Posted Date: August 13, 2012

Author:  David A. Bergeron, Acting Assistant Secretary for Postsecondary Education

Subject: Pell Grant Lifetime Eligibility Used: Importance of Timely Reporting

In Dear Colleague Letter GEN-12-01 issued on January 18, 2012, we informed you of changes made to the Title IV student aid programs by the Consolidated Appropriations Act of 2012 (Public Law 112-74).  Among other changes, Public Law 112-74 included a provision that limits a student’s eligibility for Federal Pell Grant funds to a maximum of 12 semesters (or its equivalent) effective with the 2012-2013 Award Year.  This electronic announcement reminds institutions of the importance of timely reporting of Pell Grant disbursements (and adjustments) to mitigate the possibility of Pell Grant overpayments, particularly when students transfer from one institution to another.

Submission of Pell Grant Disbursement Information – Under the Federal Pell Grant Program regulations at 34 CFR 690.83, institutions must, by the reporting deadlines the Department publishes in the Federal Register, submit Pell Grant disbursement information to the Department’s Common Origination and Disbursement (COD) System after the institution makes a Pell Grant disbursement or becomes aware of the need to make an adjustment to previously reported Pell Grant disbursement data.  On June 29, 2012, we published a Federal Register notice that provides, in general, that an institution is required to submit Pell Grant disbursement information to COD no later than 30 calendar days after the institution makes a disbursement or adjustment. Under the regulations, failure by an institution to meet these reporting requirements could result in the Department disallowing the disbursement.

While it has always been important for institutions to comply with the Pell Grant disbursement reporting requirements, the possibility that a student may exceed the new limitation on Pell Grant eligibility makes it even more critical that reporting be done timely.  To ensure that your institution and your colleagues at other institutions have the most accurate information about each Pell Grant recipient’s Lifetime Eligibility Used (Pell LEU), we urge you to report Pell Grant disbursement (and adjustment) information to COD as early as possible in the required 30 day timeframe. Doing so will allow our systems to provide other institutions with more timely LEU data and prevent the possibility of an overaward.

Example--The following example demonstrates why we strongly urge schools to report Pell Grant disbursement (and adjustment) information to COD much sooner than at the end of the required 30 day timeframe:

Assume that a student attends School A only for the Spring 2012 semester and, as of the end of the Spring 2012 term, has a Pell LEU of 550%.

The student continues attendance at School A for the Summer 2012 term.  Because the student has only received 50% of her 2011-2012 Pell Grant Scheduled Award, she receives the remaining 50% for the summer.  School A disburses her Pell Grant on August 10 and reports that disbursement to COD on September 4, 2012, well within the 30 day reporting deadline.

The student is admitted to and plans to attend School B for the Fall 2012 term.  On July 1, 2012, School B, based on information available to it (e.g., COD, ISIR, rosters) awards the student a Pell Grant for the Fall term only, since the student had remaining eligibility of only 50%.  School B re-checks the student’s Pell LEU percentage prior to disbursing her award, and, finding no change, disburses all of the student’s Fall term Pell Grant on September 4.

After School B reports its summer disbursement to COD on September 4, the student’s Pell LEU increases to 650% (initial Pell LEU of 550% + 50% from School B + 50% from School A), which exceeds the new eligibility limitation.  Because both schools complied with all requirements – School A reported within 30 days and School B checked the LEU before disbursing - the student would be liable for the excess funds.  There are no exceptions in the law to allow a student to receive more than the equivalent of six years of Pell Grant.

However, if School A had reported its summer disbursement earlier in the 30 day required timeframe, for instance, August 20, School B would have been informed of the higher Pell LEU percentage before it disbursed the Fall term Pell Grant.

Contact Information

If you have questions regarding the information included in this announcement, contact the COD School Relations Center at 800/474-7268 or by e-mail at CODSupport@acs-inc.com.

We appreciate your help in the implementation of the Pell LEU limit and the assistance you provide to students and their families who benefit from the Federal Pell Grant Program.

   

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