Summary: Federal Pell Grant 2006-2007 Award Year Initial Authorization for Advanced Funded Schools

Publication Date: May 16, 2006

Author: G. Kay Jacks, General Manager, FSA Application, School Eligibility and Delivery Services

Summary: Federal Pell Grant 2006-2007 Award Year Initial Authorization for Advanced Funded Schools

Posted on 05-16-2006

The Departments of Labor, Health and Human Services, and Education, and Related Agencies Appropriations Act, 2006 (P.L. 109-149) provides the Department of Education (the Department) sufficient funding to cover a longstanding shortfall in the Federal Pell Grant (Pell Grant) Program. The Department has decided to use the shortfall appropriation to cover part of the Pell Grant Initial Authorization for the 2006-2007 Award Year, for schools that receive Pell Grant funds under the advanced funding method.

Because of the Federal financial and accounting requirements of the shortfall appropriation, the funding of the Initial Authorization, known in the Common Origination and Disbursement (COD) System as Current Funding Level (CFL), will be slightly different than it has been in the past. The funding will be done in two parts as follows:

• Shortly, we will generate an Electronic Statement of Account (ESOA) that lists the amount of a school's Initial CFL for the 2006-2007 Award Year and send it to the school's Student Aid Information Gateway (SAIG) mailbox (Message Class PGAS07OP). This amount will be slightly less than the school received for the 2005-2006 Award Year.
  
• Later this week, we will generate an increase and a second ESOA that will be nearly identical to the amount the school first received. We will send the second ESOA to the school's SAIG mailbox (Message ClassPGAS07OP). We will inform schools via the COD Processing Update when we are ready to send the second ESOAs to SAIG mailboxes.
  
• After both parts of this process have been completed, the sum of the first amount and the second amount should be more than a school's Initial CFL for the 2005-2006 Award Year.

An Advanced Funded school can view its Initial CFL on the Funding Information screen on the COD Web site (www.cod.ed.gov). This information will not be available for viewing on the Department's Grant Administration and Payment System (GAPS) Web site until Saturday, July 1, 2006. 2006-2007 Award Year funds will not be available for draw in the GAPS until July 1, 2006.

As an Advanced Funded school submits actual disbursements, the total accepted and posted amount for each disbursement is applied to the amount of the Initial CFL. Only after the Initial CFL amount has been reached will the school's CFL be increased to cover additional accepted and posted disbursements. A new ESOA is sent to the school each time its CFL amount changes.

Note: Schools participating in the Just in Time pilot and schools on Reimbursement, Heightened Cash Monitoring 1 (HCM1), or Heightened Cash Monitoring 2 (HCM2) will not receive an Initial CFL. These schools are eligible for a CFL once actual disbursements have been accepted and posted. A new ESOA is sent to a school each time its CFL amount changes.

At this time, we want to remind schools of the following disbursement-related information:

• The earliest date on which a school may disburse a Pell Grant for the 2006-2007 Award Year, either with Federal funds or its own funds, is July 1, 2006. July 1st also is the date on which 2006-2007 Pell Grant funds will be available for draw in the GAPS.
  
• A school may submit common records that contain anticipated disbursement information for 2006-2007 Pell Grant awards. The Disbursement Release Indicator (DRI) value in these records must be equal to "False" in order to be accepted by the COD System.
  
• The COD System will accept actual disbursements for 2006-2007 Pell Grant awards beginning June 21, 2006. As noted above, the disbursement date must be July 1, 2006 or later.
  
  o Prior to June 21st, the COD System will reject actual disbursements (DRI value equal to "True") and send Edit 996 (Invalid Value) to a school.
  
  o After June 21st, an Advanced Funded school may submit actual disbursements for 2006-2007 Pell Grant awards up to 30 days before the disbursement date. However, the disbursements will not be posted and funded in the GAPS until 7 days before the disbursement date.