1. Two Pells in One Award Year Fred Sellers Office of Postsecondary Education April 9, 2010

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

3. Legislation and Negotiated Rulemaking 3

4. Budget: Scheduled Award FY 2009 (2009-2010) –Maximum Scheduled Award: $5,350 FY 2010 (2010-2011) –Maximum Scheduled Award: $5,550 –SAFRA: change in minimum award calculation 4

5. Legislation 5 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

6. 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

7. Negotiated rulemaking No consensus Notice of proposed rulemaking: August 21, 2009 Final regulations: October 29, 2009 Effective starting in 2010-11 Early implementation 7

8. Basics on Crossover Payment Periods 8

9. 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

10. 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

11. 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

12. 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

13. 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

14. 2009-2010 Award Year 14

15. 2009-2010 Implementation No regulations for 2009-2010 Legally supportable ways to implement in ED: staff conference presentations, FSA Handbook, and new final regulations 15

16. 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 16

17. 2009-2010 Payments School determines payment for each payment period Calculation is based on Scheduled Award for the award year –Pell Grant formulas have not changed –Each calculation is done using same amount for Scheduled Award 17

18. 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 2 nd award while paying balance of 1 st award if at least half-time student 18

19. Credit-hour example $5,000 Scheduled Award for 2009-10 Summer 09 and Fall –Paid on ¾ time and full-time enrollment –Earns only 6 semester hours each term Spring, receives payment from first and second Scheduled Awards –$ 625 1 st award –$1,875 2 nd award 19 Summer 2009 ¾ time (6 hr) $1,875 Fall 2009 Full-time (6 hr) $2,500 2009-10 Award Year Summer 2010 Full-time (12 hr) $2,500 Spring 2010 Full-time (12 hr) $2,500 operationally transparent

20. Clock-hour example $5,000 Scheduled Award for 2009-10 1,800 clock-hour program with all payment periods in the 2009-2010 award year 20 1 st P.P. 450 cl hr/13 wk it $2500 2 nd P.P. 450 cl hr/13 wk it $2500 2009-10 Award Year 4 th P.P. 450 cl hr/13 wk it $2500 3 rd P.P. 450 cl hr/13 wk it $2500

21. 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, is no POP MRR but concurrent enrollment MRR is still triggered if enrollment dates were within 30 days 21

22. AEI: COD screen Additional Eligibility Indicator Checkbox

23. Reminders for 2009-2010 Must pay eligible students, including less-than-half- time for first Scheduled Award Never had concept of headers and trailers; can choose award year to pay a crossover payment Cannot ignore payment periods, for example, crossovers or intersessions: –Must pay eligible students in any payment period in an award year Must implement “two Pells” regardless of software capabilities, even if requires manual interventions for crossover or other payment periods 23

24. 2010-2011 Award Year 24

25. 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 §§690.63, 690.64, 690.67 25

26. 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 the American Recovery and Reinvestment Act of 2009 26

27. Basics: Eligible student Is enrolled in credit or clock hours attributable to a student’s second academic year in the award year 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 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 27

28. Basics: Payment calculations Use same amount for both Scheduled Awards in the award year Calculate payment for each payment period Have been no changes to the formulas to calculate payments 28

29. Basics: Disbursements Disburse to eligible students until reach 200 percent of the student’s Scheduled Award for the award year Can 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) 29

30. 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 30

31. 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 record 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 31

32. 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 remains the first award year payment since payment from second award year would be based on half-time, i.e., $1,250 (lump sum payment rule, §690.76(b)) 32

33. 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) 33

34. Credit-hour example $4,000 Scheduled Award for 2010-11 Fall, completes the hours of the first academic year Spring, receives payment from second Scheduled Award 34 Summer 2010 Full-time (12 hr) $2,000 Fall 2010 Full-time (12 hr) $2,000 2010-11 Award Year Spring 2011 Full-time (12 hr) $2,000

35. Credit-hour example $5,000 Scheduled Award for 2011-12 Summer 2011 reassigned Fall, completes the hours of the first academic year Spring, receives payment from first and second Scheduled Awards –$ 625 1 st award –$1,875 2 nd award 35 Summer 2011 ¾ time (9 hr) $1,875 Fall 2011 Full-time (15 hr) $2,500 2011-12 Award Year Summer 2012 Full-time (12 hr) $2,500 Spring 2012 Full-time (15 hr) $2,500 operationally transparent

36. Credit-hour example $4,000 Scheduled Award for 2012-13 Spring, does not complete first academic year Summer, eligible with 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 36 Fall 2012 ¾ time (9 hr) $1,500 Spring 2013 Full-time (12 hr) $2,000 2012-13 Award Year Summer 2013 Full-time (12 hr) $2,000

37. Clock-hour example $4,000 Scheduled Award for 2010-11 1,800 clock-hour program over 52 weeks of instructional time 3 rd payment period, a crossover payment period 37 1 st P.P. 450 cl hr/13 wk it $2000 2 nd P.P. 450 cl hr/13 wk it $2000 2010-11 Award Year 3 rd P.P. 450 cl hr/13 wk it $2000

38. Clock-hour example $5,000 Scheduled Award for 2011-12 Reassignment of 3 rd payment period since student is now eligible for a $2,500 payment 38 3 rd P.P. 450 cl hr/13 wk it $2500 4th P.P. 450 cl hr/13 wk it $2500 2011-12 Award Year

