AwardYear: 1995-1996 EnterChapterNo: 4 EnterChapterTitle: Federal Pell Grant Program SectionNumber: 2 SectionTitle: Calculating the Federal Pell Grant PageNumbers: 9-64 In this section, we will review the basic steps in calculating a Pell award. These steps, in effect, adjust the Pell award to take into account the student's cost of attendance for the academic year, the student's enrollment status, the ability to contribute to his or her education (EFC), the amount of coursework taken in the award year, and the length of the student's enrollment during the academic year. The regulations published on November 1 revised the calculations, effective July 1, 1995. [[See Section Three for special considerations]] Pell calculations for most programs can be performed by following the steps in this section. However, there are some situations which require further adjustments. These situations are discussed in Section Three, "Special Program Considerations." Check that section to see if these special considerations apply to any of the programs at your school. BASIC CONCEPTS Before we explain the Pell calculation procedures, some basic concepts need to be defined. [[Scheduled Award]] A primary concept in the Federal Pell Grant Program is the "Scheduled Award," which is the amount of a Pell a student receives during an academic year for a given cost of attendance and EFC, assuming the student is enrolled FULL TIME for a FULL academic year. For example, a full-time student with a cost of attendance of $6,000 for a full academic year and a nine-month EFC of 0 may be eligible for the maximum Scheduled Award ($2,340 for 1995-96). A student will receive less than a Scheduled Award if he or she is enrolled less than full time or is enrolled for less than a full academic year. For instance, if a student attends two semesters as a half-time student at a semester-hour school, the student would receive half a Scheduled Award. Or, if the student enrolled full time in a program late in the award year and only completed half of an academic year in that program, he or she would receive no more than half of a scheduled Award. The concept of the Scheduled Award has always been important because it has limited the student to a maximum payment for an award year. The Scheduled Award cannot be exceeded, even if the student transfers to another school or attends a summer session. [[Annual Award]] [[Final Rule 11-1-94]] The annual award is the maximum amount (from the appropriate Payment or Disbursement Schedule) a student would receive during a full academic year for a given enrollment status, EFC, and cost of attendance. Note that for a full-time student, the annual award will be the same as the Scheduled Award. [[Award Year]] The award year begins on July 1 of one year and ends on June 30 of the next year. 1995-96 Award Year = ====== 1995 +---------------------------------+===================+ January 1 July 1 December 31 1996 +====================+--------------------------------+ January 1 June 30 December 31 As already noted, a student cannot be paid more than one Scheduled Award for an award year. The regulations provide that on a case-by-case basis, a student may receive up to a second Scheduled Award during a single 12-month period in certain circumstances. However, no awards can be made under this provision unless the Department determines that sufficient funds are available. There is no funding for payment of a second Scheduled Award for 1995-96; therefore, students will not be able to receive more than one Scheduled Award for the 1995-96 award year. [[Academic Year]] The academic year is used to measure the amount of coursework the student will complete during the award year. The school must define the academic year for each program of study; once it has defined the academic year for that program, it must use that definition for all SFA purposes. An academic year must contain at least 30 weeks of instructional time; within the weeks of the academic year, a full-time student must complete at least 24 semester or trimester hours or 36 quarter hours at a school measuring program length in credit hours, or at least 900 clock hours at a school measuring program length in clock hours. [[Final Rule 11-29-94]] The General Provisions regulations published on November 29, 1994 provide a definition of academic year and allow schools to apply for a waiver of the 30 week minimum. See Chapter Three, Section One for more information on the definition of academic year. [[Calendar weeks vs. weeks of instructional time]] You should note that for the Pell calculations, you will need to determine how many weeks of instructional time are in the program or academic year, or in each term if the school uses terms. In some cases, the weeks of instructional time will not be the same as the number of calendar weeks; Chapter Three explains how to determine weeks of instructional time. Be sure that you do not use calendar weeks when you should be using weeks of instructional time. [[Different academic year for different programs]] Depending on the academic nature of the programs involved, a school may define an academic year differently for different programs of study. For instance, it may set an academic year of 900 clock hours and 30 weeks in one program and 1,200 clock hours and 40 weeks in another. The school may even use a different academic year for an evening program, as opposed to a day version of the same program, as long as each academic year meets the minimum requirements established for an academic year. [[Standard term]] [[Final Rule 11-1-94]] Term-based schools may have either STANDARD TERMS or NONSTANDARD TERMS. Standard terms are semesters, trimesters, or quarters, with two semesters or trimesters or three quarters in the fall through spring terms. In addition, the full-time enrollment status for the term must be at least 12 credit hours. Any other type of term is a nonstandard term. Nonstandard term has sometimes been used to refer only to terms of unequal length, but under this definition even terms of equal length may be nonstandard terms. Now that some basic concepts have been defined, we can move on to the process of calculating a payment for a payment period. The regulations specify five different formulas for calculating Pells; the formula you use depends on the type of program. However, each formula has the same basic steps. We will begin by explaining how to determine which formula to use. We will then describe the basic calculation steps, and explain how the steps vary for different formulas. Finally, examples of calculations are provided. CHOOSING A FORMULA [[Formula 4 or 5]] Formula 4 or 5: Three of the formulas (Formulas 1, 2, and 3) are used for credit-hour, term-based programs. Of the remaining two formulas, Formula 4 is used for all clock-hour programs and for nonterm credit-hour programs, and Formula 5 is used for students enrolled only in correspondence courses (not including residential components of correspondence programs). Calculations for correspondence programs are discussed separately beginning on page 4-31 of this section. [[Formula 3]] Formula 3: A school can use Formula 3 to calculate Pells for any credit-hour, term-based program. However, if the program meets certain requirements, Formula 1 or 2 may also be used. If the program meets the requirements for more than one formula, the school may choose which formula to use. [[Formula 1 or 2]] Formula 1 or 2: To qualify for Formula 1 or 2, the program must- - use an academic calendar that includes two semesters or trimesters (fall and spring) or three quarters (fall, winter, and spring); - not have overlapping terms (that is, the beginning and end of the term must be the same for all students in the program); and - define 12 credit hours as full-time enrollment for each term. If the program provides at least the statutory minimum of weeks for an academic year (30 weeks of instructional time, unless the school has received a waiver from the Department) in the fall through spring terms, Formula 1 may be used. If it does not provide this minimum in the fall through spring terms, Formula 2 may be used. Note that in both cases the school may decide to use Formula 3 instead. No matter what formula you use, there are five basic steps to calculating a Pell award: [[Step 1]] Determine Enrollment Status [[Step 2]] Calculate Cost of Attendance [[Step 3]] Determine Annual Award [[Step 4]] Determine Payment Periods [[Step 5]] Calculate Payment for a Payment Period We will now discuss each of these steps in more detail. DETERMINING ENROLLMENT STATUS The student's enrollment status is based on the number of credit or clock hours for which the student enrolls. It determines which cost components are used to calculate the student's Pell cost of attendance (COA) and, for some programs, establishes which Payment or Disbursement Schedule is used to determine the student's annual award. [[Enrollment status change during year]] If a student's enrollment status changes during the year, the school may have to recalculate the student's Pell payment based on the student's new enrollment status. See Section Five of this chapter for a discussion of when a school is required to recalculate based on a change in enrollment status. For credit-hour programs with terms, the school must determine whether the student is enrolled full-time, three-quarter-time, half- time, or less than half-time. This allows the school to determine which Payment or Disbursement Schedule it needs to use. For clock-hour programs and for credit-hour programs without terms, the school only needs to determine if the student is enrolled at least half-time or less than half-time, so that it can calculate the COA correctly. [[School defines full-time enrollment]] If the school has standard terms (i.e., semesters, trimesters, or quarters), it may establish its own standards for determining enrollment status for each of its academic programs, provided its standards meet the minimum requirements defined in the regulations. Note that the school's academic standard may differ from the enrollment standard used by the financial aid office for SFA purposes. For example, the school may define full-time as six hours during the summer; however, the financial aid office uses 12 hours as full-time for all terms including the summer term. The school must apply its standards consistently to all students enrolled in the same program of study, for all SFA purposes. The following charts show the minimum regulatory requirements for each enrollment status classification for students not enrolled in correspondence coursework. For standard term-based programs, if a school's financial aid office establishes full-time status as greater than 12 semester or quarter hours, the financial aid office may still define a three-quarter-time enrollment status as nine semester or quarter hours and a half- time enrollment status as six semester or quarter hours. Enrollment Status Minimum Requirements (Standard Term, Credit-Hour Programs) - To Be Considered: A student must take at least -- Full-time: 12 semesters or quarter hours per term Three-quarter-time: 9 semester or quarter hours per term Half-time: 6 semester or quarter hours per term Less than half-time: Less than half the workload of the minmum full-time requirement Enrollment Status Minimum Requirements -- (Clock-Hour Programs or Nonstandard-Term or Nonterm Credit- Hour Programs) To Be Considered: A student must take at least - Full-time: 24 semester hours or 36 quarter hours per academic year, or prorated equivalent for program less than an academic year or 24 clock hours per week Less than half-time: Less than half the workload of the minimum full-time requirement [[Enrollment