EnterChapterTitle: Federal Pell Grant Program
SectionTitle: Reporting Disbursements
This section explains how to report Pell payments to the Department
through the Federal Pell Grant Recipient and Financial Management
System (PGRFMS) and how this reporting system affects the
Questions about a school's Pell account (obligations) should be
Institutional Financial Management Division
Accounting and Financial Management Service
(202) 708-9807; fax: (202) 401-0387
Questions about Pell Grant systems (including EDE, RDE, or Floppy
Disk processing) or ADP services pertaining to these media should
be directed to
Pell Grant Hotline
Schools may also contact the Institutional Access System (IAS) at 1-
800-4PGRANT (1-800-474-7268) for general Pell payment
information, such as the school's current authorization and the status
of batches, and to request specific Pell data and documents.
The authorization for a school is the maximum amount the school
may draw down from the ED Payment Management System
(ED/PMS). At the beginning of each award year, a school is given an
initial authorization based on an estimate of the Pell funds the school
will need to cover its first payments. As the award year progresses,
the authorization for the school will be adjusted based on the actual
number of eligible Pell recipients the school reports to the PGRFMS.
The PGRFMS establishes the school's initial authorization and
notifies the school of the authorization. As the school reports
disbursements through RDE, EDE, or Floppy Disk Data Exchange,
PGRFMS makes any necessary adjustments to the authorization, and
notifies ED/PMS so that funds will be available to the school. The
PGRFMS enables the Department to track a school's need for funds
as the award year progresses and adjust the school's authorization on
that basis. The system also provides documentation to the school for
reconciling the school's records of total expenditures with the
Department's records of eligible students paid by the school. (This
documentation is the Student Payment Summary--see page 4-87.)
The Pell funds that the school reports to ED/PMS as expended must
equal the total payments to eligible Pell recipients at the school, as
shown by the records for each student.
There are three different methods a school may use to report
payment information to the Department. Schools can no longer
report payments by mailing paper documents (SAR Payment
Vouchers and the Institutional Payment Summary). Schools must use
one of the three automated methods. Information describing these
methods is provided to schools through "User's Guides."
[[Electronic Data Exchange]]
The most widely used automated method is the Electronic Data
Exchange (EDE), Electronic Payments Service, which allows schools
or their service agents to use the school's computers to enter and
transmit initial payment data and changes to previously reported
payment data. The Department supplies personal computer software.
Information is transmitted electronically by telephone line to a
communications network, which in turn transmits the information to
PGRFMS, thus greatly speeding up the reporting and response time.
[[Recipient Data Exchange]]
The second automated method, used especially by schools with large
numbers of recipients, is the Recipient Data Exchange (RDE). The
school mails a magnetic tape or cartridge to PGRFMS, which
processes the information and returns the processed data on tape or
cartridge, as the school requests.
[[Floppy Disk Data Exchange]]
The third automated method is the Floppy Disk Data Exchange,
which permits schools to submit payment information on
microcomputer diskettes. Schools using this method submit Payment
Data batches on either 5 1/4" or 3 1/2" diskettes.
All three methods transmit the same basic student information. The
only difference is the way in which the information is sent: by
magnetic tape/cartridge, by telephone line, or by diskette. As
mentioned earlier, each school receives a "User's Guide" containing
detailed information on the automated system used by that school. In
the rest of this section, we will provide a general description of the
data reporting process. Schools should refer to the appropriate
"User's Guide" for specific information about the records used.
[[The "Payment Data Processing Path" flowchart on page 4-77 is
currently unavailable for viewing. Please reference your paper
document for additional information.]]
Payment Data is the term used to refer to the electronic or magnetic
payment record used in reporting Pell payments. The record contains
the student's EFC, COA, enrollment status, and disbursement
information. After the school receives an output document, the
school completes the Payment Data by filling in award information.
The school periodically sends Payment Data for its students to
PGRFMS in a batch, along with the Institutional Payment Record.
The Institutional Payment Record establishes certain basic
demographic information about a school, and accompanies each
batch of Payment Data/Processed Payment Data that schools submit
to PGRFMS during the award year, summarizing the information
about the data in that batch.
