students will have no Pell eligibility remaining, as they have already exceeded the maximum lifetime eligibility used amount as defined in the CAA.

To aid in identifying students who are approaching their LEU limits, COD returns warning code 177 or 178 when a student’s Pell LEU is near or exceeds 600%. COD has a hard reject (Edit 201) for both Pell and IASG actual disbursements with a Pell or IASG LEU greater than 600%. Also, you will be able to see this data in the Common Record Response, and LEU is also visible in the NSLDS system. However, the Central Processing System (CPS) reports only the Pell Grant LEU limit flags and percentages on SARs and ISIRs. COD calculates a student’s LEU to 3 decimal places, and you may round awards as described earlier in this chapter in the “Ground rules for Pell Grants” graphic box, however, you may not round up if that would cause the student to exceed either their Scheduled Award or 600% LEU.

To calculate an award for a student whose LEU level will reduce the student’s eligibility (i.e., an LEU greater than 400% but less than 600%),you must first check the most current LEU level in COD. Subtract the LEU percentage from 600%, then multiply the student’s Scheduled Award by the resulting percentage. For example, Jack has 534% LEU in COD. His school subtracts 534% from 600%, leaving him with 66% of a Scheduled Award remaining. His Scheduled Award is $5,650, so his school multiplies $5,650 by 0.66, which equals $3,729, which is then disbursed per the normal Pell formula and payment period rules.

For students whose eligibility is less than a full Scheduled Award, you award the student a Pell or Iraq & Afghanistan Service Grant as you would for a transfer student who received Pell at another school during the same award year. That is, you determine the student’s remaining Pell or IASG eligibility, as a percentage of LEU, and then award each payment until that eligibility is used (see the earlier section in this chapter entitled “transfer students”).

Restoring Pell eligibility for students who attended closed schools

There is a limited circumstance in which Pell eligibility may be restored to certain students who attended schools which are now closed. Note that Total Eligibility Used (TEU) is capped at 100% (or 150% in the case of Year- Round Pell) and is the maximum Pell a student may receive during a single Award Year, whereas LEU is the student’s sum total of all Pell eligibility used, across all award years. A closed school may be considered for the Pell restoration process if all of the following are true:

  • The school is officially closed with the Department;

  • The school closed after 1994 (i.e., 1995 to present);

  • All final disbursements have been submitted to the COD system and accepted by the Department;

  • All final enrollment data has been submitted to NSLDS so that the Department may determine if students are eligible for restoration; and

  • The school has completed the close-out process with the Department.

A student may be eligible for Pell eligibility restoration if all of the following are true:

  • The student received a Pell Grant disbursement at an eligible closed school;

  • The student did not complete their program at the closed school; AND

  • The student had a valid enrollment status at the closed school within two years of the school’s closure.

Students who are potentially eligible for additional Pell because some or all of their Pell eligibility has been restored are sent a targeted email. Schools are notified of Pell eligibility restorations for students associated with their school through a variety of sources, including:

  • COD Warning Edit #221;

  • Targeted email with instructions to download a list of affected students from the COD web; updated LEU within response file; and

  • Details of the LEU adjustment(s) display on the Pell LEU History screen.

COD sends the updated LEU to NSLDS. For more detail on how this is handled in COD, please refer to the April 3, 2017 Electronic Announcement and the attachment to the October 4, 2017 Electronic Announcement.

Changes in LEU

A student’s LEU changes whenever he or she receives a Pell or IASG disbursement (up or down), and may change any time a student’s Scheduled Award is adjusted. It may also change through an LEU adjustment made based on an LEU Dispute, Closed School Restoration, or other adjustment type deemed necessary by the Department.

A student’s Pell or IASG LEU can limit the student’s Pell or IASG eligibility for an award year. For example, since the maximum LEU is 600%, if a student’s Pell or IASG award originally was calculated based on an LEU of 550%, then that student’s award would be limited to 50% of the Scheduled Award. A change to a disbursement in the current or previous award year may alter a student’s LEU. For details on LEU limitations, see the Pell Grant and Iraq & Afghanistan Service Grant Lifetime Eligibility Used guidance earlier in this chapter.

When a school becomes aware that a student’s LEU has been adjusted (after being notified by the student, or the Department through a pushed ISIR or a warning edit in COD, or through LEU Dispute communication), it should determine whether the adjustment affects the student’s eligibility for Pell or IASG in the current or most recently completed award year.

