ED Releases Guidance for Pell Grant Restoration

Posted Date: April 3, 2017

Author:  John Kane, Acting Service Director, Program Management, Federal Student Aid


Subject: Guidance on COD Processing of Pell Grant Restoration for Students who Attended Closed Schools

In a December 21, 2016 Electronic Announcement posted on the Information for Financial Aid Professionals (IFAP) website, we provided initial information about our plans to restore Federal Pell Grant (Pell Grant) eligibility for students who received a Pell Grant at a now-closed school. We also noted that we were modifying our systems to implement the restoration of Pell Grant eligibility.

In this announcement, we provide information about the changes made to the Common Origination and Disbursement (COD) System related to restoration of Pell Grant eligibility. The COD System implemented those changes during the period March 24-26, 2017.

Note: For information about other COD System changes implemented at the same time, refer to a March 16, 2017 Electronic Announcement.

COD System – Pell Grant LEU Closed School Restoration Adjustments

With the COD System changes now in place, we will begin to identify students who received a Pell Grant for attendance at a now-closed school and who were not reported to NSLDS as having “graduated” from that school. We will adjust those students’ Pell Grant Lifetime Eligibility Used (LEU) amount to remove the portion of the LEU attributable to the students’ attendance at a closed school. The Pell Grant LEU adjustment will be equivalent to the Pell Grant Eligibility Used (EU) at the closed school for each award year for which the student received Pell Grant funds. We will make one LEU adjustment per school, per award year. Important: Pell Grant LEU Closed School adjustments will not occur on a daily basis, but will be processed in batches after Federal Student Aid determines an official school closure date and verifies student data following the final school closeout.

Note: For auditing purposes, the Pell Grant adjustments will not be made to the Total Eligibility Used (TEU) percentages shown on the COD Web Site, but only to the LEU for each school for each year. However, if as a result of an adjustment, the student is eligible for additional funds for an award year (2016-2017 and forward), the COD System will allow the TEU to exceed 100.0000%. In such instances, a school would need to follow the procedure described below in the COD Web Site’s Pell LEU History Page Information section of this document.

School Notifications

When Pell Grant Closed School Restoration adjustments are made, schools will receive information about the adjustments in several ways:

    • Email Notification – We will send an email alerting schools that a Closed School Pell Restoration list is available on the COD Web Site’s File Share Communications page. The list will show all students who had their Pell Grant LEU adjusted and are associated with the school if, generally –
      • The student received any Title IV aid at the school during one or more of the five most recent award years; or
      • The school’s Federal School Code was included on the student’s highest ISIR transaction for the most recent of the last three FAFSA processing years for which the student submitted a FAFSA.

    • COD Web Site’s Pell LEU History Page Information – Schools will be able to view Pell Grant LEU Closed School Restoration adjustments on the COD Web Site’s Pell LEU History Page. Pell Grant LEU adjustments made due to closed school restoration will be noted as “Closed School Restoration” in the Adjustment Type field.

Note:  While the LEU is not award specific, the LEU adjustments are attributed to an individual award year. As noted above, Pell Grant adjustments will not be reflected in the TEU percentage for an award year, so an adjusted TEU for the current year will need to be calculated by the school. The adjusted TEU is calculated by subtracting the 2016-2017 Eligibility Used (EU) percentage(s) at the closed school(s) from the student’s 2016-2017 Pell Grant TEU, as displayed on the Person Pell Information screen.

For example, a student has 2016-2017 TEU of 100.0000% based on disbursements at three schools, as follows:

      • 25.2000% EU at School A, disbursed in May of 2016 for a cross-over summer term
      • 33.3333% EU at School B (closed school), disbursed in September 2016 for the fall term
      • 41.4670% EU at your school, disbursed in October 2016 for the fall term using the standard transfer student calculation for remaining eligibility

The student’s adjusted 2016-2017 TEU is 66.6667% (100.0000 minus the 33.3333 that was attributable to the closed school). Thus, the student would have 33.3333% eligibility remaining for the 2016-2017 Award Year, beyond the 41.4670% disbursed at your school. Submitting new 2016-2017 disbursements for this student, in what will appear to be in excess of the 100.0000% TEU, but within the additional 33.3333% eligibility, will not hit POP edits, and will be accepted by the COD System, providing the submission meets all other Pell Grant processing edits.

    • Search Functionality – Schools can search for a specific student’s Pell Grant LEU Adjustment under the Escalation Type Search screen on the COD Web Site by entering the student’s SSN and Date of Birth.

    • COD Warning Edit 221 (Pell LEU Restoration Due to Closed School) – We will return COD Warning Edit 221 when a student has received a Pell Grant LEU Closed School Restoration Adjustment.  This COD Warning Edit 221 will be returned at the Student level <SSN> during origination or maintenance for any award type for a student who meets all of the following criteria:

 

      • Has a Pell LEU Closed School Restoration Adjustment of greater than 0;
      • Has an existing Pell Grant award for an active award year on the COD System or a Pell Grant award is being submitted for the student; and
      • Is not a graduate student (does not have an existing Direct Loan with a Grade Level of 6 or 7 on the COD System or a Direct Loan with a Grade Level of 6 or 7 is not being submitted for the student)

 

  • NSLDS Postscreening/Institutional Student Information Records (ISIRs) – The COD System will send NSLDS the adjusted LEU for all students who have had a Pell Grant LEU Closed School Restoration. NSLDS postscreening will be triggered if the new Pell Grant LEU meets certain conditions that impact the student’s Pell Grant eligibility (for example, a Pell Grant LEU of more than 500% changes to a Pell Grant LEU of 500% or less). In such instances, an updated ISIR and Student Aid Reports (SAR) will be generated. For more information on postscreening when the Pell Grant LEU changes, refer to the 2017-2018 ISIR Guide.

Student Notifications

We will send an email to each student who received a Pell Grant LEU Closed School Restoration adjustment and

  • Who is not receiving aid as a graduate student,
  • Has a Pell Grant LEU, after the Closed School Adjustment, of less than 600.000%,
  • Has either additional Pell Grant eligibility restored for the 2016-2017 Award Year or forward, or had a Pell Grant LEU before the Closed School Adjustment of between 500.000% and 600.000%

A copy of this email notice is included as an attachment to this announcement.

Contact Information

If you have questions about this announcement or its attachment, contact the COD School Relations Center at 800/474-7268. You may also email CODSupport@ed.gov.

Attachments/Enclosures:

Pell Grant Eligibility Restoration Email Text to Students in PDF Format, 429KB, 1 Page

 

Publication Date: 4/3/2017

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