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Two Pells in One Award Year

NYSFAAA State-wide Training June 3, 2010. Two Pells in One Award Year. Fred Sellers Office of Postsecondary Education. Corrected June 4, 2010. Agenda. Legislation and negotiated rulemaking Basics on crossover payment periods Pell constants 2009-2010 award year

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Two Pells in One Award Year

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  1. NYSFAAA State-wide Training June 3, 2010 Two Pells in One Award Year Fred Sellers Office of Postsecondary Education Corrected June 4, 2010

  2. Agenda • Legislation and negotiated rulemaking • Basics on crossover payment periods • Pell constants • 2009-2010 award year • 2010-2011 and subsequent award years • Summer 2010 • Additional provisions starting in 2010-2011 • Pell myths and Two Pells myths

  3. LegislationandNegotiated Rulemaking

  4. Legislation • Higher Education Opportunity Act of 2008 Pub. L. 110-315 (effective 2009-2010) • Eligibility for a second Scheduled Award in an award year • Must be in a program leading to associate degree, baccalaureate degree, or certificate • Must be attending at least half-time in order to receive any of second Scheduled Award

  5. Negotiated rulemaking • Team V-General and Nonloan Programmatic Issues met in March 2009, April 2009, and May 2009. • Negotiations included two Pells in one award year

  6. Negotiated rulemaking • No consensus • Notice of proposed rulemaking: August 21, 2009 • Final regulations: October 29, 2009 • Effective starting in 2010-11 • Early implementation

  7. Basics on Crossover Payment Periods

  8. Crossover payment period • Is a payment period that includes June 30 and July 1, i.e., a payment period that occurs in two award years • May be a term or a nonterm payment period • Must be assigned to one award year • Must have valid SAR/ISIR for assigned year • May assign two consecutive crossover payment periods to the same award year • Through 2009-2010 award year, have always been able to assign to either award year

  9. Crossover payment period Example • A program has a semester calendar with two summer sessions (6/1 – 7/14 and 7/20 – 8/28). • If combined in one term, the combined term is a crossover payment period regardless of what classes students attend. • If the two sessions are considered separate terms, only the 6/1 – 7/14 term is a crossover payment period. • Note: if the two sessions are separate terms • Full-time must be 12 hours for each session to use Pell Formula 1 • Without a single summer term, the program may no longer qualify to use an SAY for Stafford/PLUS loans.

  10. Crossover payment period and packaging • Raises packaging issues • Must use same EFC, COA, and need for all programs except Pell • Treat Pell as estimated financial assistance (EFA) for other Title IV • For Pell, use EFC for the award year from which the student will be paid

  11. Crossover payment period and packaging EXAMPLE • Summer term normally assigned as last payment period of award year. • Institution decides to pay 2010 summer Pell from 2010-11 ISIR. • Use 2010-11 ISIR/EFC for Pell • Use 2009-10 ISIR/EFC for packaging all other aid • Amount of Pell received is applied as EFA to determine need for other Title IV.

  12. Crossover payment period • These requirements are not new. • The new “two Pell” requirements are in addition to these requirements. • For example, if you have no summer crossover payment period, the “two Pell” requirements still apply to the rest of an award year.

  13. Pell Constants

  14. Pell Constants Unchanged by Two Pells • Scheduled Award is the amount that a full-time student would receive for a full academic year based on the student’s EFC and COA. • Scheduled Award is prorated by payment period based on hours and weeks of instructional time attended. • Payment for a payment period calculations are unchanged.

  15. Pell Constants Changed by Two Pells and no longer true • Student may receive only one Scheduled Award in an award year. • Student is always eligible for payment as less-than-half-time student. • Institution may assign a crossover payment period to either award year as a general policy or on a case-by-case basis.

  16. 2009-2010Award Year

  17. 2009-2010 Implementation • No regulations for 2009-2010 • Legally supportable ways to implement: ED staff conference presentations, FSA Handbook, and new final regulations

  18. 2009-2010 Implementation • Term-based program: no requirement that a student must− • Complete the hours of the first academic year to be eligible, or • Be taking hours attributable to the second academic year to be eligible • Clock-hour or nonterm credit-hour program: a payment period requirement that student must complete the hours of an academic year to move to eligibility for a second Scheduled Award due to payment period definition

  19. 2009-2010 Payments • Institution determines payment for each payment period • Calculation must be based on Scheduled Award for the award year • Pell Grant formulas have not changed • Each calculation is done using same amount for Scheduled Award

  20. 2009-2010 Payments • Must pay an eligible student until reach 200 percent of his or her Scheduled Award for the award year • Can begin paying from 2nd award while paying balance of 1st award if at least half-time student • Must be enrolled in an eligible program, i.e., a program greater than one academic year in length to be an eligible program for a second Scheduled Award