39. Summer 2010 39

40. 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. 40

41. 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 41

42. 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 42

43. Crossover payment period assignment for 2010 EXAMPLES Prior to July 1, 2010, an institution determines that 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 43

44. Crossover payment period assignment for 2010 EXAMPLES Prior to July 1, 2010, makes NO determination of policy to apply-- –Must apply new regulations to all summer disbursements, whether for 9-10 or 10-11 (does not affect 9-10 payment periods prior to summer 2010) 44

45. Additional Provisions Starting in 2010-2011 45

46. Transfer student Final regulations: two options –Assumption method Based on disbursements received –Hours-earned method Based on actual hours earned Method at option of institution: apply on a student-by-student basis or to all students §690.67(b) 46

47. Transfer student: Assumption method Assume completed first academic year if received all of first Scheduled Award at prior institution If less than first Scheduled Award, calculate hours considered to have completed: 47 Amount disbursed at prior institution X Hours in current institution’s academic year Amount of Scheduled Award at prior institution = Hours considered completed

48. Transfer student: Assumption method EXAMPLE – credit hour Fall transfer student received $2,000 of $4,000 Scheduled Award for summer at prior institution. Current institution, without a summer term, defines academic year, in part, as 24 semester hours. Hours in award year considered to have earned for prior attendance: 48 $2,000 disbursed at prior institution X 24 hours in current institution’s academic year $4,000 Scheduled Award at prior institution = 12 hours considered completed

49. Transfer student: Assumption method EXAMPLE – clock hour Transfer student received $3,000 of $4,000 Scheduled Award at prior institution. Current institution defines academic year, in part, as 900 clock hours. Hours in award year considered to have earned for prior attendance: 49 $3,000 disbursed at prior institution X 900 clock hours in current institution’s academic year $4,000 Scheduled Award at prior institution = 675 clock hours considered completed

50. Transfer student: Assumption method Round down any fractions of a credit or clock hour Except if courses are offered in fractions of credits, may retain fractions Example –Using the assumption method, a transfer student is considered to have earned 12.7 credits in the award year at a prior institution. –If the student’s program is offered in courses of 2.5 credit hours, the institution may consider the student to have 12.7 credits or 12 credits. –If the program were offered in 3-hour courses, the student would have 12 credits. 50

51. Transfer student: Hours-earned method The institution may determine the credit or clock hours actually earned at other institutions. The institution must have information that— –Includes the time periods when the credit or clock hours were earned, and –Does not include nonapplicable credit or clock hours. Any hours earned are applicable. For example, hours— –Need not be earned in an eligible program, or –Be accepted on transfer. 51

52. Transfer student: Hours-earned method An institution must attribute to the current award year any credit or clock hours earned at other institutions that were earned in a summer crossover payment period. This requirement applies even though the institution does not have a summer payment period. 52

53. Transfer student: Hours-earned method EXAMPLE – credit hour Current institution defines academic year, in part, as 24 semester hours. Student’s transcript shows earned 6 hours in the summer term and 12 hours in the fall semester. Transfer student received $2,000 of $4,000 Scheduled Award at prior institution for the fall term and no payment for summer from the current award year. At the current institution, the student is considered to have earned 18 semester hours in the award year: 6 from summer and 12 from fall. 53

54. Transfer student: Hours-earned method EXAMPLE – clock hour Current institution defines academic year, in part, as 900 clock hours. Student’s transcript shows earned 600 clock hours in the period from June 15 to September 30. Transfer student received $3,000 of $4,000 Scheduled Award at prior institution for the fall term and no payment for summer from the current award year. At the current institution, the student is considered to have earned 600 clock hours in the award year since the institution confirmed that the first payment period was a crossover payment period. 54

55. Transfer student No requirement to apply additional information to disbursements for prior payment period in award year For example— –Assumption method: a payment is reported late to NSLDS. –Hours-earned method: a transcript is received indicating student earned additional hours in the award year at another institution. In clock-hour programs, a payment consisting of funds from a first and second Scheduled Award, only for a transfer student 55

56. Nonapplicable hours In determining eligibility for a second Scheduled Award in an award year, may not use hours based on: – Advanced Placement (AP) programs –International Baccalaureate (IB) programs –Testing out, life experience, or similar competency measures Are not earned by attendance in the award year §690.67(d) 56

57. Nonapplicable hours The equivalencies of reduced credit and noncredit remedial coursework do count toward determining eligibility for a second Scheduled Award in an award year. Any equivalent hours in excess of the 30 semester hours, 45 quarter credits, or 900 clock hours do not count unless they are equivalent hours of ESL coursework. In other words, reduced credit and noncredit remedial coursework does not count if the equivalent hours do not count toward determining Title IV eligibility. 57

58. Special circumstances May waive requirement to be enrolling in hours attributable to the second academic year in the award year to pay from second Scheduled Award Must be due to circumstances beyond the student’s control Must be determined and documented on individual basis §690.67(c) 58

59. Special circumstances May include circumstances such as illness or classes not offered Does not include withdrawing to avoid a grade or failing to register for offered class 59

60. Reminders for 2010-11 and subsequent years Must pay eligible students, including less-than-half- time for first Scheduled Award No concept of headers and trailers Cannot ignore payment periods, for example, crossovers or intersessions: –Must pay eligible students in any payment period in an award year Must implement “two Pells” regardless of software capabilities, even if requires manual interventions for crossover or other payment periods 60

61. Contact Information 61 Phone: 202 502-7502 Email: fred.sellers@ed.govfred.sellers@ed.gov Fax: 202 502-7874