If the student becomes eligible for additional Pell or IASG funds as a result of a change to the student’s LEU, the school must make a correction to the student’s award and make any disbursements of Pell or IASG funds for which the student is now eligible and that the school is permitted to make under the late and retroactive disbursement requirements (for more detail on disbursement requirements and timing, see Volume 4, Chapter 2, Disbursing FSA Funds). Note that, as with any retroactive or late disbursement of Pell Grant funds, the school should base its calculation of such disbursements on only the classes that the student completed for the earlier period.

Pell Total Eligibility Used (TEU) & Restoring Pell Eligibility for students who attended a closed school

The Department is working to update TEU/LEU data for eligible students who attended closed schools. You may receive Pell POP notifications for such students and should review these reports carefully. The COD system will have the most current Pell LEU data, and you should look for Pell Restoration targeted emails, and review the weekly Pell LEU reports, especially for Pell recipients who have a Pell LEU of 450% or higher. For more details, see the following Electronic Announcements: December 21, 2016, April 3, 2017, and October 4, 2017.

NSLDS Reporting requirements

For details on NSLDS reporting requirements for Pell, including reporting of additional data, reporting at the academic program level, and more frequent reporting, see DCLs GEN-14-07 and GEN-14-17 and the February 11, 2015 Electronic Announcement.

Declining and/or returning Pell funds

A student may decline or return all or part of a disbursement of Pell Grant funds that they are otherwise eligible to receive or have received (returns may only be made in the same award year as the funds were received). This should be a rare action on the part of students and need not be advertised as a possibility by your school. For more detail on the requirements of declining or returning Pell funds, see DCL GEN-12-18.

Pell Grant LEU Disputes

A school or student may dispute the accuracy of a student’s Pell Grant data which resulted in the student’s LEU percentage in COD. It is the responsibility of the student’s current school to coordinate the resolution of the dispute. You may create, view, and edit Pell LEU disputes (including uploading documentation) using the COD Web Portal. For more detail, see the Electronic Announcements posted June 27, 2013 and April 18, 2014.

Pell Recalculations

Initial calculation

An initial calculation is the first calculation that is made on or after the date the school has received a Department-produced EFC (this may be an EFC from a SAR/ISIR, FAA Access, or FAFSA.gov) such as the student’s initial SAR or ISIR with an official EFC, and uses the enrollment status at the time of the initial calculation. If you’ve estimated the student’s eligibility prior to receiving a SAR or ISIR for the student, you must confirm prior estimated eligibility or determine the student’s eligibility at the time the SAR or ISIR is received.

You should document the date that you initially calculate a student’s Pell Grant. The earliest date is the date of receipt of a Department-produced EFC, such as on a SAR or ISIR (assuming the school has a documented or projected enrollment status for the student). If you fail to document the date of the initial calculation, you must use the later of (a) the date that the SAR or ISIR is first received and the student’s enrollment status as of that date, or (b) the date the student enrolls.

Your school is considered to have received the ISIR on the date it was processed. This date is labeled “Processed Date” on the ISIR. In the case of a SAR, your school is considered to have received it on the date processed unless you document a later date. The processing date on a SAR is the date above the EFC and, on a SAR Acknowledgment, the “Transaction Processed Date.”

34 CFR 690.80

Change in the EFC

If the student’s EFC changes due to corrections, updating, or an adjustment, and the EFC change would change the amount of the Pell award, you must recalculate the Pell award for the entire award year. If, as a result of the recalculation, the student has received more than his or her award amount, then the student has received an overpayment. In some cases, you may be able to adjust an award) by reducing or canceling later payments to the student (see Volume 4, Chapter 3, Overawards and Overpayments, for more information).

A student selected for verification can be paid based on the corrected output document that you receive during the “verification extension” (120 days after the student’s last day of enrollment, not to extend beyond the deadline date established by a Federal Register notice). For example, if you receive a reprocessed ISIR reflecting the results of the student’s verification during the extension period and the ISIR has a lower EFC than the previous ISIR (increasing the student’s eligibility), you calculate the student’s Pell Grant based on the valid ISIR.

SAR/ISIR with different EFC

If you receive a SAR or ISIR with an EFC different from the one you used for the payment calculation, you must first decide which document is valid. If the new information is the correct information, the new SAR or ISIR is the valid record. In most cases, you must recalculate the student’s Pell award for the entire award year based on the new EFC. For more information on SARs, ISIRs, and EFC, see the Application and Verification Guide.