[[One record per Pell recipient]]
Carefully completing the Payment Data ensures that the school's Pell
expenditures are accurately reported, which in turn smooths the
process of acquiring additional funds, if necessary. A school must
submit at least one acceptable record for each Pell recipient at the
school. When a school receives a revised output document that it
accepts as valid for payment, it should submit the new Payment Data
record with its next batch. PGRFMS's award data processing system
will only accept one award per recipient per attended campus.
PGRFMS will AUTOMATICALLY replace the previously accepted
award data with the data reported in the revised Payment Data
record. Therefore, the school should not submit the Processed
Payment Data record corresponding to the original Payment Data
record in an effort to reduce the student's previously accepted award
amount to $0.
SPECIFIC PAYMENT DATA ITEMS
The academic year categories are defined as follows:
CREDIT HOUR (NONSTANDARD TERM). The school uses
nonstandard academic terms but measures progress by credit hours
QUARTER. The school uses standard term quarters and measures
academic progress by quarter hours.
SEMESTER. The school uses standard term semesters and
measures academic progress by semester hours.
TRIMESTER. The school uses standard term trimesters and
measures academic progress by semester or trimester hours.
CLOCK HOUR. The school measures academic progress by clock
CREDIT HOUR WITHOUT TERMS. The school does not use
terms, and measures academic progress by credit hours.
This item must be completed. If this item is blank, and the student
was selected for verification by the CPS, PGRFMS assumes the
student was paid under "W" ("Without documentation"). Payment
will be limited to one-half of the student's Scheduled Award until the
"W" is corrected. In addition, the school's Pell authorization will be
reduced to $0 during the final review of its account for all students
whose status is still "W" at the end of the award year.
The financial aid administrator should enter "S" ("Selected, not
verified") when the student has been selected for verification, but the
school does not verify that student's information because it has
reached the 30% verification limit or because it participates in the
Title IV Quality Assurance Program.
Note that Payment Data resulting from a first transaction
(Transaction 01) will be rejected if "R" ("Reprocessed") is entered.
See The Verification Guide for further explanation of the status
codes and the 30% verification limit.
Term Programs Only (enrollment status)
Complete this item only if the academic calendar uses terms
(standard or nonstandard). The enrollment status code "Other" is
used when the student's enrollment status is "mixed"--for instance,
when a student attends full time one term and half time the next, or
when the student attends an additional (optional) term within the
award year. An example would be a student attending both semesters
of the regular academic year as a half-time student and then also
attending a summer term as a half-time student.
Clock Hour Programs, or Credit Hour Programs without Terms
There are two items under this heading, "Hours/credits expected to
complete" and "Hours/Credits in program's academic year
definition". These items are completed only for clock-hour or
nonterm credit-hour programs. For the first item, report the hours or
credits the student is expected to complete in all payment periods
occurring in the current award year. If the school is paying the
student in the current award year for payment periods that are in
progress or are already completed, it must be sure to include those
payment periods in this total. The student cannot be paid for more
than one academic year of work in one award year.
For the second item, the hours or credits reported must be at least the
minimum hours or credits specified in the regulations (900 clock
hours, 24 semester hours, or 36 quarter hours, for example.)
Term and Nonterm Programs not Using Formula 1
The two items under this heading, "Weeks used to calculate
payment" and "Weeks in program's academic year" are used by
programs not calculating Pell awards using Formula 1. (See Section
2 of this chapter for more information about the formulas.) For the
first item, for term-based, credit-hour programs (programs using
Formulas 2, 3, or 5B), enter the total number of weeks of
instructional time in all payment periods in the current award year in
which the student will be enrolled and paid.*1* For programs using
Formula 4, enter the number of weeks of instructional time required
for MOST full-time students to complete the hours in the program or
academic year, whichever is less. For programs using Formula 5A,
enter the number of weeks of instructional time for a student to
complete the hours in the program or academic year, whichever is
less. Note that the weeks of instructional time might not be the same
as the number of calendar weeks (see Chapter 3 for more
For the second item, the number of weeks must be at least the
minimum specified in the regulations (30 weeks of instructional time
unless the school has received a waiver from the Department).