status for nonstandard terms]] If a school's academic calendar contains nonstandard terms*3*, the school must determine the student's enrollment status for each nonstandard term. To determine enrollment status for a nonstandard term, the school must first determine the number of credit hours required for full-time enrollment status using the following formula: Weeks of instructional time in Credit hours in the nonstandard term year the academic X --------------------------------------- year Weeks of instructional time in program's definition of academic year If the resulting number is not a whole number, it is rounded up to the next whole number. After the school has determined the number of credit hours required for full-time enrollment, the school can then determine the less-than-full-time status for the nonstandard term using the following formula: Credit hours student takes in the nonstandard term ---------------------------------------------------------------- Credit hours required for full-time status in the nonstandard term The resulting fraction is then matched with the appropriate less-than-full-time status classification. The fraction must equal or exceed the enrollment status classification. For example, two-thirds would correspond to a half-time enrollment status. The following example illustrates how the enrollment status for a nonstandard term is determined. EXAMPLE: The academic calendar for a student's program of study consists of four 8-week terms. The school defines the program's academic year as 24 semester hours and 32 weeks of instructional time. A full- time student is expected to complete at least 24 semester hours during an academic year. The minimum number of semester hours for full-time status during each of the terms is calculated as follows: 8 weeks 24 semester hours X ----------- = 6 semester hours 32 weeks Therefore, a student must complete 6 semester hours each term to be a full-time student. A student enrolls for four semester hours during the first 8-week term and for six semester hours during wach of the remaining 8- week terms. The student's enrollment status for the first term is calculated as follows: 4 semester hours 4 2 --------------------- = --- = --- 6 semester hours 6 3 Because two-thirds is less than three-quarters but greater than one-half, the student's enrollment status is half-time. For the remaining three terms, the student's enrollment status meets the requirement for full-time (6 semester hours); therefore, the student is enrolled full-time for those three terms. STEP 1: DETERMINE ENROLLMENT STATUS Formula 1, Formula 2, Formula 3: - Full-time, 3/4-time, 1/2-time, or less than 1/2 time Formula 4: - At least 1/2-time or less than 1/2-time CALCULATING THE COST OF ATTENDANCE The components used to calculate a student's Pell COA are the same as those used to calculate the COA for the other SFA programs. See Section Two of Chapter Two for a list of these components. [[Cost for full-time for full academic year]] Although schools must use the same components for calculating a student's cost for the Federal Pell Grant Program as for the other SFA programs, the Pell COA is always based on costs for a FULL- TIME STUDENT FOR A FULL ACADEMIC YEAR. That is, the amount of each component must always be a full-time, full academic year cost. [[Less than half time]] If the student is enrolled less than half-time, the aid administrator may include in the Pell COA only those cost components allowable for less-than-half-time enrollment. See Chapter Two for more information, and for other restrictions on COA components. For students who are less than half time, COA may include only: + tuition and fees; + an allowance for books and supplies; + transportation (but not miscellaneous expenses); and + an allowance for dependent care and expenses The major difference between the COA for Pell and for other SFA programs is that under Pell, costs for programs or enrollment periods longer or shorter than an academic year must be prorated so that they apply to one full academic year.*4* This is true for both components of the academic year definition, the number of weeks and the number of clock/credit hours: if the program or period of enrollment differs from the academic year in either component, the costs must be prorated to determine the Pell COA. For purposes of this proration, COA components are now grouped into two categories: [[Costs: credit/clock hours]] 1. Costs associated with credit or clock hours (that is, costs associated with the educational program)-- - Tuition and fees - Books and supplies*5* - Loan fees*5* The costs associated with credit hours DO NOT HAVE TO BE PRORATED if they represent the cost for a full-time student to attend a full academic year (at least 24 semester hours, 36 quarter hours or 900 clock hours). [[Costs: weeks of instructional time]] 2. Costs associated with weeks of instructional time-- - Room and board*5* - Miscellaneous expenses*5* - Disability expenses*5* - Transportation*5* - Dependent care*5* - Study abroad - Reasonable costs associated with employment as part of a cooperative education program Costs associated with weeks DO NOT HAVE TO BE PRORATED if they represent the cost for a full-time student to attend a full academic year (at least 30 weeks of instructional time). Although the law specifies one combined allowance for books, supplies, transportation, and miscellaneous personal expenses, the aid administrator must establish separate cost categories for books and supplies and for transportation and miscellaneous personal expenses, in order to properly prorate the costs. [[Credit/clock hour proration]] To prorate costs associated with credit/clock hours, use the following formula: Credit/clock hours in program's definition of academic year Costs X ------------------------------------------- Credit/clock hours for which costs apply [[Week proration]] Prorate costs associated with weeks of instructional time by using this formula: Weeks of instructional time in program's definition of academic year Costs X --------------------------------------------- Weeks of instructional time for which costs apply The student's Pell COA is the sum of the costs (prorated if necessary) for components associated with credit hours and components associated with weeks of instruction. This Pell COA must be used when determining the amount of the student's annual award. Following are some examples showing how to determine full-time, full-year costs. EXAMPLE 1: A school's academic calendar consists of two 14-week semesters, providing 28 weeks of instructional time (the school was not granted a waiver of the 30-week requirement). A student is enrolled in a program for two semesters. The school defines the academic year for the program as 24 semester hours and 30 weeks of instructional time. The school has determined that the student's full-time costs for the two semesters include $2,500 tuition and fees, $6,000 room and board, $450 books and supplies, $250 transportation, $1,200 dependent care, and $600 miscellaneous personal expenses. Credit hour costs: Week costs: $2,500 tuition and fees $6,000 room and board + $450 books and supplies +$250 transportation -------- +$1,200 dependent care =$2,950 total +$600 misc. personal expenses --------- = $8,050 total Because the costs have been determined for a period meeting the minimum number of credit hours for full-time for a full academic year (24 semester hours), the costs associated with credit hours (tuition and fees, books and supplies) do not have to be prorated. However, because this period is shorter than the academic year definition in number of weeks, the costs associated with weeks (room and board, transportation, dependent care, and miscellaneous personal expenses) must be prorated: 30 weeks $8,050 X ------------------ = $8,625 28 weeks Therefore, this student's Pell COA for an academic year is $2,950 + $8,625 = $11,575. EXAMPLE 2: A student is enrolled in a 25-week, 750-clock-hour program, with the following costs: $3,000 tuition and fees, $2,500 room and board, $300 books and supplies, $200 transportation, and $400 miscellaneous personal expenses. The school defines the academic year for this program as 900 clock hours and 30 weeks of instructional time. Clock hour costs: Week costs: $3,000 tuition and fees $2,500 room and board +$ 300 books and supplies +$ 200 transportation -------- +$ 400 miscellaneous =$3,300 total personal expenses -------- = $3,100 total Because the student's program is shorter than the academic year both in weeks and clock hours, both types of costs must be prorated: 900 clock hours Clock hour costs $3,300 X -------------------- = $3,960 750 clock hours 30 weeks Week costs $3,100 X ----------- = $3,720 25 weeks Therefore, this student's Pell COA is $3,960 + $3,720 = $7,680. [[Actual vs. average cost]] While schools have the option of determining actual costs for individual students, most schools prefer to determine the COA by using an average cost for a group of similar students. (For example, your school may have different charges for different academic programs or different charges for in-state vs. out-of-state students.*6*) [[Step 2 summary by formula]] Calculate Pell COA Formula 1: + Full-time, full academic-year costs Formula 2: (1) Full-time, full-year costs for tuition, fees, books, supplies, loan fees (2) Full-time, full-year costs for room, board, transportation, miscellaneous personal, dependent care, study abroad, disability- related, and employment-related cooperative education program expenses must be prorated upward to obtain costs for a full academic year according to the following formula: Weeks of instuctional time in program's definition of academic year Costs X ------------------------------------------------ Weeks of instructional time in the fall through spring terms + COA = (1) + (2) Formula 3 and Formula 4: + Full-time, full academic year costs + If the student's program of study or enrollment period is longer or shorter than an academic year, full-time costs are prorated upward (or downward) using the following formulas: (1) For tuition, fees, books, supplies, and loan fees: Hours in program's definition of academic year Costs X ------------------------------------- Hours in student's program of study (2) For room, board, transportation, miscellaneous personal, dependent care, study abroad, disability-related, and employment-related cooperative education program expenses: Weeks of instructional time in program's definition of academic year Costs X --------------------------------------------- Weeks of instructional time in the enrollment period to which the costs apply + COA = (1) + (2) DETERMINING THE ANNUAL AWARD Once you have figured the student's COA, you can use the Payment Schedule or appropriate part-time Disbursement Schedule*7* to look up the student's annual award. As mentioned earlier, the annual award is the maximum amount a student would receive during a full academic year for a given enrollment status, EFC, and cost of attendance. For students enrolled in clock-hour or nonterm credit-hour programs, the annual award is always determined from the full-time Payment Schedule, even if the student is attending less than half time. PLEASE REMEMBER THAT YOU DO NOT HAVE THE DISCRETION TO REFUSE TO PAY AN ELIGIBLE PART-TIME STUDENT. [[Step 3 summary by formula]] DETERMINE ANNUAL AWARD Formula 1, Formula 2, Formula 3: + If the student's enrollment status is full-time, the annual award is taken from the full-time Payment Schedule (Sceduled Award). If the student's enrollment status is 3/4-time, 1/2-time, or less than 1/2-time, the annual award is taken from the appropriate part-time Disbursement Schedule. Formula 4: + Always