Change in enrollment status

You must report changes to a student’s enrollment status to NSLDS in a timely manner. Any change requiring a recalculation of award may also require an update to the student’s enrollment status. If the student doesn’t begin attendance in all of his or her classes, resulting in a change in the student’s enrollment status, you must recalculate the student’s award based on the lower enrollment status. A student is considered to have begun attendance in all of his or her classes if the student attends at least one day of class for each course in which that student’s enrollment status was determined for Federal Pell Grant eligibility. Note that clock-hour and non-term programs are always based on full-time enrollment status for Pell.

Your school must have a procedure in place to know whether a student has begun attendance in all classes for purposes of the Federal Pell Grant Program. The Department does not dictate the method a school uses to document that a student has begun attendance, however, a student is considered not to have begun attendance in any class in which the school is unable to document that attendance.

If you recalculate a Pell award because the student’s enrollment status has changed, you must also take into account any changes in the student’s costs at that time. For example, if a student enrolls full-time for the first semester and then drops to less than half time during that semester, the student’s costs will change, because only certain cost components are allowed for less-than half-time students. You must use the cost for a less-than-half-time student for a full year to calculate the student’s less-than-half-time award. You must not combine the two costs or average them.

The regulations don’t require any recalculation for changes in enrollment status after the student has begun attendance in all of his or her classes. However, your school may have a policy of recalculating an award if a student’s enrollment status changes within a term. If such a policy is established, it must take into account any changes in the student’s COA and must be applied consistently to all students in a program. If your school chooses to recalculate for a student whose enrollment status increases from half-time to full-time, it must also recalculate for a student whose enrollment status decreases. If your school establishes a policy allowing optional recalculations for an educational program, this policy must be in writing.

Your school’s policy may set a date after which Pell Grants will not be recalculated for enrollment status changes. For example, you could establish a policy that you will recalculate Pell awards only for enrollment changes that occur up to the “add/drop” date of a term. This policy is true regardless of whether there is compressed coursework.

The initial calculation of a student’s Pell Grant may occur subsequent to the “add/drop” date of the term, including terms with compressed coursework. If that is the case, you must use the student’s effective enrollment status on the date of the initial calculation, and there would be no recalculations of the student’s Pell Grant for the term due to a subsequent change in enrollment status, assuming the student began attendance in each class. If the student’s payment for the term is being disbursed in a subsequent payment period, you may pay the student only for the coursework completed in the term.

If you don’t establish a policy for recalculation within a term, a student who begins attendance in all classes would be paid based on the initial calculation, even if his or her enrollment status changes before the disbursement is made. If the student withdraws from all of his or her classes (or doesn’t begin attending any classes), you must follow the procedures discussed in Volume 5.

In a term program that uses credit-hours, you must calculate a student’s payment for each term based on the enrollment status for that term. If a student attended full-time for the first term and then enrolled half-time in the second term, you must use the half-time enrollment status to calculate the student’s payment for the second term.

In the case of programs offered with compressed coursework or modules within the terms, your school may adopt a policy of setting the date based on the add/drop date of the last class in which the student enrolls, or is expected to enroll, for the term. In this circumstance, your school must take into account all adjustments to the enrollment status, both increases and decreases, up to the add/drop date of the student’s last class.

Enrollment change within payment period example

Johnathan registers for a full-time course load at Coulton College, and Coulton initially calculates a full-time award for him. He begins attending all of his classes but subsequently drops to half-time. Depending on Coulton’s recalculation policy, Johnathan may still be paid based on full-time enrollment as long as he’s otherwise eligible for payment. On the other hand, if Coulton did not receive Johnathan’s first processed valid SAR or ISIR with an official EFC until after he dropped to half-time enrollment, the Pell initial calculation would be based on his enrollment status at the time the output document was received (half-time).

Change in COA

When a student’s COA changes during the award year, and his or her enrollment status remains the same, you may (but are not required to) establish a policy under which you recalculate the student’s Pell Grant award. If you choose to establish a policy under which you recalculate Pell for changes in costs, you must consistently apply that recalculation policy to all students in the program.

