ED Plans to Issue Guidance on Changes to Pell Lifetime Limit
In correspondence from the Department of Education (ED) to NASFAA on recent changes to the provision that limits the duration of a student’s Pell Grant eligibility, ED acknowledged the concerns of NASFAA members and outlined plans to address them.
In the fiscal year (FY) 2012 budget, Congress amended statutory language to reduce the duration of a student’s eligibility to receive a Federal Pell Grant from 18 semesters (or its equivalent) to 12 semesters (or its equivalent). The change applies to all Federal Pell Grant eligible students effective with the 2012-13 award year. Because processing for the 2012-13 year has already begun, some students risk losing all or a portion of their Pell Grant even after being told they qualify by the Department and their school. If the determination that a student has exceeded the new lifetime Pell limit is made after the student has already received more Pell funds (when, for example, additional prior disbursement information comes in to the Common Origination and Disbursement system), the student could face an unanticipated outstanding balance or other financial hardship. In such a case, the institution would have made the disbursement that exceeded the limit in good faith, and the student would likely have accepted the funds believing him- or herself eligible.
In response to NASFAA’s inquiry on the matter, Federal Student Aid Chief Operating Officer James Runcie reiterated ED’s long-standing policy that institutions are only liable for an award made to an ineligible student if the institution knew, or should have known, that the student was not eligible. NASFAA’s inquiry requested that students also not be held liable, i.e. repayment not be required from students who receive additional Pell funds before a determination that a student has exceeded the lifetime Pell limit. However, ED’s letter did not address student liability.
Though FSA has provided some guidance in recent months, NASFAA had requested that FSA provide more details to address potential scenarios and variables. In the letter, FSA said it plans to provide "additional guidance to institutions in forthcoming communications that will include specific information regarding institutional responsibility to ensure compliance with the statutory change."
Related Guidance:
Other Concerns Over Federal Student Aid Changes
Recent changes to the student aid programs have raised a host of issues and questions at financial aid offices across the country. NASFAA has been collecting these issues and questions from members and delivered them directly to the Under Secretary's office at the U.S. Department of Education. At the specific request of Congress, NASFAA has also been keeping lawmakers informed of these outstanding issues, some of which are causing serious frustration for families and schools.
NASFAA continues to work with the Department to secure and disseminate official answers.