HEAA: Democrats Propose Two Significant Changes for the Federal Pell Grant Program

 Reauthorization - Masthead  

By Joan Berkes, Policy & Federal Relations Staff 

Tom Harkin (D-IA), chairman of the Senate Committee on Health, Education, Labor and Pensions (HELP), introduced a comprehensive Higher Education Act reauthorization bill on June 25. The Higher Education Affordability Act (HEAA), which includes several provisions for which NASFAA has been advocating, takes the form of a discussion draft and marks the HELP Committee’s first step toward reauthorization of the Higher Education Act. This article is the second in a series that will examine various provisions proposed by this bill. 

The Harkin bill would reinstate year-round Pell Grants for students enrolled in extra payment periods within an award year in order to accelerate their degree program completion. The bill is intended to encourage and incentivize students to enroll and progress on a full-time basis; it is not intended for students who consistently enroll on a part-time basis to “catch up.” It would require a student to have successfully completed a full-time course load prior to receiving the additional Pell award. The total Pell dollars a student may receive in any award year under this provision is limited to 150 percent of the maximum Pell award for that year. Any extra payment periods attended (for which Pell is received) in an award year would still count towards the overall Pell lifetime limit (LEU).

The institution would determine what constitutes completion of a full-time course load. Although Title IV regulations have long set minimum requirements for the definition of full-time (at 668.2), the determination of full-time for a nonstandard term, including summer, may differ.  An institution may use the same Title IV definition for full-time in a shorter summer term as it uses in its regular term. In that case, an institution that uses the minimum of 12 semester credits would calculate eligibility (e.g., half-time status for loan eligibility and the Pell payment period award amount) in the same way it does during the regular academic year. A school that wants to use fewer than 12 credits to define full-time in a short session can currently do so in accordance with the Pell Grant regulations that pertain to nonstandard terms; the regulatory minimum is then determined in proportion to the length of the payment period relative to the definition of “academic year.”

A couple of issues arise for discussion as a result of full-time determinations. For example, a student begins the award year with a nonstandard summer term and enrolls for (and earns) 9 credits, which is considered full-time for that term. The student then earns 12 credits during the standard fall semester. Entering Spring term, he has 21 credits and has no Pell Grant remaining. Must he have earned an aggregate total of 24 credits to have successfully completed the equivalent of a full-time course load, or does the fact that he successfully completed the institution’s definition of full-time in the terms already attended (both summer and fall) qualify him for a second Pell award? The language could be read to allow this latter interpretation.

Now consider a student who begins the award year with the fall semester and enrolls three-quarter-time, earning only 9 credits. She completes 15 credits in the spring, so her aggregate total at the start of summer term is 24. Could the school consider her to have completed the equivalent of a full-time load? She would, in the aggregate, be accelerating by attending the extra term. She also has a small amount of Pell left since she was less than full-time. If she were deemed eligible for the second Pell, it is NASFAA’s understanding that the bill would not preclude combining the remaining funds from the first Pell with funds from the second Pell to pay the student’s full award. It is also our understanding that the full-time enrollment criterion does not apply to the extra term.

The bill would prohibit ED from dictating the award year to which a summer term that crosses over July 1 is assigned, so the institution would continue to have flexibility in making that assignment. Mandatory assignment of summer cross-over periods was part of the reason year-round Pell was so difficult to administer in its last iteration, before it was repealed. NASFAA has advocated heavily for institutional flexibility in determining crossover periods.

NASFAA’s reauthorization recommendations include a form of year-round Pell, but that recommendation specifically excludes any acceleration clause as well as any mandatory assignment of cross-over periods. Another recently introduced discussion draft bill, from Senators Lamar Alexander (R-TN) and Michael Bennet (D-CO)—tilted the Financial Aid Simplification and Transparency, or FAST, Act—would also restore year-round Pell, but allows students who need extra funding to receive a second Pell award (also limited to 150 percent of the annual maximum and also attributable to the lifetime limit total) in order to make up deficiencies in progress towards on-time completion. An earlier bill introduced by Senator Mazie Hirono (D-HI), the Pell Grant Protection Act, would also allow continuously enrolled students to receive more than one scheduled Pell Grant award in an award year, while still maintaining the 12-semester or equivalent limit. Students could draw from a “well” of Pell funds at their own pace, with no acceleration clause. That bill also gives institutions the discretion to determine the award year to which a summer crossover period would be assigned.

The Harkin discussion draft bill would also institute a new disclosure requirement for Pell Grant recipients. Under the discussion draft, institutions would have to notify Pell Grant recipients of their remaining period of eligibility, at least once a year to begin, and at least once a semester (or equivalent) once the student has two years or less of eligibility remaining. For Pell Grant recipients who are also Direct Loan (or FFELP) borrowers, the disclosure would have to be made as part of the annual notification and interim counseling requirement that the bill also proposes (more on that in a subsequent article).

More discussion regarding the notification of remaining eligibility by the institution (as opposed to such information being presented by ED on the student’s SAR) might be in order, especially if the school has less immediate access to accurate information than the school. Transfer students, especially, might benefit from such information provided by ED.  

Learn more about reauthorization of the HEA at http://www.nasfaa.org/reauth/. 

1 Comments

  • The balancing act of allowing opportunities for successful students to receive more aid to complete their degrees in a shorter-than-standard time period AND the pressure on institutions to make college more affordable gets increasingly difficult as more detailed restrictions on awarding aid are made. Senator Harkin's proposal that would require students to successfully complete a full time course load in order to receive an additional Pell Grant will add to an institution's expenses in personnel for explaining the "incentive" and for computer support to make sure it is accurate. The requirements for Satisfactory Academic Progress and the 600% Pell Lifetime Eligibility Used restriction provides enough oversight to ensure students are not misusing these funds.

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