Enrollment change recalculation example

Sammy registers for a full-time course load (15 credit-hours), and Danbury College makes a first-term disbursement on that basis 10 days before the term starts. When the term starts, Sammy only begins attendance in three classes (9 credit-hours). Danbury must recalculate Sammy’s Pell award based on the lower enrollment status. Any difference between the amount Sammy received and his new recalculated award is an overpayment. See Volume 4, Chapter 3, Overawards & Overpayments, for more detail on overpayments.

Tuition and fee charges and recalculation

If the school recalculates a student’s Pell Grant due to a change in enrollment status, continuing to charge tuition and fees for credithours no longer included in the student’s enrollment status for Pell Grant purposes does not affect the requirement to recalculate the student’s Pell Grant. For example, Jayson enrolls as a full-time student at Wilson University with 12 credits, but never starts attendance in a 3-credit class that starts after the school’s “add/ drop” date. Jayson’s award must be recalculated as three-quarter-time even though the college charges tuition for any classes dropped after the “add/ drop” date and continues to charge Jayson for 12 credits.

Appendix A

Pell Formula 2: Calculations for Standard-Term Programs With Less Than 30 Weeks in Fall Through Spring

The regulations provide an option for standard-term programs whose fall through spring terms provide less than 30 weeks of instructional time. Formula 2 may be advantageous for your summer term calculations. You may use Formula 2 if the program:

  • has an academic calendar that consists of two semesters or trimesters (in the fall through the following spring) or three quarters (in the fall, winter, and spring);

  • does not have overlapping terms; and

  • measures progress in credit-hours and defines full-time enrollment for each term in the award year as at least 12 credit-hours.

Formula 2 Alternate calculation

Under Formula 2, you can perform the same alternate calculation as performed under Formula 1 if the weeks of instructional time in the defined academic year are the same as the total number of weeks of instructional time in all the terms in the award year. See the example for alternate calculation under the discussion of Formula 1 earlier in this chapter. For more information, see 34 CFR 690.63(a)(2) and 690.63(c).

Formula 2: Calculation for standard terms with fall through spring terms less than 30 weeks

The regulations offer an alternative formula for standard-term programs with fall through spring standard terms that provide less than 30 weeks of instructional time. The significant effect of this formula is to allow you to pay the same Pell amount for the summer term as you would for one of your traditional fall through spring terms. To use this formula, the program must have two semesters or trimesters (in the fall through the following spring) or three quarters (in the fall, winter, and spring), with no overlapping terms, and define full-time enrollment for each term in the award year as at least 12 credit-hours.

Let’s take the example of Javier, who is attending Heyward College, which has fall and spring semesters of 14 and 15 weeks, and a summer term of 10 weeks. Heyward defines the academic year of Javier’s program as 24 semester hours and 30 weeks.1 His Scheduled Award is $3,450, and he is attending as a full-time student. Because the fall and spring terms provide less than the minimum 30 weeks of instructional time for an academic year, Javier’s full-time award is prorated as follows:

(29 weeks1 in term2 ÷ 30 weeks1 in academic year) × $3,450 = $3,335

This prorated amount is then divided by the number of terms: $3,335 ÷ 2 = $1,667.50

Javier will receive $3,335 for his attendance in both semesters. Note that this is less than his Scheduled Award; he may be able to receive the remainder of his Scheduled Award, plus up to an additional 50% of his Scheduled Award, if he enrolls at least-half time during the summer; see the Year-Round Pell & IASG section earlier in this chapter.

The difference between Formula 2 and Formula 3 lies in whether you must make a separate calculation for each term. Under Formula 2, you do not have to perform a separate calculation based on the length of each term. Javier’s Pell eligibility as a full-time student would be $1,667.50 under Formula 2. If Heyward College used Formula 3, the annual award would be prorated based on the length of each term: 14 weeks (14/30), 15 weeks (15/30), and 10 weeks (10/30), and Javier’s payments for the payment periods would be $1,556.33, $1,667.50, and $1,111.66, respectively.

Javier has remaining Pell eligibility for the summer term under both formulas. Javier may have additional eligibility for summer if he is enrolled at least half-time and eligible for Year-Round Pell or IASG; for more details, see the Year-Round Pell & IASG section earlier in this chapter.

1These fractions use weeks of instructional time as defined in Chapter 1, which are not necessarily the same number as the calendar weeks in an academic year.
2Fall through spring.

