| AwardYear: 1996-1997 EnterChapterNo: 4 EnterChapterTitle: Federal Pell Grant Program SectionNumber: 5 SectionTitle: Recalculating Federal Pell Grant Awards PageNumbers: 63-66 The Pell award may have to be recalculated if the student's information changes after the initial calculation or disbursement. Of the significant factors that go into calculating a Pell award, the three that are most likely to change are the EFC, enrollment status, and COA. The Federal Pell Grant Program regulations specify when a school must recalculate an award to take these changes into account. The recalculation may require adjustments in the student's subsequent payments, or even repayment of the entire grant, as discussed in Section 6 of this chapter. Note that for 1995-96, a school was required to recalculate any Pell that was not calculated in accordance with the clock hour/credit hour conversion regulations. (See Chapter 3 for more on these regulations.) CHANGE IN THE EFC [[Types of EFC changes]] A student's EFC may change during the award year for three reasons: 1. CORRECTIONS. The student may have to correct an error on the original FAFSA or on the previous SAR or ISIR. This frequently occurs as a result of verification, but it may also be a result of the student's own review of his or her data. If the student has already been paid based on the original EFC, the award will have to be recalculated. 2. UPDATING. Students selected for verification are required to update three projected data elements if they change for a reason other than a change in marital status: dependency status, household size, and the number of family members in postsecondary education. 3. PROFESSIONAL JUDGMENT. The aid administrator may, on a case-by-case basis, adjust one or more of the data elements used to calculate the EFC. The aid administrator may need to adjust the data elements during the award year to reflect a student's changed circumstances: For example, if a wage-earning parent dies after the student's first semester, the aid administrator could adjust the adjusted gross income in the EFC formula to reflect the loss of income. [[Recalculation based on SAR or ISIR]] [[Exception: verification extension--34 CFR 668.60(c)(1)]] If the school receives a SAR or ISIR with an EFC different from the one used for the payment calculation, the school must first decide which document is valid. If the new information is the valid information, in most cases the school must recalculate the student's Pell award for the entire award year based on the new EFC. However, there is one exception: A student selected for verification cannot INCREASE his or her eligibility if the school obtains the corrected SAR or ISIR during the "verification extension" period (60 days after the student's last day of enrollment, not to extend beyond August 30 following the end of the award year). For example, if the student submits a reprocessed SAR during the extension period and the SAR has a lower EFC than the previous SAR (thereby increasing the student's eligibility), recalculation is NOT permitted. The student would be paid based on the HIGHER EFC on the SAR that was submitted earlier. However, if the corrections REDUCE the student's eligibility (that is, if the reprocessed SAR had a higher EFC), then the award must be calculated based on the reprocessed SAR. CHANGE IN ENROLLMENT STATUS Pell payments to students in clock-hour programs and programs without terms are always based on the full-time Payment Schedule; therefore, no recalculation is necessary for changes in the hours taken by students in these programs. [[Required recalculation: student does not attend class]] In a term program that uses credit hours, a school must calculate a student's payment for each term based on the enrollment status and length of enrollment for that term. If a student attended full time for the first term and then enrolled half time in the second term, the school must use the half-time enrollment status to adjust the student's payment for the second term. In addition, if the student does not begin attendance in all of his or her classes, the school must recalculate the student's award based on the lower enrollment status. For instance, a student registers for a full-time course load (15 hours) but only begins attendance in three classes (9 hours); in this case, the student's Pell must be recalculated based on the lower enrollment status. [[Optional recalculation: enrollment change within a term]] The regulations do not require any recalculation for changes in enrollment status after the student has begun attendance in all of his or her classes. However, some schools have a policy of recalculating an award if a student's enrollment status changes at any time within a term. If such a policy is established, it must be applied consistently to all students: If the school chooses to recalculate for a student who changes from half time to full time, it must also recalculate for a student whose enrollment status decreases. [[Payment when enrollment changes within a term]] If a school does not establish a policy for recalculation within a payment period, a student who begins attendance in all classes would be paid based on the initial calculation, even if his or her enrollment status changes before the payment is made. For instance, a student registers full time, submits a SAR, and begins attending all of her classes. The financial aid administrator calculates a full-time award but, by the time the student comes to pick up the check, she has dropped to half-time enrollment. The student is still paid based on full-time enrollment, as long as she is still eligible for the payment. On the other hand, if the student did not submit her SAR until after she had dropped to half-time enrollment, the Pell calculation would be based on the student's enrollment status at that time (half time). (A more drastic change in enrollment status, when the student withdraws from school completely, is discussed in Chapter 3, Section 5, "Refunds and Repayments.") CHANGE IN COST OF ATTENDANCE [[COA must be for full year]] Schools are not required to recalculate Pell awards for COA changes during the award year. However, if the school recalculates Pell awards for a change in enrollment status, it MUST ALSO take into account any changes in the COA at that time. For example, if a student enrolls full time for the first semester and then drops to less- than-half time during that semester, the student's COA will change. If it is the school's policy to recalculate for the enrollment change, it must use the cost for a less-than-half-time student FOR A FULL YEAR to calculate the student's less-than-half-time award. The school cannot combine the two costs or average them. [[COA changes between payment periods]] Some schools choose to recalculate awards when the COA changes from one payment period to the next--for example, because of changes to the student's tuition and fee costs, or because the student's living situation changes (such as when the student moves off campus). A school may recalculate Pell awards for cost changes within the award year, as long as the recalculation policy is carried out for all students whose costs change. [[COA changes within a payment period]] Some schools also recalculate financial aid awards when a student's costs change WITHIN a payment period. For instance, if a student with no dependents moves from a dormitory to off-campus housing at midterm, the school may wish to recalculate the student's award for that payment period. Again, for Pell purposes, such a policy is acceptable if it is carried out for all students whose costs change within the payment period. Note that a school may establish a policy of recalculating for cost changes from one payment period to the next and, at the same time, have a policy not to recalculate for cost changes WITHIN a payment period. Please keep in mind that the school may not recalculate the payment for a payment period that took place BEFORE the cost change. For instance, in the example above, if the student lives in the dormitory during the first quarter and then moves off campus for the second and third quarters, the recalculation would only affect the payments for the second and third quarters. |