taken from full-time Payment Schedule (Scheduled Award) DETERMINING THE PAYMENT PERIODS The program's academic year is divided into payment periods. Pell awards must be paid in installments over the academic year to help meet the student's cost in each payment period. The payment period determines when Pell funds are disbursed and the exact amount to be disbursed. [[Term programs]] For term programs, the payment period is the term. However, if the term program is measured in clock hours, the student must complete all hours scheduled for a term before receiving another disbursement. See "Terms With Clock Hours" in this section for more information on how to determine subsequent payment periods if the student does not complete all clock hours in a term. [[Nonterm programs]] For nonterm programs, the school must define, in writing, the payment periods as measured in clock or credit hours for each program. The regulations require that there be at least two equal payment periods for programs that are shorter than an academic year, or at least two equal payment periods in each academic year for programs longer than an academic year. [[Less than AY]] [[Equal to or longer than AY]] If the program of study is shorter than an academic year, each payment period is the period of time in which the student completes half the credit or clock hours in the program. If the program of study is equal to or longer than an academic year, each payment period is the period of time in which the student completes half the credit or clock hours in the academic year. If the number of credit or clock hours to be completed in the final academic year is fewer than the number in the academic year, each payment period is the period of time in which the student completes either half the academic year or all of the remaining hours in the program, whichever is shorter. [[More frequent payment periods]] Regulations also permit a school to establish more frequent payment periods for its programs of study. For example, a school may choose to use monthly payment periods. The payment periods must be equal in number of credit or clock hours, except that a final payment period for a program may be shorter than the other payment periods. For all nonterm programs, the payment period ends when the student has completed all the credit or clock hours in the payment period. Because the length of a payment period (measured in weeks of instructional time) is based on what a full-time student is expected to complete, part-time students will take longer than full- time students to complete each payment period. However, as we will discuss in Step 5, the number of weeks of instructional time that is used in the formula to calculate the payment for the payment period will remain the same. The following examples will help to illustrate these minimum requirements for determining the payment period for nonterm programs. NONTERM PAYMENT PERIOD EXAMPLES EXAMPLE 1 Andrea is enrolled in a 600-clock-hour program of study. The school defines the program's academic year as 900 clock hours and 30 weeks of instructional time. Because Andrea's program is shorter than an academic year, the two payment periods would be based on the length of her program (in clock hours). Each payment period is one-half the program, or 300 clock hours. |----------------------Academic Year------------------| |---1st p.p.----|------2nd p.p.------| EXAMPLE 2: Bill in enrolled in a 900-clock-hour program of study. The school defines the program's academic year as 900 clock hours and 30 weeks of instructional time. Because Bill's program is equal to an academic year, the two payment periods are based on the length of the academic year (in hours). Each payment period is half an academic year, or 450 clock hours. |----------------------Academic Year------------------| |---------1st p.p.-----------|---------2nd p.p.----------| EXAMPLE 3: Charles is enrolled in a 1,200-clock-hour program of study. The school defines the program's academic year as 900 clock hours and 30 weeks of instructional time. Because Charles' program of study is longer than one academic year, the payment periods in the first year are based on the length of the academic year. Each of these payment periods is 450 clock hours (half the academic year). After the first year, only 300 clock hours remain, less than an academic year. Because 300 hours is less than half the academic year, the remaining 300 clock hours is the third and final payment period. |--------------------Academic Year------------------| |-------1st p.p.-----------|----------2nd p.p.----------|-------3rd p.p.----| [[Step 4 summary by formula]] STEP 4: DETERMINE PAY PERIODS ACADEMIC YEAR |----1/2----|----1/2----| FORMULA 1, FORMULA 2, FORMULA 3: + Payment period is the academic term FORMULA 4: For nonterm programs: + Minimum of 2 equal payment periods required for programs shorter than an academic year, or 2 equal payment periods in each academic year for programs longer than or equal to an academic year + Length of payment period measured in credit or clock hours (1) Program shorter than an academic year: + Payment period = time it takes a full-time student to complete 1/2 of the program in credit or clock hours (2) Program = an academic year: + Payment period = time it takes a full-time student to complete 1/2 of the academic year in credit or clock hours (3) Program longer than an academic year: + First and second payment periods same as (2) above + Subsequent full academic years same as (2) above + If the remaining portion of the program is shorter than an academic year, each payment period is either 1/2 the academic year or the time it takes a full-time student to complete the remaining hours in the program, whichever is completed first. For term-based, clock-hour programs: + Payment period is the academic term, but extends for as long as it takes the student to complete the clock hours for which payment has been made + If the payment period extends into another term: + Subsequent payment period consists of only those hours not included in the previous term + Remaining clock hours are accounted for by an additional payment period at the end of the students program of study CALCULATING THE PAYMENT FOR A PAYMENT PERIOD Once you have determined the payment period, you can determine how much of the annual award the student will receive for that payment period. A student may receive a Pell payment only for those terms, or payment periods, in which the student is enrolled. For some students, the total disbursements for all payment periods within the award year will equal the amount of the Scheduled Award. However, students who attend for less than an academic year (in either clock/credit hours or weeks of instructional time) will not receive a full Scheduled Award. This may occur if the student enrolls for only part of the year, attends part-time, or if the program is less than an academic year in length. These enrollment variations are taken into account in the calculation of the student's payment for the payment period. The four calculation formulas discussed in this section account for these variations differently; therefore, we will describe the calculation for each formula separately. [[Formula 1]] For a program using Formula 1, a student will attend less than an academic year only if he or she enrolls part-time or does not enroll in all terms in the academic year. The adjustment for part-time enrollment is made in determining the annual award (by using the appropriate part-time Disbursement Schedules). The adjustment for a student not enrolling in all terms is made by dividing the annual award evenly between the terms. If the student does not enroll in a term, he or she will not receive that part of the award. Therefore, to determine the payment for a payment period, divide the annual award by the number of payment periods in the academic year (two for semesters or trimesters, three for quarters). However, if the school has a summer term, it may wish to use an alternate calculation that spreads the award over the summer term as well. See "Summer Terms" later in this section for more information. Annual Award ----------------------------------------- Number of payment periods in the programs definition of academic year [[Formula 2]] For a program using Formula 2, a student will attend less than an academic year in credit hours only if he or she enrolls part-time or does not enroll in all terms (fall through spring) in the academic year. As for Formula 1, the adjustment for part-time enrollment is made in determining the annual award (by looking up the award on the appropriate schedule). Because the fall through spring terms provide fewer than 30 weeks of instructional time, the school must always adjust for less than an academic year in weeks by prorating the annual award using the following formula: Weeks of instructional time in programs definition of academic year Annual Award X ------------------------------------------------ Weeks of instructional time in fall through spring terms Then, to adjust for students not attending all terms, the award is divided evenly between terms. To determine the payment for one payment period, divide the PRORATED annual award by the number of terms in the year (two, for semesters or trimesters, three for quarters). If the school has a summer term, it may use the alternate calculation mentioned earlier to distribute the award over all terms. See "Summer Terms" later in this section. The following example shows how to prorate the annual award under Formula 2: EXAMPLE: The schools academic calendar consists of two 14-week semesters. During the award year Alan is enrolled half-time for two 14-week semesters (fall and spring). The school defines the academic year for the program as 24 semester hours and 30 weeks of instructional time. His annual award (taken from the half-time Disbursement Schedule) is $825. Because the number of weeks of instructional time for Alans period of enrollment is less than 30 weeks, his annual award must be prorated: 28 weeks $825 X ---------- = $770 30 weeks This prorated annual award can then be divided by two (the number of terms in the year) to determine the payment for one payment period: $385. [[Formula 3]] Under Formula 3, the school also adjusts for less than an academic year by using enrollment status in determining the annual award and by distributing the award over terms. Because the program uses nonstandard terms (which may not be of equal length), the award cannot simply be divided evenly among the terms. Instead, the school must multiply the annual award by a fraction representing the proportion of an academic year the payment period contains. This adjusts for the period of enrollment being less than an academic year either because the student misses a term or because the terms provide less than an academic year. To calculate a student's payment for a payment period, the school uses the following formula: Weeks of instructional time in term Annual Award X ------------------------------------------------ Weeks of instructional time in programs definition of academic year If the resulting amount is more than 50 percent of the annual award, the school must make the payment in at least two disbursements. A single disbursement may never be more than 50 percent of the annual award. [[Formula 4]] Unlike the preceding three formulas, no adjustment for enrollment status is made in determining the annual award under Formula 4. Instead, a comparable proration based on hours enrolled must be performed. The calculation for the payment period adjusts the annual award both if the student will be enrolled in fewer credit/clock hours than in a full academic year (an adjustment