Appendix B

Pell Formula 5: Calculations for Correspondence Study Programs

Students enrolled in correspondence courses are eligible for aid under FSA programs only if the courses are part of a program leading to an associate’s, a bachelor’s, or a graduate degree. Also, to be eligible, a correspondence program must meet the criteria for an eligible program (see Volume 2 of the FSA Handbook: Institutional Eligibility and Participation). The regulation pertaining to Pell for correspondence programs is found in 34 CFR 690.66.

Pell COA (correspondence)

The cost of attendance for correspondence programs is limited to tuition and fees, and in certain cases, books and supplies. Traditionally, books and supplies have been included as part of the correspondence program’s tuition. If books and supplies are not included in the program’s tuition, they may be counted as costs, for either a residential or nonresidential period of enrollment. As always, the cost of attendance must be based on the costs for a fulltime student for a full academic year for the relevant component (for correspondence COA, there would be no room and board, etc.). If the student’s program or period of enrollment, as measured in credit-hours, is longer or shorter than an academic year as measured in credit-hours, the tuition and fees for the program or enrollment period must be prorated.

Because the correspondence study cost of attendance for the nonresidential component only includes costs associated with credit-hours, your school always uses the credit-hour-related fraction to prorate the cost of attendance as follows (because there are no costs associated with weeks of instructional time in the correspondence cost of attendance, your school has to prorate the cost only if the number of hours in the program is shorter or longer than in an academic year):

Credit-hours in program’s definition of an academic year ÷ Credit-hours to which the costs apply

The resulting amount is the full-time, full-academic-year cost used for calculating Pell Grant eligibility. When there is a residential portion in a correspondence student’s program, Formula 3 or 4 (whichever applies) is used to calculate the student’s payment for a payment period for a residential portion. Refer to Formula 3 or 4 guidelines, including COA determinations, for this circumstance.

Pell enrollment status (correspondence)

Students enrolled in programs of correspondence study are considered to be no more than half-time students, even if they’re enrolled in enough coursework to be full-time. However, if the correspondence study is combined with regular coursework, the student’s enrollment status might be more than half-time.

A student enrolled only in a non-term correspondence program always has his or her award calculated based on the half-time payment schedule. For a student enrolled in a term-based correspondence program, your school must determine whether the student is enrolled half-time (six or more credit-hours in a term) or less-than-half-time (fewer than six credit-hours in a term). Special rules are used to determine the student’s enrollment status when the student is enrolled in a combination of regular and correspondence coursework.

Pell correspondence payment periods & timing of payments

For a non-term correspondence program, there must be two equal payment periods in each academic year. Each payment period is the lesser of half the academic year or half the program (measured in credit-hours). In addition, you can’t disburse a Pell payment for the first payment period until the student has completed 25% of the work in the academic year or the program, whichever is shorter. You can’t make the second payment until the student has completed 75% of the work in the academic year or program.

For a term-based correspondence program, as for other term-based programs, the payment period is the term. However, you can’t disburse the Pell for a payment period until the student has completed 50% of the lessons or completes 50% of the work for the term, whichever is later.

If the correspondence program has a required period of residential training, you must treat the residential training as an additional payment period and determine the payment for that payment period using either Formula 3 or Formula 4. Note that the correspondence portion of the program is still treated as a separate portion of the program that’s divided into two equal payment periods.

Pell calculations in correspondence programs

Formula 5 is used for students enrolled only in correspondence courses (not including residential components of correspondence programs). There are two versions of Formula 5: Formula 5A (which is similar to Formula 4) is used for non-term programs, and Formula 5B (which is similar to Formula 3) is used for term-based programs. For a residential component of a correspondence program, your school must use either Formula 3 or Formula 4. If the residential component is a term, your school uses Formula 3; otherwise, it uses Formula 4.

For non-term correspondence programs, this step of the calculation is similar to the step under Formula 4. For term correspondence programs, this step is the same as under Formula 3.

For the Pell calculation, you are required to determine the number of weeks of instructional time in the program by preparing a written schedule for the lessons that the student will submit. A non-term correspondence program must require at least 12 hours of preparation per week. A termbased correspondence program must require at least 30 hours of preparation per semester hour or at least 20 hours of preparation per quarter-hour during the term.