  21. 2010-2011 and Subsequent Award Years

  22. Two Pells: Final regulations • Must be used starting in the 2010-2011 award year • May apply in some instances to summer crossover payment period considered to be in 2009-2010 award year §§690.67, 690.64, 690.63

  23. Policy goals • Accelerating completion • Maximizing the benefit of a second Scheduled Award • Must attend full-time, or almost full-time, to receive significant benefit • Applying student achievement and accountability principles for use of funds under • ARRA (American Recovery and Reinvestment Act of 2009) • SAFRA (Student Aid and Fiscal Responsibility Act)

  24. Basics: Eligible student • Is enrolled in credit or clock hours attributable to a student’s second academic year in the award year • Has successfully completed sufficient hours in the award year that some hours in payment period are attributable to the second academic year in that award year • Is a major change from proposed regulations §690.67(a)

  25. Semester progression example Conditions • A traditional semester-based academic calendar has fall and spring semesters and a 12-semester-hour nonstandard summer term. • Title IV academic year is 24 semester hours and 30 weeks of instructional time. • In 2010-2011 award year, student • Is paid as full-time for fall and spring, • Earns 12 hours in the fall and 9 hours in the spring, and • Enrolls for 6 hours in the summer.

  26. Semester progression example Fall 2010Earns 12 hr Spring 2010 Earns 9 hr Summer 2011 Enrolls 6 hr • Only consider hours in current award year • Do not consider prior award year hours or weeks of instructional time • Through spring earns 21 hours, after institution determines grades for spring • Consider 3 hours of summer to be attributable to second academic year • Eligible for half-time payment from second Scheduled Award 2010-11 Award Year

  27. Clock-hour progression example Conditions • Academic calendar is 1800 graded clock-hours over 52 weeks of instructional time in the 2010-2011 award year. • Program has 4 payment periods of 450 clock hours and 13 weeks of instructional time. • Title IV academic year is 900 clock hours and 26 weeks of instructional time. • In 2010-2011 award year, student • Is paid first Scheduled Award over the first two payment periods, and • Enrolls in the third payment period after passing first 900 clock hours.

  28. Clock-hour progression example 1st P.P. 450 cl hr 2nd P.P. 450 cl hr 3rd P.P. 450 cl hr 4th P.P. 450 cl hr • Only consider hours in current award year • Do not consider prior award year hours or weeks of instructional time • Through second payment period earns 900 clock hours • Consider hours of 3rd and 4th payment periods attributable to the second academic year • Is eligible for payment from second Scheduled Award for 3rd and 4th payment periods 2010-11 Award Year

  29. Basics: Eligible student • Is enrolled in an eligible program leading to a bachelor’s or associate degree or other recognized educational credential • The program must be greater than one academic year in length—in both hours and weeks of instructional time—to be an eligible program for a second Scheduled Award. • An exception to the degree or certificate is provided for students with intellectual disabilities. • Is enrolled at least as a half-time student §690.67(a) Subpart O of part 668

  30. Basics: Payment calculations • Use same amount for both Scheduled Awards in the award year • Award consecutively • Calculate payment for each payment period • Have been no changes to the formulas to calculate payments

  31. Basics: Disbursements • Disburse to eligible students until reach 200 percent of the student’s Scheduled Award for the award year • Begin disbursing from second Scheduled Award in a payment period while paying the balance of first award if student qualifies for second award §690.63(h)

  32. Crossover payment period assignment • Must assign the payment period to the award year in which the student receives the greater payment • If assigned to first award year, must pay with first award year funds • If assigned to second award year must pay with second award year funds §690.64

  33. Crossover payment period assignment • Must determine the greater payment based on all requirements that apply • Must not rely on EFC or Scheduled Award alone • If only have valid SAR/ISIR for one award year, must rely on that record • For example, that award year payment is higher if, for the other award year-- • No SAR/ISIR • Rejected SAR/ISIR without an EFC • Incomplete verification • May still need to pay on other year if receive a valid SAR/ISIR

  34. Crossover payment period assignment • A student is not eligible for second Scheduled Award in the first award year of a crossover payment, regardless of which award year is higher, if the student is not enrolled-- • At least half-time, or • In hours attributable to the second academic year of the first award year.

