Federal Pell Grant and

Campus-Based Programs Update

Harold McCullough, U.S. Department of Education
Anthony Jones, U.S. Department of Education
 Federal Pell Grant Program
Paying a Student

• A school must pay any student who is eligible

– includes less-than-half-time students
• A school must make payments for all eligible
periods of enrollment
– includes eligible students in summer school terms
– may not have a policy to not pay for summer terms

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 Federal Pell Grant Program
Paying a Student (cont’d)
• For crossover periods, a school may:
– set a policy to place the Pell payment period in one
award year or the other for all students; or
– make the award year decision on a student-by-
student basis
• However, if more than 6 months of a crossover
payment period is in one award year, the Pell
payment period must be placed in that award
year
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 Federal Pell Grant Program
Concurrent Enrollment

• A student is not entitled to receive Federal Pell Grant

payments concurrently from more than one institution
– However, the fact that student's payment period at School A
overlaps with the one at School B does not automatically
make student ineligible to receive Federal Pell Grant funds for
both payment periods
– In order to receive Federal Pell Grant funds for both payment
periods, the student must cease attendance at one of the
institutions (see example next slide)

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 Federal Pell Grant Program
Student Enrollment At School A and B With
Payment Periods Overlapping
Student Leaves School A At
School A 360 Clock Hours On 12/20/2001
(Air Conditioning
Program)
1st Payment Period
(450 Clock Hours)
Student Stays At School B
Past 12/20/2001 And
Establishes Eligibility At
School B That Time For This Whole
(Business Program) Payment Period

1st Payment Period

(450 Clock Hours)

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 FSEOG Program
Priority Awarding to Pell Recipients
• First selection group - school must first choose students
with exceptional need (i.e., students with lowest EFCs)
who will also receive Pell Grants in that award year
• In previous guidance, ED stated that "will also receive Pell
Grants" means that applicant has demonstrated Pell
eligibility based upon SAR, ISIR, or manual calculation. If
FSEOG recipient does not actually receive a Pell Grant
during the award year, the school is not required to
recover the FSEOG funds. This is based on the school
relying in good faith on the demonstrated Pell Grant
eligibility.
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 FSEOG Program
Priority Awarding to Pell Recipients (cont’d)
• If school disburses these FSEOG funds, and later learns
that the student will not receive a Pell Grant, we would
not make them recover the FSEOG funds already
disbursed, unless there is an overaward
• This good faith guidance to help schools package
FSEOG did not mean that if a school knows that a
student will not actually receive a Pell Grant, the school
can disburse the FSEOG funds, even though the student
had Pell Grant eligibility when the initial aid package was
determined

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 FSEOG Program
Priority Awarding in Crossover Payment Periods
• During crossover payment period, student who receives Pell
funds and is among those with the lowest EFCs satisfies the 1st
selection group requirements for that same crossover payment
period regardless of which award year the Pell funds attributed
• Student does not necessarily have to receive Pell funds in that
crossover payment period to be awarded FSEOG under 1st
selection group, as long as student will also receive Pell funds in
the award year to which the crossover payment period is
attributed for Pell Grant purposes
– FSEOG can be from either award year’s allocation

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 Federal Perkins Loan Program
Update on Promissory Notes

• Extended deadline for public comment on draft

promissory notes closed on July 9, 2001
– ED reviewing comments for possible revisions
– Revised forms then published with 30 more days for
comment; after that, OMB does final review/approval
– Final forms assigned number and expiration date, then
ED free to distribute
• (anticipate distribution early Fall 2001 for optional immediate
use with mandated use later to allow transition)

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 FWS Program
Conditions Allowing Up to 90% Federal Share
• FWS regulations (34 CFR 675.26(a)(2)) allow a
school to pay a a student a federal share of FWS
wages in excess of the current 75% limit but not
exceeding 90% under the following conditions:
– student is employed at:
• a private, nonprofit organization, or
• a federal, state, or local public agency
– employment at school itself is not eligible

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 FWS Program
Conditions Allowing Up to 90% Federal Share (cont’d)

– school does not own, operate, or control the agency

• to satisfy requirement, school must keep statement on file
(signed by both school and agency) that they have no
such relationship
– school selects the agency on an individual, case-by-
case basis
• satisfied when school selects the agency through its
normal process of selecting potential employers

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 FWS Program
Conditions Allowing Up to 90% Federal Share (cont’d)

– agency must be unable to afford the costs of the

regular nonfederal share
• to satisfy this requirement, school must keep on file a
signed letter from an official of the agency stating that
the agency cannot afford to pay the regular nonfederal
share

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 FWS Program
Conditions Allowing Up to 90% Federal Share (cont’d)

– 90% federal share is limited to no more than 10%

of school’s students paid under FWS
• for this calculation, school must use total number of
FWS student paid during the current award year
• 10% limit does not include students whose FWS wages
have been exempted from the full nonfederal share
requirement due to being employed as a reading tutor,
mathematics tutor, or performing family literacy
activities

