On Nov. 1 the Department of Education issued a Final Rule on the Student Assistance General Provisions that included the Academic Competitiveness Grant (ACG) and National Science & Mathematics Access to Retain Talent (SMART) Grant programs. NASFAA is discussing some of the implications of these rules with the Department. As we learn more information over the coming days, we will publish articles in Today's News to inform NASFAA members of what we have learned.
In this article we examine the final rules issued by the Department on two issues: prior enrollment in a postsecondary program and Federal Pell Grant eligibility.
Prior Enrollment In A Postsecondary Program
In response to interim final regulations published on July 3rd 2006, the Department received several comments regarding a student's ACG eligibility if the student were enrolled concurrently in secondary and postsecondary courses.
Section 691.15(b)(1)(ii)(B) of the interim final regulations stated that a student would not be eligible for an ACG in the student's first academic year if the student previously enrolled as a regular student in a program of undergraduate education. Commenters pointed out that several state and local programs allow high school students to enroll concurrently in college courses while completing their secondary education. These commenters questioned whether a student who had taken postsecondary classes while in high school would be eligible for a first-year ACG if they had not attained enough credits to be considered a second-year student by the time they had finished high school and began college.
Additionally, one commenter asked whether a student who earned an associate's degree at the same time as a high school diploma would be eligible for a second-year ACG if the student was still considered a second-year student at an institution that did not fully accept all of the student's previous college credits.
Final Rule: A student is not eligible for a first-year ACG if the student was previously enrolled as a regular student in an eligible program. A regular student would be any person who was enrolled or accepted for enrollment at a postsecondary institution for the purpose of obtaining a degree, certificate, or other recognized postsecondary educational credential offered by that institution.
Therefore, a student who took college courses but not as a regular student while still enrolled in high school can be considered for a first year ACG upon enrolling in an eligible postsecondary program as a regular student after the student has completed high school.
On the other hand, any student who was enrolled in an eligible institution as a regular student while in high school would be ineligible for a first-year ACG. That same student however, could be eligible for a second-year ACG once he or she completes his or her first academic year. Please note that the academic year applicable for grant level progression is the Title IV definition of academic year.
Federal Pell Grant Eligibility
Several commenters objected to the Department's interpretation that to be eligible for an ACG or National SMART Grant disbursement, students must receive a Federal Pell Grant disbursement for the same payment period. Many felt that the interpretation "arbitrarily denied a Federal entitlement to otherwise eligible students."
The interpretation that students receive their ACG/National SMART Grant disbursement in the same payment period as their Pell Grant disbursement would have been especially problematic for students who attend college year-round and thus may exhaust their Pell Grant eligibility but still have remaining eligibility for an ACG / National SMART Grant.
For example, students who receive outside assistance that limits their ACG/National SMART Grant funds early in the year, could be left wanting in the summer months when their outside aid expired or dwindled. Under the interim rules, those students would have remaining ACG/National SMART Grant eligibility, but would be unable to receive it if they had used their entire Pell Grant eligibility during payment periods earlier in the award year.
Final Rule: The Department changed Section 691.15(a)(2) - as well as all other corresponding sections of the regulations - to require that a student receive a Federal Pell Grant in the same award year that he or she receives an ACG / National SMART Grant, as opposed to in the same payment period.
Therefore a student who receives 100% of his or her total Pell Grant for both the fall and spring semesters may receive an ACG or National SMART Grant during a summer term assigned to the same award year without having to receive a Pell Grant during that summer term. The student has already established his or her Pell Grant eligibility during the preceding fall and spring semesters of that award year.
It is NASFAA's understanding that this new rule also encompasses students who receive their Pell Grant at another institution prior to transferring during the award year.
For example, suppose a student receives 100% of his or her Pell Grant funds at one school during the fall and spring semesters. The student then transfers to a different school in the summer. If the new school considers the summer semester as a trailer to the previous award year, the otherwise eligible student would qualify for any remaining ACG / National SMART Grant funds not used at the previous school because the student would have already received Pell at the other school.
Additionally, if that same student had progressed to the next academic year at the new school, the student could receive ACG / National SMART Grant funds based on the new academic year even though the summer could be considered part of the last award year.
By Justin Draeger
NASFAA Assistant Director for Communications
Posted November 8, 2006 on www.NASFAA.org, the Web Site of the
National Association of Student Financial Aid Administrators (NASFAA).
Copyright 2006. Redistribution to non-NASFAA institutions is prohibited
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