All Programs (Payment Methodology)
In this item, select the formula used to calculate the student's award.
Amount Paid to Date
Enter the actual amount the school has paid the student (either by
check or credit to the account) as of the date the Payment Data
record is completed. If the school has not yet paid the student but
needs to submit the Payment Data, the financial aid administrator
should report "0" for payment.
Remaining Amount to Be Paid
The financial aid administrator should enter the amount the school
expects to pay the student for the remainder of the award year. This
amount should take into account the student's expected enrollment
status. For instance, if the student is receiving a $600 Pell
disbursement as a full-time student in the first of two payment
periods but is expected to drop to half time in the second payment
period, the "remaining amount to be paid" would be $300. If the
school has entered $0 for "amount paid to date" because it has not
yet paid the student for the first payment period, then the "remaining
amount to be paid" for the student in this example would be $900.
The school must report "0" for this item if it expects to make no
further payments to the student for the award year. The item must not
be left blank. Note that if a school reports an amount in this item for
a student who has transferred to another school, payments to the
student by the new school may be prevented or delayed. If the value
is greater than "0," then the school must specify the months in which
the remaining amounts will be paid.
Months In Which Remaining Payments Will Be Made
If the school has students who will be attending a crossover payment
period at the end of the award year, and they will be paid in June,
July, or August from this award year's funds, the financial aid
administrator should enter the appropriate months in which
remaining payments will be made.
Summer School and Other Crossover Payment Periods:
If a school uses 1997-98 funds to pay a student enrolled in a
crossover payment period in the summer of 1997, the school
should prepare the Payment Data and submit it in the first batch
for this award year.
If the school plans to pay a student out of 1997-98 funds for a
summer 1998 payment period, generally it will be to the school's
advantage not to notify ED of the payment for next summer until
it is reasonably certain that the student will attend. It is
recommended that the school not notify ED until at least January
1998. This will save the school effort, as it will have to resubmit
Processed Payment Data for all students who were expected to
attend the summer payment period but later decided not to attend.
Date Enrolled This Award Year
Enter the first date the student was enrolled in the eligible program
for this award year. (For this item, "enrolled" means the first day the
student attended classes.) If the student enrolled in a crossover
payment period before the first day of the award year (July 1), report
the actual date enrolled for this item, even though that date occurs
before the start of the award year.
Schools must report any Pell change (for example, a new recipient,
or an increased award) within 30 days of the date the school becomes
aware of the change. Schools may do this by reporting once every 30
calendar days (or more frequently), or may set up their own system
to ensure that changes are reported in a timely manner. For example,
a school may decide to report every other Friday on all changes since
the last report, or a highly automated school may set up a program to
check the records daily for changes and report the changes the same
Reporting deadline example
On September 4, Woodhouse College determines that a Pell award
it has previously reported to the Department must be reduced. On
September 12, it pays five new recipients and determines that it
must increase the amount it reported for another student's award.
October 4 is 30 days after September 4, so Woodhouse must
report the downward adjustment by that date. On October 4, the
school bundles the September 4 and September 12 payments and
adjustments and submits a report. Woodhouse could also have
waited until October 12 to report the changes from September 12.
On October 17, Woodhouse pays another new student and
learns that a student for whom it reported an expected spring
disbursement will not be attending the spring semester.
November 16 is 30 days after October 17. Therefore,
November 16 is the deadline by which Woodhouse must report the
new payment made on October 17 and the adjustment to zero for
the spring term payment.
If a school does not report any payment data for a period of 30 or
more calendar days, the Department will consider that the school had
no data to report for that period, and any actions (such as changes in
authorization levels) will be based only on the data reported to that
A school may submit a Payment Data batch more frequently than
once every 30 days if there are enough Payment Data to warrant a
separate submission. Schools may submit an unlimited number of
batches. Note that all Payment Data for an award year must be
submitted by September 30 following the end of the award year (for
example, September 30, 1998 for the 1997-98 award year). A school
may need to submit a batch of Payment Data after the end of the
award year to report summer school payments, students who need
verification completed, or outstanding payment data changes. The
school must be sure that it submits this data before September 30.