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 FWS Program
Expenditure of FWS Allocation
• School must use at least 7% of allocation to pay
students employed in community service jobs
– At least one of the FWS students employed in
community service must work:
• performing family literacy activities in a family literacy
project that provides services to families with preschool
age children or elementary school children; or
• as a reading tutor for children who are preschool age or are
in elementary school

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 FWS Program
Definition of “Community Services”

Community Services - services identified by a

school (through formal or informal consultation
with local nonprofit, governmental, and
community-based organizations) as designed to
improve the quality of life for community
residents, particularly low-income individuals,
or to solve particular problems related to their
needs

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 FWS Program
“Community Services”

• Examples of Community Services in Volume 6

of SFA Handbook (p. 6-34). The services include
such fields as:
– health care, child care, literacy training, education
(including tutorial services), welfare, social services,
transportation, public safety, recreation, and crime
prevention

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 FWS Program
“Community Services” (cont’d)
• Community Services must be open and
accessible to the community
– college not considered a community for this purpose
– a service is considered open to community if the
service is publicized to the community and general
public (not just faculty, staff, students, and their
families) use service
• only statutory exception to this requirement is for support
services for students with disabilities, including those
students enrolled at the school

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 FWS Program
“Community Services” (cont’d)

• To be considered employed in a community

service job, an FWS student does not have to
provide a “direct” service
• To determine whether student’s employment
provides community service, school must
consider whether service provided primarily
benefits community versus the agency or school

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 FWS Program
“Community Services” (cont’d)
• If FWS student was hired to care for the grounds
of the administrative offices of a private non-
profit agency that provides community services,
the job itself would not be community service
• Alternatively, FWS student preparing meals for
“meals on wheels” program wouldn’t have direct
contact with community residents but is still
providing important community service

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 FWS Program
Family Literacy Project
• Family Literacy Project integrates 4 components:
– literacy or pre-literacy education to children;
– literacy training for parents or other caregivers of
children in the family literacy project;
– a means of equipping parents or other caregivers with
the skills needed to partner with their children in
learning; and
– literacy activities between parents or other caregivers
and their children

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 FWS Program
Family Literacy Activities
• The Department:
– does not define “family literacy activities” for
purposes of the community service expenditure
requirement, or the waiver of the institutional share
requirement
– gives schools reasonable flexibility to determine the
job description and duties for an FWS student
performing family literacy activities

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 FWS Program
Family Literacy Activities (cont’d)
• Family literacy activities:
– are not limited to just tutoring positions
– may include, for example:
• training tutors
• performing administrative tasks such as coordinating tutors
• working as instructional aide who prepares materials
– may not include, for example, janitorial or building
repair jobs

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 FWS Program
Directly Crediting Student’s Account

• With written authorization from student,

school may make FWS payments to student
by:
– initiating EFT to student’s bank account, or
– crediting student’s account at the school

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 FWS Program
Directly Crediting Student’s Account (cont’d)

• school may only credit the student’s account

at school to satisfy:
– current award year charges for tuition & fees, room
and board contracted through school, and other
school-provided educationally-related
goods/services
– or minor prior award year charges, if less than
$100 or not preventing payment of current
educational costs

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 FWS Program
Directly Crediting Student’s Account (cont’d)

• To make these payments, the school must:

– obtain a written authorization from student;
– not include this authorization as part of a list or in
combination with other types of authorizations;
– not require or coerce student to provide this
authorization;
– allow student to cancel or modify this authorization; and
– clearly explain how it will use this authorization

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 FWS Program
Directly Crediting Student’s Account (cont’d)
• Authorization to transfer FWS funds to student’s
school account must be separate from
authorization to transfer FWS funds to student’s
bank account
• For purposes of authorization to transfer FWS
funds to student’s bank account, bank forms
required to initiate direct EFT deposit can be
considered authorization

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 FWS Program
Directly Crediting Student’s Account (cont’d)
• Holding Excess Funds
– If total amount of FWS funds credited exceeds
amount of allowable charges, student must be paid the
balance as soon as possible, but no later than 14 days
after the balance occurred on the student’s account at
the school
– With written authorization from student, school may
hold on behalf of student FWS funds that would be
otherwise paid directly
• same restrictions for this authorization
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 FWS Program
Directly Crediting Student’s Account (cont’d)
• Holding Excess Funds (cont’d)
– If holding excess funds on behalf of student, school
must:
• identify amount of FWS funds held in excess for each
student in designated subsidiary ledger account;
• maintain cash in its bank account that is always at a
minimum equal to the FWS funds being held for students;
and
• pay any remaining balance by the end of the school’s final
FWS payroll period for the award period

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 FWS Program
Directly Crediting Student’s Account (cont’d)

• Holding Excess Funds (cont’d)

– if student cancels written authorization to hold
excess FWS funds, the school must pay those
funds to the student as soon as possible, but no
later than 14 days after the school receives that
cancellation notice

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 FWS Program
Applying for Funds on FISAP

• A school will never receive more FWS funds than

it requests on the FISAP, regardless of the results
of the statutory formula
– approximately 1/3 of schools cap themselves for FWS
• A school should request funds for a program on
the FISAP on the basis of what it can use
• However, a school should not request more funds
than it can expect to use
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