Did You Know?  ED is sending out more money. That is, the Department of Education is sending out additional disbursements of Pell Grant Administrative Cost Allowances (ACA).

ED began sending subsequent disbursements of the ACA for the 2011-12 and 2012-2013 award years on August 26, 2013.  These disbursements are the third and final ACA disbursement for 2011-2012 and the second ACA disbursement for the 2012-2013 award year.  The amount of the total ACA disbursements for an award year is based upon the number of unduplicated Federal Pell Grant recipients an institution paid during the applicable award year.  The amount authorized by Federal regulation for the Federal Pell Grant ACA is $5.00 per unduplicated Pell Grant recipient in an award year.  Thus, an institution may determine how much total ACA it should receive in an award year by multiplying the total number of Pell Grant recipients by $5.00.  The amount of $5 per Pell Grant recipient that is paid to the school is to be used to offset the costs of administering the Title IV programs.  Specifically, the costs that may be offset are those associated with administering the Federal Pell Grant or Campus-Based programs (i.e., Federal Supplemental Education Opportunity Grant, Federal Work-Study, and Federal Perkins Loans).  Note that the Pell Grant ACA is not authorized to offset the costs associated with the Federal Direct Loan programs.

It is important for schools to realize that the total ACA a school may receive is released in a total of up to three disbursements that occur later in the processing year, and even after the award year for which the ACA is being paid.  Typically, the first ACA for an award year is disbursed to institutions in March of the award year.  For example, the first ACA disbursement for 2013-2014 will be scheduled to occur in March, 2014.  The second disbursement is released in August following the end of the award year.  Thus, for 2013-2014 the second disbursement of Pell Grant ACA will occur in August, 2014.  The third and final ACA payment is released in the August following the second disbursement.  Therefore, for 2013-2014 the third and final ACA disbursement will occur in August, 2015.  The third payment is predicated upon whether there were any Pell Grant recipients for whom the school had not already received payment for the ACA in one of the two prior ACA payments for the award year.

Notification via ESOA:

Schools are notified of the payment amounts via a specific Electronic Statement of Account (ESOA) that is sent to the school’s Student Aid Internet Gateway (SAIG) mailbox.  The notification is identified by the message class PGASXXOP, where the “XX” in this example message class identifier represents the award year.  For example, PGAS12OP identifies the 2011-2012 award year and PGAS13OP is the 2012-2013 award year message.

Timeframe to Receive ACA Disbursements:

ED states that schools should be seeing the payments arrive for the most recent round of ACA disbursements within several weeks of the August 26, 2013 date.  ED utilizes the G5 system to make the ACA disbursements.  The payments will be direct deposited into the school’s bank account that the school has identified for this purpose.  The ACA is not an amount that affects the school’s Current Funding Level (CFL).  However, a school’s Financial Aid Office should ensure their Business Office gets a copy of the notice about the ACA payments to be able to appropriately account for the funds received.

Should FAME clients have any questions about the ACA disbursements, please contact your FAME Customer Service Representative via support.fameinc.com.

 

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