mainly handled by enrollment status in the other formulas) and if the student will be attending fewer weeks than a full academic year. To adjust for fewer weeks, the school must multiply the annual award by the lesser of: Weeks of instructional time for a full-time student to complete hours in the program --------------------------------------------------- Weeks of instructional time in program's definition of academic year OR Weeks of instructional time for a full-time student to complete hours in the academic year ------------------------------------------------------------ Weeks of instructional time in program's definition of academic year OR ONE (1) Note that the result of this multiplication can never be greater than the original annual award. Because the annual award has not been adjusted for enrollment status, the fractions use the weeks of instructional time for a FULL-TIME STUDENT to complete the hours in the program or academic year. The school must determine the weeks of instructional time it takes a full-time student to complete the hours based on the timeframe required for the majority of its full-time students to complete the program or academic year, not student by student. Then, to adjust for fewer clock/credit hours, the school must multiply this adjusted annual award by the following fraction: Credit/clock hours in a payment period ----------------------------------------------- Credit/clock hours in program's definition of academic year The resulting amount is the payment for a payment period. However, if this amount is greater than 50 percent of the annual award (which will only occur in a term-based program), the school must make the payment in at least two disbursements. A single disbursement may never be more than 50 percent of the annual award. The following example illustrates how to calculate a payment under this formula. EXAMPLE: Drew is expected to complete a 720-clock-hour program over 24 weeks of instructional time as a full-time student. The school defines the program's academic year as 900 clock hours and 30 weeks of instructional time. Each of the payment periods for Drew's program is 360 clock hours. Drew's annual award is $1,850. The school calculates the expected disbursement for each term as follows. First, the school must determine the lesser of the two numbers to be used in the formula (number of weeks in the program divided by number of weeks in the academic year, or 1). In this case, the number of weeks of instructional time for a full-time student to complete the hours in the program is less than the number of weeks in the academic year. Therefore, the lesser number is the fraction: 24 weeks in the program 4 ------------------------------------ + ---- 30 weeks in an academic year 5 Drew's annual award is multiplied by this fraction: $1,850 x 4/5 = $1,480 The school then multiplies this adjusted award by the second fraction (clock hours in payment period divided by clock hours in academic year): 360 clock hours $1,480 X ------------------ = $592 payment for each 900 clock hours payment period The total disbursements for the award year equal $1,184 ($592 times two payment periods). [[Step 5 summary by formula]] STEP 5: CALCULATE PAYMENT FOR A PAYMENT PERIOD FORMULA 1: + For each payment period: Annual Award ------------------------------------------------------ Number of payment periods in the program's definition of academic year FORMULA 2: + Proration required + For each payment period: Weeks of instructional time in 2 (if semesters Annual the fall through spring terms or trimesters) Award X --------------------------------- ÷ OR Weeks of instructional time in 3 (if quarters) program's definition of academic year FORMULA 3: + For each payment period: Annual Weeks of instructional time in the term Award X ---------------------------------------------- Weeks of instructional time in program's definition of academic year + A single disbursement may not exceed 50% of the annual award FORMULA 4: + For each payment period: (1) Annual award x the lesser of : Weeks of instructional time for a full-time student to complete hours in program ----------------------------------------------- Weeks of instructional time in program's definition of academic year OR Weeks of instructional time for a full-time student to complete hours in academic year ------------------------------------------------ Weeks of instructional time in program's definition of academic year OR One (1) (2) The results of (1) are then multiplied by: Hours in a payment period ----------------------------------------------------- Hours in program's definition of academic year + A single disbursement may not exceed 50% of the annual award SUMMER TERMS If a school offers a summer term in addition to the fall through spring terms, the school may choose to calculate the student's payment for the summer term by using the same formula used to calculate the payment for each term within the school's fall, winter, or spring terms. However, for a program for which the school calculates awards using Formula 1 or 2, the school may perform an alternate calculation for all students enrolled in the program that distributes the annual award over all the terms. [[Full-time status definition]] Regardless of the method the school chooses to calculate the student's summer payment, regulations now require the aid administrator to apply the school's definition of full-time status consistently to all SFA programs. In addition, in order to calculate a student's Pell for the summer under Formula 1 or 2 or under the alternate calculation, the aid administrator must define full-time enrollment during the summer as at least 12 credit hours. [[Alternate calculation]] To perform the alternate calculation, the school divides the annual award by the number of terms (including the summer term) in the award year. If the school chooses this alternate calculation, the school must use the alternate calculation for ALL STUDENTS enrolled in the same program of study, increase the number of weeks of instructional time in the academic year defined for the student's program to include the number of weeks in the summer term, and include the costs for the additional term in the Pell COA. The school may also include the number of credit hours for the additional term in the academic year defined for the student's program. If the school does not choose to use the alternate calculation and calculates the payment for the summer term using Formula 1 or 2, the school must ensure that the amount of Pell funds the student receives for the award year does not exceed the Scheduled Award. [[Summer mini-sessions]] [[Final Rule 11-1-94]] If a term-based school offers a series of mini-sessions that overlap two award years (by "crossing over" the June 30 end date for one award year), these mini-sessions MAY be combined and treated as one term. However, schools are no longer REQUIRED to combine these mini-sessions. The weeks of instructional time in the combined term are the weeks between the beginning of the first mini-session and the date the last mini-session will end. The student's enrollment status for the entire payment period must be calculated based on either- - the total number of credits the student is taking for all sessions, if that number is known when the award is calculated; or - a projected number of credits based on the credits the student is taking for the first session, if the number of credits to be taken in subsequent sessions is unknown when the award is calculated. If the school combines mini-sessions into a single term, a student may not be paid more than the amount for one payment period for completing any combination of the mini-sessions. IMPORTANT: Note that recalculation is required if the student does not ultimately attend the projected classes in a subsequent mini-session. See "Change in Enrollment Status" in Section Five of this chapter. If the school does not combine mini-sessions into a single payment period, it must treat each mini-session as a separate nonstandard term and calculate the payment for each using Formula 3. CORRESPONDENCE STUDY Students enrolled in correspondence courses are eligible for aid under SFA programs only if the courses are part of a program leading to an associate, bachelor's, or graduate degree. [[Half-time limit]] An eligible correspondence program must meet the criteria for an eligible program (see Chapter Three of this handbook). A nonterm correspondence program must require at least 12 hours of preparation per week. A term correspondence program must require 30 hours of preparation per semester hour or 20 hours of preparation per quarter hour during the term. The school determines the length of the correspondence program by preparing a written schedule for the lessons that the student will submit. Students enrolled in programs of correspondence study are considered to be no more than half-time students, and thus are limited to no more than half a Scheduled Award. However, a correspondence student may receive more than half a Scheduled Award if the correspondence program includes a required period of residential training or is combined with class instruction. Formula 5 is used to calculate payments for a payment period for students enrolled only in a correspondence program (not including residential components). There are two versions of Formula 5; version A is used for nonterm programs, and version B is used for term-based programs. (For a residential component of a correspondence program, you must use either Formula 3 or Formula 4.) Formula 5 uses the same basic steps as the other formulas discussed in this section. [[Formula 5]] STEP 1: DETERMINE ENROLLMENT STATUS As stated above, students enrolled in programs of correspondence study are considered to be no more than half-time students. A student enrolled only in a nonterm correspondence program is always considered to be enrolled half time. For a student enrolled in a term correspondence program, you must determine whether the student is enrolled half time (6 or more credit hours in a term) or less than half time (less than 6 credit hours in a term). Special rules are used to determine thestudent's enrollment status when the student is enrolled in a combination of regular and correspondence coursework. See the chart on page 4-70. STEP 2: CALCULATE COST OF ATTENDANCE The COA for correspondence study includes only tuition and fees. Room and board costs and allowances for books and supplies and travel may be included only if the student would incur them in fulfilling a required period of residential training. As always, the cost must be the full-time, full academic year cost. If the student's program or period of enrollment is longer or shorter than an academic year, the cost is prorated using the following formula: Hours in program's definition of academic year Costs X --------------------------------------------------- Hours for which costs apply Note that since there are no costs associated with weeks of instructional time in the correspondence COA, the school will have to prorate the cost only if the number of hours in the program is shorter or longer than in an academic year. STEP 3: DETERMINE THE AMMUAL AWARD The annual award for a student in a nonterm correspondence program is always taken from the half-time Disbursement Schedule, because a correspondence student may not receive more than half a Scheduled Award. For a student in a nonterm correspondence program, the annual award is determined from the half-time Disbursement Schedule or the less-than-half-time Disbursement Schedule, as appropriate. STEP 4: DETERMINE THE PAYMENT PERIODS [[Formula 5A]] For a nonterm correspondence program, there must be at least two