Correspondence payment periods
Non-term — 34 CFR 690.66(b)
Term — 34 CFR 690.66(c)(3),(c)(4)

Non-term correspondence program—Formula 5A

You first multiply the annual award (taken from the half-time payment schedule) by the lesser of:

Number of credit-hours in the payment period ÷ Credit-hours in program’s academic year definition

or

Weeks1 in the payment period ÷ Weeks1 in program’s academic year definition

Term correspondence program—Formula 5B

You multiply the annual award (taken from the half-time or less-than half- time payment schedule) by the weeks of instructional time in the term divided by the weeks in the academic year:

Weeks1 in term ÷ Weeks1 in program’s academic year definition

A single disbursement for a payment period can never be more than 50% of the annual award. If the resulting amount is more than 50% of the annual award, your school must make the payment in at least two disbursements in that payment period. You may not disburse an amount that exceeds 50% of the annual award until the student has completed the period of time in the payment period that equals 50% of the weeks of instructional time in the program’s academic year definition.

1Note: These fractions use weeks of instructional time as defined in Chapter 1 of this volume, which are not necessarily the same number as the calendar weeks in an academic year.

Correspondence multiple formulas exception

If a correspondence student has one or more payment periods in an award year that contain only correspondence study and one or more payment periods in the same award year that contain a residential portion, your school would use two different formulas for determining a student’s payment for each payment period. This instance is the only one in which a school would use two different Pell formulas within the same award year for students in the same program.

Academic coursework

The term academic coursework does not necessarily refer to credits. If a student does not earn any credits until the end of the program, it may refer to the lessons or other measures of learning within a course or a program. For instance, if a course or program is made up of 40 equal lessons, the student reaches the halfway point as follows:

  • If the student successfully completes the first 20 lessons before the calendar midpoint of the academic year, the second payment period does not begin until the calendar midpoint.

  • If the student completes the first half of the academic year before successfully completing the first 20 lessons, the second payment period does not begin until the student successfully completes the first 20 lessons.

Appendix C Pell Formula Summaries

Standard-term, credit-hour programs, with 30 weeks of instructional time (or waiver applies). For a program with a traditional academic calendar, the program:

  • must have an academic calendar that consists, in the fall through spring, of two semesters or trimesters, or three quarters (note that summer may not be a standard term);

  • must have at least 30 weeks of instructional time in fall through spring terms;

  • must not have overlapping terms; and

  • must define full-time enrollment for each term in the award year as at least 12 credit-hours and must measure progress in credit-hours.

Other programs offered in standard terms may use Formula 1 if they start the terms for different cohorts of students on a periodic basis (for example, monthly). These programs:

  • must have an academic calendar that consists exclusively of semesters, trimesters, or quarters;

  • must have at least 30 weeks of instructional time in any two semesters or trimesters or any three quarters;

  • must start the terms for different cohorts of students on a periodic basis (for example, monthly);

  • must not allow students to be enrolled in overlapping terms and the students must stay with the cohort in which they start unless they withdraw from a term (or skip a term) and re-enroll in a subsequent term.

  • must define full-time enrollment for each term in the award year as at least 12 credit-hours and must measure progress in credit-hours.

Step 1: Determine Enrollment Status

Full-time, three-quarter-time, half-time, or less-than-half-time

Step 2: Calculate Pell COA

Full-time, full academic year costs.

Step 3: Determine Annual Award

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 three-quarter-time, half-time, or less-than-half-time, the annual award is taken from the appropriate part-time payment schedule.

Step 4: Determine Payment Periods

Payment period is the academic term.

Step 5: Calculate Payment for a Payment Period

Annual Award ÷ 2 for programs with semesters or trimesters; 3 for programs with quarters

OR

For alternate calculation:

Annual Award ÷ Number of terms in the award year

Standard-term, credit-hour programs, with fewer than 30 weeks of instructional time, and waiver does not apply.

  • Enrollment for at least 12 credit-hours each term required for full-time status

  • Program terms don’t overlap

  • Academic calendar includes two semesters/trimesters (fall and spring) or three quarters (fall, winter, and spring)

  • Fall through spring terms are less than 30 weeks of instructional time

Step 1: Determine Enrollment Status

Full-time, three-quarter-time, half-time, or less-than-half-time

Step 2: Calculate Pell COA

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 non-prorated COA.

Step 3: Determine Annual Award

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 three-quarter-time, half-time, or less-than-half-time, the annual award is taken from the appropriate part-time payment schedule.

Step 4: Determine Payment Periods

Payment period is the academic term.