[[Adjustments after September 30]]
Adjustments can be made to a school's Pell account after September
30 only if there is an underpayment or overpayment of previously
reported awards, or if the U.S. Department of Education or one of its
contractors has made a processing error. A school can also request
administrative relief for unusual circumstances beyond the school's
control--for example, a natural disaster. These requests must be made
in writing and must be received by January 31 of the calendar year
following the award year (for example, by January 31, 1999 for the
1997-98 award year). Requests for such actions should be sent to
U.S. Department of Education
Institutional Financial Management Division, AFMS
P.O. Box 23791
Washington, D.C. 20026-0791
If you have questions about administrative relief, contact the
Institutional Financial Management Division, Accounting and
Financial Management Service at (202) 708-9807 or by fax at (202)
[[Late adjustments due to program review or audit--34 CFR
In certain circumstances a school can receive reimbursement even if
it did not submit correct Payment Data for a student before the
submission deadline. The Department must reimburse a school for
funds found to be owed to the school during a audit conducted after
December 31, 1988--including funds for which reimbursement was
not requested before the audit. In order to receive reimbursement
under this provision, the school must demonstrate that it qualifies
based on a finding in the school's first required compliance audit of
the award year; the audit report must have been submitted by the
appropriate deadline. (See Chapter 3 for more information about
audit requirements and deadlines). The finding does not need to
establish the exact amount of the adjustment but must establish that
the school paid Pell awards for which it was not reimbursed by the
Department. "Dear Colleague" Letter GEN 94-14, dated April 1994,
explains the procedures and format that a school should use in
requesting this adjustment.
A school may also receive reimbursement if it submitted Payment
Data for a student before the deadline, but did not submit the correct
Payment Data for that student. In order to receive reimbursement, the
underpayment must be at least $100, and a program review must
show that the student was eligible to receive more than the school
Note that the final deadline (published in the Federal Register each
award year) for submitting Payment Data and disbursement
information will continue to apply. A school that misses the
regulatory deadline would not be in compliance with Federal Pell
Grant Program requirements.
[[Adjustments due to overpayments]]
Adjusting for an overpayment is permitted any time the school
determines that a student for whom Payment Data had been accepted
by PGRFMS received more Pell funds than he or she was qualified
to receive. The school must report the reduction to the proper amount
whether or not it can collect the overpayment from the student,
unless the school was not liable for the overpayment; in that case, the
school reports the amount to the Debt Collection Service, Student
Receivables Division, (202) 708-4766.
PROCESSED PAYMENT DATA
PGRFMS processes the Payment Data and returns Processed
Payment Data to the school. The Processed Payment Data will be an
electronic or magnetic record. The information that the school
originally provided in its Payment Data is included in the Processed
Payment Data. Comments about the data--what data PGRFMS has
accepted or rejected, for example--are also included in the Processed
Payment Data, as are the data accepted by PGRFMS. The school will
also receive a summary of the data in the batch. Schools review the
Processed Payment Data and return any corrections with their next
Note: A school may request replacement data for a batch or year-to-
date data on tape, floppy diskette, or electronically by contacting the
IAS at 1-800-4PGRANT (1-800-474-7268). The school may also
mail its request to
Federal Pell Grant Program
P.O. Box 10800
Herndon, VA 22070-7009
Each record the school submitted will be placed in one of four
categories. The summary indicates how many records in the batch
were in each category. The categories are
REJECTED. The information is inconsistent. The school must
correct these records before resubmitting them.
ACCEPTED WITH ASSUMPTIONS. The information was
incomplete, so the system made certain assumptions. The school
should review the Processed Payment Data carefully and resubmit
if corrections are necessary.
DUPLICATES. These are duplicates of previously ACCEPTED
records and thus are not counted in the "total amount paid to date"
or the "remaining amount to be paid" in the batch summary. The
school should keep these records in its files. They need not be
resubmitted unless the award year data changes.