equal payment periods. The first payment period is the period in which the student completes the lesser of the first half of the academic year or the program (measured in credit hours). The second payment period is the period in which the student completes the lesser of the second half of the academic year or the program. In addition, the school may not disburse a Pell payment for the first payment period until the student has completed 25 percent of the work in the academic year or program, whichever is shorter. It may not make the second payment until the student has completed 75 percent of the work in the academic year or program. [[Formula 5B]] For a term correspondence program, as for other term-based programs, the payment period is the term. However, you may not disburse the Pell for a payment period until the student has completed 50 percent of the lessons or completes 50 percent of the work for the term, whichever is later. [[Residential training]] If the correspondence program has a required period of residential training, you must treat the residential training as an additional payment period and determine the payment for that payment period using either Formula 3 or Formula 4. Note that the correspondence portion of the program is still treated as a separate portion of the program that is divided into two equal payment periods. Step 5: CALCULATE THE PAYMENT FOR A PAYMENT PERIOD [[Formula 5A]] For nonterm programs, this step is the same as under Formula 4. The school first multiplies the annual award (determined from the half-time Disbursement Schedule, in this case) by the lesser of : Weeks of instructional time for a full-time student to complete hours in the program ---------------------------------------------------- Weeks of instructional time in program's definition of academic year OR Weeks of instructional time for a full-time student to complete hours in the academic year ----------------------------------------------------- Weeks of instructional time in program's definition of academic year OR One (1) The school then multiplies the result by the following fraction: Hours in a payment period ---------------------------------------------- Hours in program's definition of academic year [[Formula 5B]] For term programs, this step is the same as under Formula 3. The school multiplies the annual award by the following fraction: Weeks of instructional time in the term Annual award X ------------------------------------- Weeks of instructional time in program's definition of academic year If the resulting amount is more than 50 percent of the annual award, the school must make the payment in at least two disbursements. A single disbursement may never be more than 50 percent of the annual award. TERMS WITH CLOCK HOURS The amount of a Pell for a student enrolled in clock-hour term programs is calculated under Formula 4, as discussed earlier in this section. However, there are specific rules for the treatment of payment periods in these programs. The payment period for a term-based clock-hour program is the academic term. However, the student must complete all clock hours scheduled for that term before receiving any more Pell funds. If a student has not completed all clock hours scheduled for a term in which he or she has received a Pell payment, the payment period extends beyond that term for as long as it takes the student to complete the originally scheduled clock hours. A payment period that extends into another term will change the pattern of payment periods for the student's program of study. Because subsequent Pell payments may not be made until the student has completed all clock hours for which he or she has received payment, the next payment period will consist of only those clock hours that were scheduled in that term, minus the clock hours completed in that term that belonged to the prior term. Thus, although the payment period will coincide with an academic term, it will be shorter. That is, the payment period will include fewer clock hours than originally scheduled. Those remaining clock hours, caused by the change in the payment period pattern, will shift to an additional payment period at the end of the student's program of study. The following example illustrates how to determine payment periods for term-based, clock-hour programs. [[The payment period examples on page 4-34 are currently unavailable for viewing. Please reference your paper document for additional information.]] In addition, because the shorter payment period has fewer clock hours, the student's payment for that payment period will be less than for the regular payment periods. CHECKING REMAINING ELIGIBILITY: CROSSOVER PAYMENT PERIODS Payment periods do not always fall neatly into one award year or another. When a payment period falls into two award years, it is referred to as a "crossover payment period." [[The "Semester Example" on page 4-35 is currently unavailable for viewing. Please reference your paper document for additional information.]] At a school with a traditional term calendar, the summer term is usually a crossover payment period. The basic calculation for a crossover payment period is the same as that for any other payment period. However, there are additional provisions for some summer terms. See "Summer Terms" in this section. [[Payment from either award year]] The school may make a payment for a crossover payment period out of either award year, provided the student has a valid SAR or ISIR for the award year selected.*8* The decision of which award year to use is usually based on the student's remaining eligibility in the earlier award year. For instance, if a student had already been paid for two semesters (each at least 15 weeks) as a full-time student for a full academic year in the 1995-96 award year, the student would have been paid a full Scheduled Award for that year. However, if the student submits a valid SAR or ISIR for the 1996-97 award year, he or she could be paid for the crossover period from that year's funds. Of course, a student may still be eligible for a summer payment from the earlier award year if the student has not attended for a full academic year. An example would be a student who enrolls at midyear, in the spring session, and still has eligibility remaining for the summer term. As another example, a student could receive a Pell payment for the summer term, even after receiving payments for the other terms in the award year, if the student attended PART TIME in those other terms, or if those terms provided less than 30 weeks of instructional time. [[Costs for crossover payment period]] Costs for a crossover payment period are figured in the same way as for any other payment period-that is, the costs are based on a full academic year. For instance, if your school has fall and spring semesters that comprise an academic year, you must not add the costs for the summer term to the costs for the fall and spring semesters. The award for the summer term is still based on the costs for one academic year. However, if the academic year definition includes the summer term, then the costs for the summer term MUST be included in the cost for a full academic year. If the student was previously enrolled in the award year, you may be able to use the same COA for the summer term that you used for the immediately preceding term the student attended. However, this is not possible if you are required to recalculate the COA. (Section Five of this chapter discusses the rules for recalculating awards- you must recalculate for cost changes if the student's enrollment status has changed, or if your school has established a policy of recalculating costs.) If it is necessary to base the student's COA on the summer term, you must prorate the summer costs to establish the cost for an academic year. See "Calculating the Cost of Attendance" in this section for information on prorating costs. If the summer session is the first term in the award year for that student (for example, you are paying a student for the summer 1995 term from the 1995-96 award year), you must establish the student's full-year cost based on the costs for the SUMMER term. If the student enrolls in another term in that award year, you may have to recalculate the student's costs for the later term (see Section Five.) CHECKING REMAINING ELIGIBILITY: TRANSFER STUDENTS [[SAR OR ISIR and transcript needed]] The school must be careful not to exceed the Scheduled Award when paying a student who has previously received a Pell for the award year at another school. To pay such a student, the school must obtain a SAR or ISIR and a financial aid transcript. There are three ways to obtain the student's application information and official EFC if the student did not list your school on the FAFSA: [[ Duplicate SAR]] 1. Have the student request a duplicate of his or her original SAR and submit it to you. (If your school uses a FAFSA processor different from the one at the student's previous school and you want a SAR produced by your FAFSA processor, you could ask the student to write to your FAFSA processor to request a duplicate SAR.) [[PIN number]] 2. If your school participates in EDE, you can have the student give you his or her Personal Identification Number (PIN) that is printed on the upper right corner of all three parts of the SAR, so that you can obtain the student's data electronically. [[Correct SAR]] 3. Have the student correct his or her SAR to add your school's name to the list of schools in items 90 through 101. [[Financial aid transcript]] The student must make arrangements to have the other eligible school(s) that he or she attended send a financial aid transcript to your school. If the student has not already asked the other school(s) to send the transcript(s), you may request them on the student's behalf. The transcript requirement is discussed in more detail in Chapter Three of this handbook because providing the transcript is one of an school's general administrative responsibilities. [[Calculating the payment]] The Pell payment for a transfer student is calculated in the same way as for any new student. That is, you must divide the annual award (prorated if necessary) into payments for each payment period. However, before paying a transfer student, you must also make sure the student does not receive more than 100 percent of his or her Scheduled Award during the award year. [[Figuring percentage of remaining eligibility]] The information you need is on the financial aid transcript from the previous school. First, find the percentage of the Pell received at that school: Divide the amount the student received at the previous school by the student's Scheduled Award at that school. Then subtract this percentage from 100 percent. The result is the maximum percentage of the Scheduled Award that the student generally may receive at your school. (See the example on the next page.) [[The example on page 4-38 is currently unavailable for viewing. Please reference your paper document for additional information.]] The reason for using percentages is that a transfer student may have different Scheduled Awards because the costs of attendance at the two schools may be different. The percentages are a way of comparing the portions of a student's eligibility that have been used at both schools. (If the student's Scheduled Award is the same at both schools, you can find the amount of the student's remaining eligibility simply by subtracting the amount received at the first school from the Scheduled Award.) Note that a transfer student receives the same payments as any other student until the limit (100 percent of a Scheduled Award) is reached. An example would be a transfer student who enrolls for two terms in the