Step 5: Calculate Payment for a Payment Period

Annual award × (Weeks of instructional time in fall through spring terms ÷ Weeks of instructional time in program's academic year definition) ÷ 2(if semesters or trimesters) OR 3 (if quarters)

OR

For alternate calculation:

Annual Award ÷ Number of terms in the award year

Any term-based, credit-hour programs; may include those qualifying for Formulas 1 and 2.

Step 1: Determine Enrollment Status

Full-time, three-quarter time, half-time, or less-than-half-time.

Step 2: Calculate Pell COA

Full-time, full academic year costs.

Cost for program or period not equal to academic year prorated. Two fractions are 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 I.T. 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.

Step 3: Determine Annual Award

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 three-quarter-time, half-time, or less-than-half-time, the annual award is taken from the appropriate part-time payment schedule.

Step 4: Determine Payment Periods

Payment period is the academic term.

Step 5: Calculate Payment for a Payment Period

Weeks of instructional time in the term ÷ Weeks of instructional time in the program’s academic year definition

Note: A single disbursement can’t exceed 50% of the annual award.

Clock-hour programs and credit-hour programs without terms, residential portion of non-term correspondence programs.

Step 1: Determine Enrollment Status

At least half-time or less-than-half-time.

Step 2: Calculate Pell COA

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.

Step 3: Determine Annual Award

Always taken from full-time payment schedule (equal to Scheduled Award). Does not mean students are always considered full-time.

Step 4: Determine Payment Periods

Length of payment period measured in credit or clock-hours. Minimum of two equal payment periods required for programs shorter than an academic year, or two 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.

Step 5: Calculate Payment for a Payment Period

Annual award multiplied by the lesser of:

The number of credit or clock-hours in the payment period ÷ The number of credit or clock-hours in the program’s academic year

OR

The number of weeks of instructional time in the payment period ÷ The number of weeks of instructional time in the program’s academic year

Note: A single disbursement can’t exceed 50% of the annual award.

Correspondence programs non-term correspondence component. For residential portion, use Formula 4 to calculate payment periods and amounts. The schedule for the submission of lessons must reflect a workload of at least 12 hours of preparation per week of instructional time.

Step 1: Determine Enrollment Status

Enrollment status is never more than half-time.

Step 2: Calculate Pell COA

Full-time, full academic year costs (for applicable components).

Cost for program or enrollment period not equal to academic year prorated according to the following formula for tuition and fees:

Costs × (Credit-hours in program’s definition of academic year ÷ Credit-hours to which costs apply)

Step 3: Determine Annual Award

Annual award taken from half-time payment schedule

Step 4: Determine Payment Periods

Length of payment period measured in credit-hours.

The first payment period is the period of time in which the student completes the lesser of the first half of the academic year or the first half of the program. (First payment can be made only after the student has completed 25% of the lessons or otherwise completed 25% of the work scheduled, whichever comes last.)

The second payment period is the period of time in which the student completes the lesser of the second half of the academic year or the second half of the program. (Second payment may be made only after the student has submitted 75% of the lessons or otherwise completed 75% of the work scheduled, whichever comes last.)

Step 5: Calculate Payment for a Payment Period

Annual award is multiplied by the lesser of:

Number of credit-hours in the payment period ÷ Number of credit-hours in the program’s academic year

OR

Weeks of instructional time in the payment period ÷ Weeks of instructional time in the program’s academic year

Note: A single disbursement can’t exceed 50% of the annual award.

Programs of study by correspondence, term correspondence component. During each term, the written schedule for the submission of lessons must reflect a workload of at least 30 hours of preparation per semester hour or at least 20 hours of preparation per quarter-hour.

Step 1: Determine Enrollment Status

Enrollment status is never more than half-time.

Step 2: Calculate Pell COA

Full-time, full academic year costs (for applicable components).

Cost for program or enrollment period not equal to academic year prorated according to the following formula for tuition and fees:

Cost × (Credit-hours in program’s definition of academic year ÷ Credit-hours to which costs apply)

Step 3: Determine Annual Award

Annual award taken from half-time or less-than-half-time payment schedule.

Step 4: Determine Payment Periods

Length of payment period is the academic term.

Step 5: Calculate Payment for a Payment Period

Annual award multiplied by:

Weeks of instructional time in the term ÷ Weeks of instructional time in program’s academic year definition

When there is a residential portion in a term-based correspondence program, Formula 3 is used to calculate the student’s payment for a payment period for the residential portion.

Note: A single disbursement cannot exceed 50% of the annual award.

Published: 03/28/2021