ACCEPTED. The school should keep these records in its files.
The school does not need to resubmit them unless the award year
Schools should check records rejected because the SSN was invalid
or did not match; in many cases, this indicates that the student is not
in the Pell database. This may occur if an eligible student has
incorrectly reported having a bachelor's degree or being enrolled as a
graduate student. The school must correct (or have the student
correct) the incorrect information before it can receive any payment
for the student from the Department.
The school should review the Processed Payment Data carefully. If,
after reviewing the information in the Processed Payment Data and
the instructions in the appropriate "User's Guide" on correct
reporting procedures, the financial aid administrator still cannot
determine why the award data submitted for a student did not result
in the expected processed data, he or she should contact the Pell
Grant Hotline at (202) 708-9141.
The first three items on the batch summary provide information
about the Payment Data the school submitted. Items 1 and 2 tell how
many records the Federal Pell Grant Program received and how they
were processed (for example, accepted or rejected). Item 3 is the
total amount paid to date for all the students in that batch (from the
total of amounts in "Amount Paid to Date" on each record). Note that
the Department's count in Items 1 and 3 should agree with the
amounts the school reported when it submitted the batch.
The last three items show how the data were adjusted for any records
that were rejected, accepted with assumptions, etc. The adjustments
made (Item 5e) are subtracted from the total payments for the
students in that batch (Item 4). The result (Item 6) is the net change
to the accepted student payment as a result of the particular batch.
If the Processed Payment Data the school has received are accurate
and there are no changes to the students' awards, the school must
simply retain these records in its files. However, if the information
for any student is wrong or changes during the award year, the
school may have to correct the Processed Payment Data and resubmit
it with the school's next batch. See the appropriate "User's Guides"
for information on correcting Processed Payment Data.
The most frequently required changes are to COA,*2* verification
status (to update a "W"--payment without documentation),
enrollment status (term schools), and payment amounts and dates.
Other changes occur less frequently, except in cases of error. For
instance, one would not expect the school's academic calendar to
change during the award year.
Some corrections do not affect the student's award and need not be
reported to the Department:
ACADEMIC CALENDAR. The school does not have to report a
change from one type of standard academic term to another (for
example, from a quarter system to a semester system). Other
calendar changes (for example, from a credit-hour to a clock-hour
calendar) must be reported.
COST OF ATTENDANCE. The school does not have to report a
change that does not increase or decrease the amount the student
will be paid for the year.
VERIFICATION STATUS. If the verification status accepted by
the Federal Pell Grant Program for the student was N, A, T, C, R,
or S, the school does not have to report a change to that status. IF
THE STUDENT'S STATUS WAS "W," THE SCHOOL MUST
REPORT A CHANGE TO THAT STATUS ONCE IT RECEIVES
FULL DOCUMENTATION FROM THE STUDENT AND
ENROLLMENT STATUS. The school does not have to report a
change to enrollment status that does not increase the amount the
student will be paid for the year. It will have to report a change in
enrollment status if a student attends for a longer period than
expected and the result is a greater award. For example, if a three-
quarter-time student decides to attend summer school as a three-
quarter-time student, the school must change ENROLLMENT
STATUS to "Other" at the same time it reports the larger award
amount. If the school leaves the student's status as three-quarter
time, PGRFMS assumes that the student's three-quarter-time
award is being exceeded, and the larger award amount will not be
put on file for the student.
HOURS/CREDITS EXPECTED TO COMPLETE, WEEKS USED.
The school does not have to report a change to these items if the
change does not increase the amount the student will be paid for
HOURS/CREDITS IN ACADEMIC YEAR, WEEKS IN ACADEMIC YEAR.
The school reports a change to these items only if it is
redefining its academic year. (For example, the school decides to
change its 32-week academic year to 30 weeks.)
MONTHS IN WHICH REMAINING PAYMENTS WILL BE
MADE. The school does not have to report changes to this item.
However, we encourage schools to report changes if they apply to
a significant number of students, so that the school's funding can
be adjusted accordingly.