  35. Crossover payment period assignment EXAMPLE • $4,000 Scheduled Award for first award year and $5,000 Scheduled Award for second award year • Receipt of ISIR with a higher Scheduled Award for second award year after summer term is completed • Payment as full-time from first award year ($2,000) although student only completed the term as half-time • Higher payment in the first award year since payment from second award year would be based on half-time, i.e., $1,250 (lump sum payment rule, §690.76(b))

  36. Crossover payment period assignment • Must reassign if receive information that student would receive greater payment • within deadline date for the first award year (2010 crossover payment period, September 10, 2010) • May reassign if information received after initial deadline • but not later than the deadline date for administrative relief for the first award year (2010 crossover payment period, February 1, 2011)

  37. Term example Points illustrated • Academic year progression within each award year to establish eligibility for second Scheduled Award • Assignment of crossover payment period based on higher payment • Assignment of two crossover payment periods to the same award year • Payment from a second Scheduled Award not limited to crossover payment periods • Payment for a payment period from two Scheduled Awards

  38. Term example Conditions • Academic calendar: traditional semester-based with fall and spring semesters and a 12-semester-hour nonstandard summer term. • Title IV academic year: 24 semester hours and 30 weeks of instructional time. • Formula 1 payment calculations

  39. Term example Summer 2010Full-time (12 hr) $2,000 Fall 2010 Full-time (12 hr)$2,000 Spring 2011 Full-time (12 hr)$2,000 • $4,000 Scheduled Award for 2010-11 • Fall, completes the hours of the first academic year • Spring, receives payment from second Scheduled Award after institution determines student earns hours for fall 2010-11 Award Year

  40. Term example Summer 2011 ¾ time (9 hr)$1,875 Fall 2011 Full-time (15 hr)$2,500 Spring 2012 Full-time (15 hr)$2,500 Summer 2012 Full-time (12 hr)$2,500 • $5,000 Scheduled Award for 2011-12 • Summer 2011 reassigned • Fall, completes the hours of the first academic year • Spring, receives payment from first and second Scheduled Awards • $ 625 1st award • $1,875 2nd award 2011-12 Award Year operationally transparent

  41. Term example Fall 2012¾ time (9 hr) $1,500 Spring 2013 Full-time (12 hr)$2,000 Summer 2013 Full-time (12 hr)$2,000 • $4,000 Scheduled Award for 2012-13 • Spring, does not complete first academic year • Summer with 9 hours attributable to second academic year • For summer payment of $500 from balance of first award and $1,500 from second award • May need to assign summer to 2013-2014 if a higher payment 2012-13 Award Year

  42. Clock-hour example 1st P.P. 450cl hr/13 wk it$2,000 2nd P.P. 450 cl hr/13 wk it $2,000 3rd P.P. 450 cl hr/13 wk it $2,000 • $4,000 Scheduled Award for 2010-2011 • 1,800 clock-hour program over 52 weeks of instructional time • $2,000 disbursement from second Scheduled Award in 3rd payment period • 3rd payment period of program, a crossover payment period 2010-11 Award Year

  43. Clock-hour example 3rd P.P. 450 cl hr/13 wk it $2,500 4th P.P. 450 cl hr/13 wk it $2,500 • $5,000 Scheduled Award for 2011-2012 • Reassignment of 3rd payment period • Report $4,000 disbursed for 2010-2011 to COD (a $2,000 reduction) • Report $2,500 disbursement in 3rd payment period for 2011-2012 2011-12 Award Year

  44. Two Pells: COD • Added new field in COD Common Record • Additional Eligibility Indicator (AEI) • Set AEI to “true” when awarding funds from the student’s second Scheduled Award • Track the 200 percent limit in COD • With AEI set to “true,” is no POP MRR, but concurrent enrollment MRR can still be triggered if enrollment dates were within 30 days

  45. AEI: COD screen Additional Eligibility Indicator Checkbox

  46. Summer 2010

  47. Crossover payment period assignment for 2010 • Effective date of final regulations affects 2010 crossover period. • Institution may designate based on options applied to all students or on student-by-student basis.

  48. Crossover payment period assignment for 2010 • Institution may designate-- • Prior to July 1, 2010, a student’s payment period as being in the 2009-10 and not apply these regulations; • A student’s payment period as being in the 2009-10 award year with regulations being applicable; or • A student’s payment period as being in 2010-2011, in which case the regulations must apply. • Before July 1, 2010, establish written policy

  49. Crossover payment period assignment for 2010 EXAMPLES • Prior to July 1, 2010, institution determines it will-- • Treat 2010 summer payment periods as being in 09-10 and not apply these regulations. • Prior to July 1, 2010, institution determines it will-- • Treat 2010 summer payment periods as being in 09-10 and not apply these regulations, but • Assign student’s payment period to 2010-2011 if the student would receive a larger payment.

  50. Crossover payment period assignment for 2010 EXAMPLES • Prior to July 1, 2010, an institution determines it will-- • Treat 2010 summer payment periods as being in the 2010-2011 award year. • Prior to July 1, 2010, an institution determines it will-- • Make 2010 summer payment period assignments on a case-by-case basis.

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