award year at your school and would ordinarily receive a $500 payment for each term. However, the student's remaining eligibility, based on payments at the other school, is only $600. Rather than "rationing" this amount by splitting it into two $300 payments for the two terms, you must pay the student $500 for the first term, and the remainder ($100) for the second term. Thus, the student will have received a full payment for the first term, even if he or she does not return for the second term. FORMULA SUMMARIES On the following pages are summaries of the steps involved in calculating a Pell for each of the five formulas. [[The formula summaries on pages 4-39 through 4-45 are currently unavailable for viewing. Please reference your paper document for additional information.]] CALCULATION EXAMPLES EXAMPLE 1-Hart University (Standard term, credit-hour program/ 30 weeks of instructional time/Formula 1) BACKGROUND Owen enrolls full time in Hart University. Hart University has fall and spring semesters, each of which provides 15 weeks of instructional time. Thus, the two semesters provide the 30 weeks of instructional time that are required for an academic year. The terms do not overlap. The school has defined the academic year for Owen's program as 24 semester hours and 30 weeks of instructional time. The school defines full-time attendance as 12 semester hours per term. Therefore, Hart University can use Formula 1 to calculate Pells for students in this program. Owen attends two semesters of 12 semester hours each in the 1995- 96 award year, and his EFC is 752. The average costs for a full- time student attending both semesters are as follows: Tuition and Fees $4,200 Books and Supplies $600 Room and Board $2,500 Transportation $450 Misc. Expenses $300 Loan Fees $120 ----------------------------------------------------- TOTAL $8,170 STEP 1: Determine Enrollment Status Owen is attending full time (12 semester hours) in each term. STEP 2: Calculate Pell COA Because the two semesters provide a full 30 weeks of instructional time, the full-time, full-year COA is the cost for a full-time student to attend both semesters: $8,170. STEP 3: Determine Annual Award Based on a COA of $8,170 and an EFC of 752, the full-time Payment Schedule shows that Owen is eligible for an annual award of $1,590. STEP 4: Determine Payment Periods Because this is a term program, the payment period is the term (the semester). STEP 5: Calculate Payment for a Payment Period The school divides the annual award by the number of terms: $1,590/2=$795 Therefore, Owen's payment for each payment period is $795; he will receive the full annual award of $1,590 if he actually attends both semesters. [[Recalculation for enrollment change]] Suppose instead that Owen decides to attend only 4 semester hours in the second semester. The school must then recalculate his award. His enrollment status is less than half time. Because he is attending less than half time, his COA can only include tuition and fees, books and supplies, and transportation: Tuition and Fees $4,200 Books and Supplies $600 Transportation $450 ----------------------------------------------------- TOTAL $5,250 Note that the amount for each component in the COA is still the amount for a full-time student for a full year. The school then looks up the new annual award on the less-than-half-time Disbursement Schedule. Based on a COA of $5,250 and an EFC of 752, Owen is eligible for an annual award of $400. The payment period is still the semester. To determine how much Owen can receive for the second semester, the school divides the annual award by the number of terms (2). Owen can now receive $200 for his second semester. EXAMPLE 2-Woodhouse College (Standard term, credit hour program/ 28 weeks of instructional time/Formula 2) BACKGROUND Emma enrolls full time in Woodhouse College. Woodhouse has fall and spring semesters, each of which provides 14 weeks of instructional time. Thus, the two semesters provide 28 weeks of instructional time, shorter than the statutory requirement for an academic year. The terms do not overlap. The school has defined the academic year for Emma's program as 24 semester hours and 30 weeks of instructional time. The school defines full-time attendance as 12 semester hours per term. Therefore, Woodhouse College can use Formula 2 to calculate Pells for students in Emma's program. Emma attends two semesters of 12 semester hours each in the 1995-96 award year, and her EFC is 500. The average costs for a full-time student attending both semesters are as follows: Tuition and Fees $2,600 Books and Supplies $430 Room and Board $2,700 Transportation $300 Misc. Expenses $150 Loan Fees $100 --------------------------------------------------- TOTAL $6,280 STEP 1: Determine Enrollment Status Emma is attending full time (12 semester hours) in each term. STEP 2: Calculate Pell COA Because the two semesters do not provide a full 30 weeks of instructional time, the cost for a full-time student to attend both semesters must be prorated to determine a full academic year COA. Only the costs associated with weeks are prorated, because the number of credit hours meet the minimum requirement for an academic year: CREDIT HOUR COSTS (NOT PRORATED) Tuition and Fees $2,600 Books and Supplies $430 Loan Fees $100 --------------------------------------------------- TOTAL $3,130 WEEK COSTS Room and Board $2,700 Transportation $300 Misc. Expenses $150 ------------------------------------------------- TOTAL $3,150 30 weeks instructional time in academic year definition $3,150 X -------------------------------------- = $3,375 28 weeks instructional time in fall through spring terms Emma's COA is the sum of the two types of costs: $3,130 + $3,375 = $6,505 STEP 3: Determine Annual Award Based on a COA of $6,505 and an EFC of 500, the full-time Payment Schedule shows that Emma is eligible for an annual award of $1,890. STEP 4: Determine Payment Period Because this is a term program, the payment period is the term (the semester). STEP 5: Calculate Payment for a Payment Period Because the two terms provide less than 30 weeks of instructional time, the annual award must be prorated: 28 weeks instructional time in fall through spring terms $1,890 -------------------------------------- = $1,764 30 weeks instructional time in academic year definition This prorated amount is then divided by the number of terms: $1,764/2=$882 Therefore, Emma's payment for each payment period is $882; she will receive $1,764 for her attendance in both semesters. Note that this is less than her annual award; she may be able to receive the remaining $126 if she enrolls in a summer term. [[Summer term]] Woodhouse College offers a summer term, which provides 12 weeks of instructional time. Because Woodhouse defines full-time enrollment in this term as 12 semester hours, it can still calculate Pells using Formula 2. Suppose Emma enrolls half time (6 semester hours) in this term. Woodhouse could use the same COA as for the fall and spring semesters. Emma's annual award for the summer term from the half-time Disbursement Schedule would be $945. Woodhouse would calculate the summer payment as follows: 28 weeks instructional time in fall through spring terms $945 X ----------------------------- = $882 30 weeks instructional time in academic year definition $882/2=$441 Emma's payment for the summer term should be $441; however, she may only receive $126 because otherwise she would receive more than a Scheduled Award in the award year. Note that Woodhouse could also decide to pay Emma for the summer term from the following award year. EXAMPLE 3-Van Dam Conservatory (Nonstandard term, credit-hour program/ 32 weeks of instructional time/ Formula 3) BACKGROUND José enrolls in a two year program at Van Dam Conservatory. Van Dam Conservatory's academic calendar consists of four terms, each of which provides 8 weeks of instructional time. The school has defined the academic year for José's program as 40 quarter hours and 32 weeks of instructional time. Because the program José is enrolled in does not use standard terms (semesters, trimesters, or quarters), the school must use Formula 3 to calculate Pells for students in the program. José attends four terms of 10 quarter hours each in the 1995-96 award year, and his EFC is 323. The school charges the student for the tuition for the entire program when the student begins. The average cost for a full-time student for the entire program is: Tuition and Fees $8,900 Books and Supplies $1,800 Room and Board $8,600 Transportation $1,040 Misc. Expenses $1,700 Loan Fees $240 ------------------------------------------------ TOTAL $22,280 STEP 1: Determine Enrollment Status Because the program has nonstandard terms, Van Dam must determine the number of credit hours required for full-time enrollment in the term as follows: 8 weeks instructional time in term 40 quarter X -------------------------- = 10 quarter hours hours 32 weeks instructional time in academic year Because José is enrolled for ten hours in each term, his enrollment status is full time. STEP 2: Calculate Pell COA Because the program is longer than an academic year, the school must determine the cost for an academic year by prorating the full program cost: CREDIT HOUR COSTS Tuition and Fees $8,900 Books and Supplies $1,800 Loan Fees $240 -------------------------------------------------- TOTAL $10,940 WEEK COSTS Room and Board $8,600 Transportation $1,040 Misc. Expenses $1,700 ------------------------------------------------ TOTAL $11,340 40 quarter hours Credit academic year hour $10,940 X ---------------- = $5,470 costs 80 quarter hours for program 32 weeks instructional time in academic year Week $11,340 X ------------------------- = $5,670 costs 64 weeks instructional time in program José's COA is the sum of the prorated costs: $5,470 + $5,670 = $11,140. STEP 3: Determine Annual Award Based on a COA of $11,140 and an EFC of 323, the full-time Payment Schedule shows that José is eligible for an annual award of $1,990. STEP 4: Determine Payment Periods Because this is a term program, the payment period is the term. STEP 5: To determine José's payment for a payment period, the school uses the following calculation: 8 weeks instructional time in the term $1,990 X -------------------------- = $497.50 32 weeks instructional time in the acedemic year José's payment for the first and third payment periods will be $498 (rounded up from $497.50); his payment for the second and final payment periods must be reduced to $497 so that he is not overpaid. EXAMPLE 4-Hart University (Nonstandard term, credit hour program/ 34 weeks of instructional time/ Formula 3) BACKGROUND In addition to programs using standard semesters, Hart University offers an separate degree program in education with a short 4-week term between two 15-week terms. Helen enrolls in this program part-time. The terms do not overlap. The school has defined the academic year for Helen's program as 24 semester hours and 34 weeks of instructional time. Hart could combine the short term with one of the standard terms and calculate Pells using Formula 1 (assuming that it defined full-time enrollment as 12 semester hours per term); however, it chooses not to combine the terms and instead calculates Pells using Formula 3. Helen attends three terms in the 1995-96 award year; she enrolls for six hours in the first and third terms and three hours in the second term. Her EFC is 1214. The average costs for a full-time student attending a full year are as follows: Tuition and Fees $4,725 Books and Supplies $650 Room and Board $2,500 Transportation $450 Misc. Expenses $300 Loan Fees $120 -------------------------------------------------- TOTAL $8,745 STEP 1: Determine