[[Reporting changes in anticipated payments]]
If the student's situation changes and the anticipated payments are
not made, the school MUST REPORT THIS CHANGE by
resubmitting the Processed Payment Data to PGRFMS. For instance,
a student may drop from full-time enrollment in one term to half-
time in the next, or may no longer be making satisfactory progress,
or simply may not return in the second payment period. In each of
these cases, the school must adjust the "Amount to be paid" item and
any other relevant items in the Processed Payment Data and return it
[[Schools must submit reports on time]]
Schools must submit Processed Payment Data, for those students
whose awards have changed, within 30 days after the date on which
the school becomes aware of the change. This requirement ensures
that federal funds will not remain at a school when its students do not
need the funds. It further ensures that if the student transfers to
another school, Pell payments to the student through the new school
will not be blocked. Schools that do not submit required reports or do
not submit them on time, and schools that submit incomplete reports,
will have their Pell allocation reduced and may be fined.
STUDENT PAYMENT SUMMARY
The "Student Payment Summary" (SPS) lists the student data in the
Department's records for each Pell recipient for whom the school
submitted Payment Data for the award year. The SPS enables the
school to check its records to determine if there are any additions and
changes to its student data that it needs to report to the Department,
or any corrections the school needs to make in its institutional
records. An SPS is routinely sent to each school for review at least
three times during the award year as well as at the end of the award
year. A school may also request an SPS during the award year
through the IAS at 1-800-4PGRANT (1-800-474-7268), or by
U.S. Department of Education
Application and Pell Processing Systems Division
P.O. Box 23791
Washington, D.C. 20026 3791
A financial aid administrator may also call the number given if he or
she has general questions about the school's SPS.
The SPS reflects each record for the award year (as of the date in the
upper right corner) that the Department either accepted or rejected
but retained in its records. The SPS EXCLUDES data that the
Department rejected and did not retain, as well as records the school
submitted that duplicated data already accepted.
Students are listed on the SPS in Pell Institution Number order by the
attended campus, then alphabetically by last name. The Department
provides summary statistics of all student activity at the end of each
attended campus and, for the entire institutional system, at the end of
Appendix B, beginning on page 4-101, gives an item-by-item
description of the SPS. Appendix C, beginning on page 4-109,
describes the circumstances under which the SPS may list some Pell
recipients more than once.
[[Comparing school records to SPS]]
The school should use its SPS to confirm that the Department has
received and accepted student payment data for all the Pell recipients
the school has paid, up through the date in the upper right corner of
the SPS. The school should compare institutional student records to
the SPS to confirm that each Pell recipient appears at least once. If
students are missing from the SPS, the school needs to report them to
the Department IMMEDIATELY. A school should account for each
missing student in one of the following three categories:
[[Students missing from SPS]]
1. The school submitted the student's record to the Department, but
it was rejected due to reporting errors--the batch summary shows
the number of rejected records for each batch submission.
2. The school submitted the student's record, but the Department
did not receive it--the batch summary shows any discrepancies in
the number of records the school reported and the number
received for each submission.
3. The school has not yet submitted the student's record to the
Department, either inadvertently or for other reasons.
The school should review institutional student records to verify that
the payment to each Pell recipient agrees with the "Total Payment
Amount" the Department has accepted, as shown on the SPS. If the
school finds a difference, it needs to either report the revised
payment amount(s) to the Department or correct institutional records
for the student.
The school should use the Processed Payment Data as the
Department returns them to the school to reconcile institutional
records. If the school then uses the SPS as you would your checking
account monthly statement, it can verify that its records agree with
the Department's or identify the additions and/or changes it needs to
report in its next submission. The school reports additional Pell
recipients or payment amount changes through whatever medium it
normally uses (RDE, EDE, or Floppy Disk Data Exchange).
Remember that a school must report any changes in the Pell award
no later than 30 days after the date on which it becomes aware of the
[["W" verification status]]
The Summary Statistics page gives the school a count of any student
records with a verification status of "W" (Without documentation).
