Going ‘Round, and ‘Round
(or, the Latest Rendition of “Year-Round” Pell)
Those who have been around postsecondary education for the last eight years or so, likely recall the quickly implemented “year-round” provision of the Federal Pell Grant (Pell Grant) program in 2009-2010. That was the “first” edition. The original “year-round Pell” was created by the Higher Education Opportunity Act (HEOA) of 2008. It authorized schools to disburse up to two Pell Grants in a single award year to eligible Pell Grant students. The first edition of year-round Pell provided for implementation beginning in 2009-2010. Although it was short-lived due to the provision of law being repealed on April 15, 2011, it gave students (and schools!) a taste of what could be. As a result of whetting the appetite of students and schools, the topic remained alive, although not on the front burner of reality—until now!
Now, the “year-round” Pell Grant is back! Thanks to the Department of Education Appropriations Act, 2017 (Title III of Division H of P.L. 115-31, the Consolidated Appropriations Act, 2017), signed into law on May 5, 2017, the new, improved version of “year-round” Pell is here!
Under this new edition, eligible students are allowed the opportunity to use Pell Grant funding, more or less, “year-round.” The latest measure authorizes Pell Grant eligibility beyond the annual Pell Grant Scheduled Award. The law allows for an eligible student to receive up to 150% of the student’s annual Pell Grant Scheduled Award in an award year. This, naturally, would enable most students to be able to utilize a full payment period disbursement amount for up to three payment periods in an award year, assuming full-time enrollment status. The effective date of the new authorization is beginning with the 2017-2018 award year.
Additional Pell Grant Conditions and Requirements
There are, as may be expected, certain conditions which must be met in order for a student to receive the additional Pell eligibility in an award year.
- An otherwise Pell-eligible student must be enrolled as at least a half-time student in the payment period in which the student receives the payment that would be in excess of 100% of his or her Pell Grant Scheduled Award.
- Institutions must pay students who are eligible for the additional Pell Grant funds, the amount for which they are eligible, up to 150% of the annual Pell Grant Scheduled Award for the award year.
- The additional Pell Grant award amount may not exceed 50% of a student’s annual Scheduled Pell Grant Award.
- The additional amount of Pell Grant received as part of the year-round Pell payments (i.e., amount paid in excess of the annual Scheduled Award) is counted in determining the student’s Lifetime Eligibility Used (LEU).
- Schools have flexibility to assign a “crossover” payment period—a payment period that includes both June 30 and July 1, overlapping two award years—to either of the applicable award years.
a. Due to the effective date of the law beginning with 2017-2018, schools that consider the summer 2017 crossover period as a trailer to the 2016-2017 award year may not receive more than 100% of his or her Scheduled Award for 2016-2017. However, a student enrolled on at least a half-time basis in the summer of 2017 who has used all of his or her eligibility for 2016-2017, and has submitted a valid Student Aid Report (SAR) or Institutional Student Information Record (ISIR) for 2017-2018, should “receive a Pell Grant award for summer 2017 based on the student’s 2017–2018 Pell eligibility because the student will have additional eligibility later in the 2017–2018 award year.”
b. When working with crossover payment periods, schools are required by the wording of the law, “as it determines is most beneficial to students,” to make decisions based upon what is in the best interest of the student and maximizes the student’s eligibility over the two award years
- Transfer students from one institution or program to another institution or program, who are otherwise eligible and have remaining Pell eligibility up to 150% of the student’s Pell Grant Scheduled Award for the new program or institution, will be eligible to receive additional Pell Grant funds if enrolled at least half-time in the payment period for which they will receive the additional funds.
- An institution may make a payment to a student in a payment period that includes a portion of the student’s original Pell Grant Scheduled Award for the award year and from the additional Pell Grant eligibility allowed under this new law. See the chart below for an example ED provided.
- Institutions are not required to separately track the percentage used from the initial Pell Grant Scheduled Award and from the additional Pell Grant award. A school may combine the amounts when tracking, if desired. The initial Scheduled Award amounts and additional Pell award amounts must be submitted as one amount when reporting to the Common Origination and Disbursement System (COD).
Operational Considerations of the New “Year-Round” Pell
Although the new law provides for additional opportunities for students and institutions, there are practical considerations that must be addressed. Here are a few things to think about:
- How will you inform your students of this expanded eligibility for Pell Grant?
- Who will have responsibility for disseminating this new information and ensuring a clear communication of it to students?
- What methods will you utilize to inform students?
- When will you begin your method(s) of informing students?
- Why will you want to inform students of this additional Pell eligibility? That is, what do you hope to accomplish by informing them?
- Will you need to inform other departments, (business office, fiscal office, student services, etc.)? Will you have a formal meeting of all impacted to discuss implications in various areas? Or, will it be a low-key approach by e-mail?
- Will your institution engage your academic advisors to use this new tool to assist advising students in their progress in their program so they more rapidly persist to graduation?
- Will you incorporate this new eligibility into your financial literacy and loan counseling initiatives to encourage students to more seriously consider the need to borrow as much in student loans?
- When and how will you update your written awarding policies?
- When and how will you update your student consumerism information regarding Pell Grant eligibility?
These are only a few of many possible things to contemplate and plan for in implementing this new opportunity for students. (NOTE for FAME product users: You can expect to see changes implemented in a future release of our financial aid servicing products related to the new “year-round” Pell Grant.)
As can be seen, this new version of “year-round” Pell, can offer a substantial benefit to students by assisting them progress through their academic program more quickly and, potentially, with less need to borrow when going to school “year round.” Let’s hope that this reworked edition of “year-round” Pell helps students in need fulfill their academic pursuits. And, that it lasts longer than the original version!
This material is presented for informational and educational purposes only and should not be considered to be giving legal advice.