Enrollment Status Because the program has nonstandard terms, Hart must determine the number of credit hours required for full-time enrollment in each term as follows: 15 weeks instructional 24 time in term semester X ------------------------ = 10.58 hours 34 weeks instructional time in academic year 4 weeks instructional 24 time in term semester X ----------------------- = 2.82 hours 34 weeks instructional time in academic year A student must enroll in 11 semester hours (rounded up from 10.58) in the first and third terms and 3 semester hours (rounded up from 2.82) in the second term to be full-time. Note that Helen is enrolled full-time in the second term. To determine Helen's enrollment status for the other two terms, the school must compare the number of hours she is enrolled with the number required for full-time enrollment: 6 semester hours -------------------- = .54 11 semester hours Because .54 is less than three-quarters (.75) and greater than one- half (.5), Helen is enrolled half-time in the first and third terms. STEP 2: Calculate Pell COA The fall through spring terms provide the same number of weeks of instruction as in an academic year, and the school has determined costs for a full-time student for a full academic year. Therefore, the costs provided on the previous page do not need to be prorated. Helen's COA is $8,745. STEP 3: Determine Annual Award Based on a COA of $8,745 and an EFC of 1214, the half-time Disbursement Schedule shows that Helen is eligible for an annual award of $545. For the second term, Helen has an annual award of $1,090 (from the full-time Payment Schedule). Note that her annual award for the second term is the same as her Scheduled Award. STEP 4: Determine Payment Periods Because this is a term program, the payment period is the term. STEP 5: Calculate Payment for a Payment Period To determine Helen's payment for the first payment period, the school uses the following calculation: 15 weeks instructional time in the term $545 X -------------------------- = $240.44 34 weeks instructional time in the academic year Helen's payment for the first payment period will be $240 (rounded down from $240.44). To determine her payment for the second payment period, the school uses this calculation: 4 weeks instructional time in the term $1,090 X ---------------------- = $128.23 34 weeks instructional time in the academic year Helen's payment for the second payment period will be $128 (rounded down from $128.23). Helen's payment for the third term will be $241 (rounded up because the first two were rounded down). She will receive $609 for the entire year. Note that this is less than her Scheduled Award, but more than the annual award based on half-time enrollment. EXAMPLE 5-Waltman Technical Institute (Non-term, credit-hour program/ 20 weeks of instructional time/ Formula 4) BACKGROUND Sean enrolls in a 24-quarter hour program at Waltman Technical Institute. The program is less than an academic year; it can be completed in 20 weeks of instructional time. Waltman does not use terms; therefore, it must use Formula 4 to calculate students' Pells. The school has defined the academic year for Sean's program as 36 quarter hours and 30 weeks of instructional time; it defines full-time enrollment as 36 quarter hours in an academic year. Sean enrolls for 24 quarter hours in 20 weeks of instructional time; his EFC is 137. The average costs for the program are as follows: Tuition and Fees $1,700 Books and Supplies $100 Room and Board $1,000 Transportation $100 Misc. Expenses $200 ---------------------------------------------------- TOTAL $3,100 STEP 1: Determine Enrollment Status Waltman must determine whether Sean is enrolled at least half-time or less-than-half-time. A full-time student would complete 24 quarter hours in 20 weeks of instructional time (prorated from 36 quarter hours in 30 weeks). Therefore, Sean is enrolled at least half- time. STEP 2: Calculate Pell COA Because the program is less than an academic year, the costs for the program must be prorated to determine the cost for a full academic year: CREDIT HOUR COSTS Tuition and Fees $1,700 Books and Supplies $100 ------------------------------------------------ TOTAL $1,800 WEEK COSTS Room and Board $1,000 Transportation $100 Misc. Expenses $200 ------------------------------------------------- TOTAL $1,300 36 quarter hours Credit in academic year hour $1,800 X ----------------- = $2,700 costs 24 quarter hours for program 30 weeks instructional Week time in academic year costs $1,300 X --------------------- = $1,950 20 weeks instructional time in program Sean's COA is the sum of these prorated costs: $2,700 + $1,950 = $4,650 STEP 3: Determine Annual Award Based on a COA of $4,650 and an EFC of 137, the full-time Payment Schedule shows that Sean is eligible for an annual award of $2,190. STEP 4: Determine Payment Periods Sean's program is a nonterm program; therefore, Waltman must establish the payment periods. Because the program is shorter than an academic year, it must have at least two equal payment periods. The school chooses to have two payment periods. Each payment period is the period of time in which the student completes 12 quarter hours (half the hours in the program). STEP 5: Calculate Payment for a Payment Period To calculate Sean's payment, the school uses the following calculations: 20 weeks instructional time for program $2,190 X ---------------------- = $1,460 30 weeks instructional time in the academic year 12 quarter hours in payment period $1,460 X -------------------- = $486.66 36 quarter hours in the academic year Sean's payment for the first payment period will be $487 (rounded up from $486.66). Sean may receive this payment when he begins the program. Sean's payment for the second payment period will be $486 (rounded down, because the first payment was rounded up). Sean may receive this payment after he completes the 12 quarter hours in the first payment period. EXAMPLE 6-Ivers Community College (Term, clock-hour program; 45 weeks of instructional time; Formula 4) BACKGROUND Eileen enrolls in a 1350 clock hour program at Ivers Community College. The program is offered in three terms, each of which is 15 weeks of instructional time. Because this is a clock-hour program, Ivers must use Formula 4 to calculate Pells for students in the program. The school has defined the academic year for Eileen's program as 900 clock hours and 30 weeks of instructional time; it defines full-time enrollment as 30 clock hours per week. Eileen enrolls for 450 clock hours in each term in the 1995-96 award year; her EFC is 251. The average costs for the entire program are as follows: Tuition and Fees $7 00 Books and Supplies $ 50 Room and Board $3,750 Transportation $250 Misc. Expenses $170 ------------------------------------------------- TOTAL $4,920 STEP 1: Determine Enrollment Status Ivers must determine whether Eileen is enrolled at least half-time or less-than-half-time. Eileen is enrolled for 30 hours in each week of the term; therefore, she is enrolled at least half-time under the school's definition. STEP 2: Calculate Pell COA Because the program is longer than an academic year in length, the costs for the program must be prorated to determine the costs for an academic year. CREDIT HOUR COSTS: Tuition and Fees $700 Books and Supplies $50 ------------------------------------------------ TOTAL: $750 WEEK COSTS: Room and Board $3,750 Transportation $250 Misc. Expenses $170 ----------------------------------------------- TOTAL $4,170 900 clock hours in Credit academic year hour $750 X -------------------- = $500 costs 1350 clock hours for program 30 weeks instructional Week time in academic year costs $4,170 X ----------------------- = $2,780 45 weeks instructional time in program Eileen's COA is the sum of these prorated costs: $500 + $2,780 = $3,280 STEP 3: Determine Annual Award Based on a COA of $3,280 and an EFC of 251, the full-time Payment Schedule shows that Eileen is eligible for an annual award of $2,090. STEP 4: Determine Payment Periods Because the program uses terms, the payment period is the term. However, note that Eileen must complete all the clock hours scheduled for the first term (450) before receiving her second payment. STEP 5: Calculate Payment for a Payment Period To calculate Eileen's payment, the school uses the following calculations: 30 weeks instructional time for program $2,090 X ----------------------- = $2,090 30 weeks instructional time in the academic year 450 clock hours in payment period $2,090 X ------------------ = $1,045 900 clock hours in the academic year Eileen's payment for the first payment period will be $1,045. She may receive this payment when she begins the program. Her payment for the second payment period will also be $1,045; she may receive this payment after she completes the 450 clock hours in the first payment period. [[Clock hours not completed within term]] Suppose that Eileen completes only 400 clock hours in the 1st term. She will not receive her second payment until she completes the remaining 50 hours from the first term in the second term. In addition, the second payment period will be only 400 clock hours. Ivers calculates the payment for this second payment period as follows: 30 weeks instructional time for program $2,090 X ----------------------- = $2,090 30 weeks instructional time in the academic year 400 clock hours in payment period $2,090 X ------------------- = $928.88 900 clock hours in the academic year Her payment for this period will be $929. In the next award year, she will have a payment period of 450 hours, as originally scheduled, followed by a payment period of 50 hours to complete the hours missing from the second term. EXAMPLE 7-Waltman Technical Institute (Nonterm, clock-hour program; 28 weeks of instructional time; Formula 4) BACKGROUND Miranda enrolls in a 650 clock hour program at Waltman Technical Institute. The program is less than an academic year; it provides 28 weeks of instructional time. Because Waltman does not use terms, it must use Formula 4 to calculate Pells for students in Miranda's program. The school has defined the academic year for the program as 900 clock hours and 30 weeks of instructional time; it defines full-time enrollment as 24 clock hours per week. Miranda enrolls for 10 clock hours per week; her EFC is 0. The average costs for the entire program are as follows: Tuition and Fees $1,800 Books and Supplies $100 Room and Board $2,500 Transportation $100 Misc. Expenses $200 -------------------------------------------------- TOTAL $4,700 STEP 1: Determine Enrollment Status Waltman must determine whether Miranda is enrolled at least half-time or less-than-half-time. Miranda is enrolled for 10 clock hours per week; therefore, she is enrolled less than half-time (half-time would be 12 clock hours per week). STEP 2: Calculate Pell COA Because the program is shorter than an academic year in length, the costs for the program must be prorated to determine the costs for an academic year. Also, because Miranda is attending less than half time, the COA can't include all components: CREDIT HOUR COSTS: Tuition and Fees $1,800 Books and Supplies $100 ------------------------------------------------ TOTAL $1,900 WEEKS COSTS Transportation $100 900 clock hours Credit in academic year hour $1,900 X --------------- = $2,631 costs 650 clock hours for program 30 weeks instructional Week time in academic year costs $100 X ------------------- = $107 28 weeks instructional time in program Miranda's COA is the sum of these prorated costs: $2,631 + $107 = $2,738 STEP 3: Determine Annual Award Based on a COA of $2,738 and an EFC of 0, the full-time Payment Schedule shows that Miranda is eligible for an annual award