The Department of Education (ED) late Monday released initial guidance for the implementation of year-round Pell Grants, confirming that the grants will be payable only out of 2017-18 funds and associated need analysis. Students enrolled in periods of enrollment that cross over July 1, 2017, whose institutions consider the crossover period to be part of the 2016-17 award year will not be eligible for additional Pell Grant funds for summer based on the 2016-17 need analysis.
Congress restored a version of year-round Pell in its recent spending package and instructed ED to issue guidance for implementation no later than July 1, 2017. The statutory language allows an eligible student to receive up to 150 percent of the student’s Federal Pell Grant Scheduled Award for an award year. The student must be enrolled at least half-time in the payment period for which the student receives the additional Pell Grant funds in excess of 100 percent of the student’s scheduled award. There is no eligibility requirement that the student must be accelerating in an academic program. Although the provision is “effective in the 2017-18 award year and thereafter,” crossover periods complicate the picture and the exact effective date was open to ED interpretation. In a letter to ED last month, NASFAA raised several questions on the implementation of year-round Pell, ranging from the exact implementation date to assigning crossover periods to safe harbors for early implementation.
“This decision is about empowering students and giving them the flexibility and support needed to achieve their goals,” DeVos said in a statement. “Expanding access to the Pell program, so that students who need additional resources can graduate more quickly and with less debt, is the right thing to do.”
According to a release from ED, institutions are strongly encouraged to disburse Pell funds for eligible students studying this summer out of the 2017-18 award year, unless the student has remaining eligibility from the 2016-17 award year.
“Although institutions have the flexibility to assign crossover payment periods to either of the relevant award years, the new law provides that an institution must make the assignment ‘as it determines is most beneficial to students,’” the release and the Dear Colleague Letter said. “Therefore, that decision should be based on what is in the best interest of the student and maximizes the student’s eligibility over the two award years.”
In the previous version of year-round Pell that ended after the 2010-11 award year, institutions were required to assign the crossover period to the award year that yielded the highest Pell payment to the student for the summer, regardless of any longer term repercussions, such as exhaustion of the upcoming year’s Pell eligibility. The current guidance considers the student’s eligibility over the course of the two full award years in question, rather than only the crossover period. It is unclear at this time if ED will require the school to review the student’s file and possibly re-assign the summer Pell to a different award year if there are changes to the student’s circumstances. We would expect that the definition of “what is most beneficial to students,” as well as other matters, will be negotiated in a future negotiated rulemaking session. In the meantime, NASFAA is already pulling together institutions to identify issues for negotiation.
Publication Date: 6/20/2017