As mentioned in Section 4 of this chapter, a school may not make
more than one disbursement for a student selected for verification
until the student supplies documentation to verify or correct the
application data. Therefore, the Department will honor no more than
half of the student's Scheduled Award if the school reports, or the
Department assumes, a verification status of "W." The school and the
student must complete the verification process by the applicable
[[Must revise "W" status]]
As soon as the school completes verification, the school must submit
acceptable Payment Data to the Department, revising the student's
verification status and amount(s) that the Department accepted for
payment. The school should carefully review any student data on the
SPS with a verification status of "W" and complete its reporting
promptly. In early August, the Department will reduce the accepted
payment to $0 for any students whose verification status remains
"W" and will make a corresponding reduction in the school's Pell
authorization. After the verification deadline (August 31, 1998), the
Department will reject any student documents submitted to which a
"W" status applies.
The first summary page for the entire institutional system (at the end
of the SPS) lists the "Total Payment Amount (Item 6 + Item 7),"
summarized from the Processed Payment Data shown on the SPS.
The school should compare its institutional records to this amount.
Appendix D, beginning on page 4-113, describes the steps the school
should take to confirm that current institutional Pell payments agree
with the student payment data the school has reported. These steps
should assist the school in verifying that it has identified all
discrepancies between the Department's records and institutional
records, so that the school can report any payment data changes or
additional students. Differences generally result from two conditions:
1. The school has not yet reported all student payment data changes
and/or additional recipients.
2. The payment amount in institutional records exceeded the
amounts the Department could accept, based on the other data
reported for the student, and the Department disallowed the
excess. If the data on which the Department based the
disallowance properly reflect the student's award information, the
school must adjust institutional records to the correct payment
amount and recover any excess from the student.
If either of these conditions apply to the school, it needs to resolve
the inconsistencies promptly. The Department provides the SPS to
allow schools time to review it and submit payment data changes and
additional recipients (including any rejected student records) as soon
as possible. As mentioned earlier, a school must complete its
reporting of all changes and new recipients no later than 30 days
after the date the school becomes aware of the change or addition.
ADMINISTRATIVE COST ALLOWANCE
A school participating in the Federal Pell Grant Program is entitled to
an administrative cost allowance (ACA) to help offset the costs of
administering the program. The Department notifies the school of the
amount of its ACA by mail several times a year, and pays the school
automatically by EFT. A school receives $5 for each of its reported
Pell recipients. Students who later withdraw are included in the
number of recipients, as are transfer students, but those whose
payment data are rejected by the Department are not included. The
ACA must be used only to help pay the costs of administering the
Federal Pell Grant Program and the campus-based programs (see
Chapter 5). If the school enrolls a significant number of less-than-
full-time or independent students, it is required to use a reasonable
proportion of the ACA to assure that financial aid services are
available to those students.
The reporting system described in this section enables the
Department to track schools' need for Pell funds during the award
year and to adjust Pell authorizations accordingly. The system
ensures that federal funds do not remain at a school when its students
do not need them. When the school requests funds from the
Department (for the Pell, campus-based, or Direct Loan programs),
that request is handled by a different system, the ED Payment
Management System (ED/PMS).
[[Automated Clearing House (ACH)]]
The Department's Financial Payments Group uses a payment system
called the Automated Clearing House/Electronic Funds Transfer
(ACH/EFT). The ACH/EFT is essentially a direct deposit system.
Most postsecondary schools that participate in the SFA Programs are
now using the ACH/EFT. If you are responsible for your school's
fiscal office activities, you should refer to The ED Payment
Management System User's Manual, prepared by the Financial
Management Service, and to the current edition of the SFA Blue
A second method for requesting funds from ED/PMS is through
FEDWIRE. Under this method, requests for funds go directly to
ED/PMS. Most state institutions use FEDWIRE. See ED/PMS's
User's Manual mentioned above for further details.
*1* If a student will be enrolled and paid for the summer term in a
program using Formula 2, the school should consider the number of
weeks the student is enrolled in the summer term to be the number of
weeks in the fall through spring terms divided by the number of
terms in the fall through spring.
*2* Usually, only changes to costs of $2,700 or less will be reported,
as changes to costs above $2,700 will not affect the student's award.