of $2,340. STEP 4: Determine Payment Periods Miranda's program is a nonterm program; therefore, Waltman must establish the payment periods. Because the program is shorter than an academic year, it must have at least two equal payment periods. The school chooses to have two payment periods. Each payment period is the period of time in which the student completes 325 clock hours (half the hours in the program). STEP 5: Calculate Payment for a Payment Period To calculate Miranda's payment, the school uses the following calculations: 27 weeks instructional time for program $2,340 X -------------------- = $2,106 30 weeks instructional time in the academic year 325 clock hours in payment period $2,106 X ---------------- = $760.50 900 clock hours in the academic year Miranda's payment for the first payment period will be $761 (rounded up from $760.50). She may receive this payment when she begins the program. Her payment for the second payment period will also be $760 (rounded down because the first payment was rounded up); she may receive this payment after she completes the 325 clock hours in the first payment period. Because she is enrolled for only 10 clock hours a week, she will not receive her second payment until she has completed more than 32 weeks. EXAMPLE 8-Ivers Community College (Term, credit-hour program; 36 weeks of instructional time; summer term alternate calculation) BACKGROUND Kevin enrolls in a two year associate degree program at Ivers Community College. The academic calendar for this program uses quarters. There are three quarters in the fall through spring terms; each provides 9 weeks of instructional time. The terms do not overlap. Ivers defines full-time enrollment as 12 quarter hours per term. Ivers could use Formula 2 to calculate Pells for students in the program. However, the program also has a summer quarter which provides 9 weeks of instructional time. Ivers decides to use the alternate calculation for this program. Ivers must use this calculation for all students in the program, even if they do not attend the summer quarter. The definition of academic year must include the weeks of the summer term; in addition, Ivers may, if it chooses, include credit hours for the summer term in the academic year definition. The school defines academic year for Kevin's program as 48 quarter hours and 36 weeks of instructional time. Kevin enrolls for 6 quarter hours in each of the four quarters in the 1995-96 award year; his EFC is 300. The average costs for a full- time student for a full academic year (including the summer quarter) are as follows: Tuition and Fees $1,920 Books and Supplies $200 Room and Board $2,500 Transportation $240 Misc. Expenses $240 Loan Fees $100 ------------------------------------------------- TOTAL $5,200 STEP 1: Determine Enrollment Status Kevin is attending half time (6 quarter hours) in each term. STEP 2: Calculate Pell COA Because the four terms provide the same number of weeks of instructional time as an academic year, the full-time, full year cost above is the Pell COA. Kevin's COA is $5,200. Note that if the school had determined average costs based only on the fall through spring terms it would have to add summer costs to those costs to determine the COA. STEP 3: Determine Annual Award Based on a COA of $5,200 and an EFC of 300, the half-time Disbursement Schedule shows that Kevin is eligible for an annual award of $1,045. STEP 4: Determine Payment Periods Because the program uses terms, the payment period is the term. STEP 5: Calculate Payment for a Payment Period The school uses the alternate calculation to determine Kevin's payment for a payment period. It divides the annual award by the number of terms in the award year: $1,045 / 4 = $262.25 Kevin will receive $262 (rounded down from $262.25) in the fall and spring quarters; he will receive $263 (rounded up because other payments are rounded down) in the winter and summer quarters. [[Formula 2]] If the school did not use the alternate calculation, and calculated payments using Formula 2, it would have to adjust the COA, although this would not affect Kevin's annual award. Using the same annual award, the school would calculate Kevin's payment using the following calculation: 27 weeks instructional time in fall through spring terms $1,045 X ------------------------- = $940.50 30 weeks instructional time in academic year definition Ivers would then divide this prorated annual award by 3 (because the program uses quarters) to determine Kevin's payment for the payment period: $940.50 / 3 = $313.50 Kevin would receive $314 for the fall and winter quarters (rounded up) and $313 for the spring quarter (rounded down because the first two were rounded up). If he attended the summer quarter, he would receive an additional $313 payment. EXAMPLE 9-Hart University (Term, credit-hour program; 30 weeks of instructional time; Summer mini-sessions) BACKGROUND Bruce enrolls part time at Hart University. In addition to fall and spring semesters, Hart University offers three summer mini-sessions. Each mini-session provides 5 weeks of instructional time. Hart can either combine the mini-sessions into a single payment period, or treat each session as a separate nonstandard term. Hart has combined the sessions into a single payment period providing 15 weeks of instructional time. Full-time enrollment in this period is defined as 12 semester hours. Hart can use Formula 1 to calculate payments for this summer session. Bruce enrolls for 3 semester hours in each of the three mini- sessions; her EFC is 772. The average costs for a full-time student for the fall through spring terms are as follows: Tuition and Fees $4,200 Books and Supplies $600 Room and Board $2,500 Transportation $450 Misc. Expenses $300 Loan Fees $120 ------------------------------------------------- TOTAL $8,170 STEP 1: Determine Enrollment Status Bruce is enrolled for 9 semester hours in the combined term (3 in each mini-session). Therefore, he is enrolled three-quarter time. STEP 2: Calculate Pell COA Because the fall through spring terms provide the same number of weeks of instructional time as an academic year, the cost given above for a full-time student is used for the Pell COA: $8,170. STEP 3: Determine Annual Award Based on a COA of $8,170 and an EFC of 772, the three-quarter- time Disbursement Schedule shows that Bruce is eligible for an annual award of $1,193. STEP 4: Determine Payment Periods Because the program uses terms, the payment period is the term. In this case, the payment period is the term created by combining the mini-sessions. STEP 5: Calculate Payment for a Payment Period To calculate Bruce's payment, the school divides the annual award by the number of terms in the academic year: $1,193 / 2 = $596.50 Bruce may receive $597 for the combined summer session. However, suppose Bruce had also enrolled three-quarter time in the fall and spring semesters. He would have received a total of $1,193 for these two terms. If this amount is subtracted from his Scheduled Award ($1,590), only $397 remains. Therefore, if Bruce had enrolled in both semesters, he would only receive $397 for the combined mini-session. [[Formula 3]] If Hart University did not combine the three mini-sessions, it would have to calculate Bruce's payments using Formula 3. Hart would have to determine Bruce's enrollment status by multiplying full-time enrollment for the academic year (24 semester hours) by the number of weeks of instructional time in the term (5) over the number of weeks in the year. For the 5 week terms, a full-time student must enroll in 4 semester hours to be full-time; therefore, Bruce is still enrolled three-quarter-time. The COA would not have to be adjusted, and his annual award would remain the same. Hart would determine his payment using the following calculation: 5 weeks instructional time in the term $1,193 X ---------------------- = $198.83 30 weeks instructional time in the academic year Bruce would receive $199 for the first two mini-sessions, and $198 for the third mini-session, for a total of $596 for the summer. TWO MATHEMATICAL NOTES 1. When making disbursements, you must round to the nearest dollar. Round up if the decimal is .50 or higher; round down if it is less than .50. For instance, if a calculation resulted in a payment of $516.66, round up to $517. If the calculation result was $516.33, round down to $516. For a student who is expected to be enrolled for more than one payment period in the award year, you must alternate rounding up and rounding down to ensure that the student receives the correct amount for the year. For example, if a student had a Scheduled Award of $1,025 to be paid in two payment periods, the first payment would be $513 (rounded up from $512.50), and the second payment would be $512 (rounded down to ensure that the student is not overpaid for the year). The same principle applies when there are three or more payment periods in the award year. For instance, if the student has a Scheduled Award of $1,100 and enrolls at a school using quarter terms, the payment for each term would come to $366.66. The first two payments would be rounded up to $367, and the last payment would be rounded down to $366 to reach the total of $1,100. 2. When using fractions, you must be careful to multiply first, and then divide, or you may create an overpayment. For example, if you are calculating the payment in a program that has three payment periods of 300 hours each, you should use the method in this example: 300 (hours in payment period) $2,130 X --------------------------- (scheduled 900 (hours in academic year) award) Step 1: $2,130 X 300 = 639,000 Step 2: 639,000 / 900 = $710 (In THIS case, you can simplify this calculation by reducing the fraction 300/900 to 1/3 and get the same result. But, if you divide the fraction to get a decimal [300/900=.333333...] and then round the decimal either down [.33] or up [.34], your calculation will produce either an underpayment [$703] or an over payment [$724].) *3* See "Basic Concepts" earlier in this section for the definition of standard and nonstandard terms. *4* Note that prorating the COA will not affect the amount of Pell the student receives unless the proration reduces the cost below $2,340 or raises it above $2,340. However, you must enter accurate amounts when reporting disbursements. See Section Seven. *5* Not available for all student/programs. See Chapter Two, page 2-45ff. *6*The tuition charge may include any additional amount changed to "out-of-state" or "out-of-district" students. (Schools that use average charges are not required to develop a separate average charge based on residency, though this is certainly permissible and often desireable.) Note that you cannot simply add the full-time charge of an in-state student to the full-time charge of an out-of-state student and divide the sum by two to find an average tuition and fees component for these students. The result would be tuition and fees too high for some students and too low for others. Instead, you must use a weighted average tuition and fees for all students. For example, a school that had 100 students, 90 in-state and 10 out-of-state, should use the following calculations: 90 x in-state charge = X 10 x out-of-state charge = Y Total = Z Z/100 = weighted average tuition and fees *7* The Payment and Disbursement Schedules are mailed to all participating schools in the winter before the award year begins. Many schools and services have programmed the Schedules, using the Department's specifications, for use on microcomputers or mainframes. *8* There is one exception: If more than six months of the payment period occurs in a given award year, the Pell payment must be made from that award year. |