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Federal Pell Grant Program - Introduction

AwardYear: 1997-1998
EnterChapterNo: 4
EnterChapterTitle: Federal Pell Grant Program
SectionTitle: Introduction
PageNumbers: 1-2

This chapter of The Federal Student Financial Aid Handbook
describes how a school calculates and pays Federal Pell Grant (Pell)
awards to eligible students and how it reports those payments to the
U.S. Department of Education (the Department).

The discussion covers what the school must do to process an eligible
student's Pell award after the school has received documentation of
the student's eligibility. This chapter covers the basic steps in the Pell
award process at the school: confirming student eligibility,
calculating the award, making a disbursement, recalculating the
award, collecting overpayments, and reporting expenditures to the


Some changes affecting the Federal Pell Grant Program are

- The maximum Pell has been increased to $2,700. Note that
students at schools with tuition charges of less than $150 may
have a reduced maximum award, as explained in "Dear Colleague"
Letter POL-97-1 (see Appendix E). Schools may need to use
Alternate Payment and Disbursement Schedules in such cases. The
Alternate Disbursement Schedule for half-time students included
in "Dear Colleague" Letter POL-97-1 had an error in two cells; a
corrected version is included in Appendix E.

- Schools may keep documents such as a signed FAFSA (for a
student applying electronically) or the SAR in formats other than
the original hard copy (see page 4-7, and Chapter 3, Section 7.)

- The cash management regulations published on 11/29/96 provide
a common definition of payment period for all the programs,
which replaces the definition in the Pell regulations. There are
minor changes from the previous payment period definition (see
Section 2 of this chapter). Schools can use the old payment period
definition for certain crossover payment periods in 1997 (see
page 4-25).

- A school cannot allow excused absences of more than 10% of the
clock hours in a payment period (see page 4-28).

- The cash management regulations published on 11/29/96 provide
a common procedure for disbursements after the student's
enrollment has ended (see page 4-61).

- The Department expects to replace the ED Payment Management
System (ED/PMS) with Education's Central Automated Processing
System (EDCAPS) during the 1997-98 award year. Schools will
receive more information on the new system as it is implemented.

- The Department has provided revised guidance on schools'
policies for recalculating awards when a student's enrollment
status changes during a payment period (see page 4-67).

Last Modified: 02/26/1998