[Federal Register Volume 59, Number 210 (Tuesday, November 1, 1994)]
[Unknown Section]
[Page 0]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 94-26832]
[[Page Unknown]]
[Federal Register: November 1, 1994]
_______________________________________________________________________
Part III
Department of Education
_______________________________________________________________________
34 CFR Parts 690 and 691
Federal Pell Grant Program; Presidential Access Scholarship Program;
Final Rule
=======================================================================
-----------------------------------------------------------------------
DEPARTMENT OF EDUCATION
34 CFR Parts 690 and 691
RIN 1840-AB73
Federal Pell Grant Program; Presidential Access Scholarship
Program
AGENCY: Department of Education.
ACTION: Final regulations.
-----------------------------------------------------------------------
SUMMARY: The Secretary amends the Federal Pell Grant Program
regulations and establishes regulations for the Presidential Access
Scholarship Program. These regulations are needed to implement
provisions of the Higher Education Act of 1965 (HEA) as amended by the
Higher Education Amendments of 1992, Public Law 102-325 (the 1992
Amendments), enacted on July 23, 1992 and the Higher Education
Technical Amendments of 1993, Public Law 103-208 (1993 Technical
Amendments), enacted on December 20, 1993.
The final regulations for the Federal Pell Grant Program change the
program name from ``Pell Grant Program'' to ``Federal Pell Grant
Program.'' In addition, the regulations update student eligibility
requirements and institutional administration requirements.
The final regulations for the Presidential Access Scholarship
Program specify the eligibility requirements for a student to apply for
and receive an award. These regulations also specify the roles of
institutions of higher education, State officials, and State agencies
in administering the program.
EFFECTIVE DATE: These regulations take effect on July 1, 1995 and apply
to the 1995-96 and subsequent award years. However, affected parties do
not have to comply with the information collection requirements in
Secs. 690.12, 690.13, 690.75, 690.82, 691.61, 691.73, 691.82, and
691.83 until the Department of Education publishes in the Federal
Register the control numbers assigned by the Office of Management and
Budget (OMB) to these information collection requirements. Publication
of the control numbers notifies the public that OMB has approved these
information collection requirements under the Paperwork Reduction Act
of 1980.
FOR FURTHER INFORMATION CONTACT: Denise Boulanger, Student Financial
Assistance Programs, Office of Postsecondary Education, U.S. Department
of Education, 600 Independence Avenue SW., Room 4018, Regional Office
Building 3, Washington, D.C. 20202-5447. Telephone (202) 708-4607.
Individuals who use a telecommunications device for the deaf (TDD) may
call the Federal Information Relay Service at 1-800-877-8339 between 8
a.m. and 8 p.m., Eastern time, Monday through Friday.
SUPPLEMENTARY INFORMATION: On February 25, 1994, the Secretary
published a notice of proposed rulemaking (NPRM) for the Federal Pell
Grant Program and the Presidential Access Scholarship Program in the
Federal Register (59 FR 9354) to implement portions of the 1992
Amendments and the 1993 Technical Amendments.
These regulations, a result of the NPRM and public comment on those
proposed rules, implement the statutory changes required under the 1992
Amendments and the 1993 Technical Amendments to the HEA. The revised
regulations--
Rename the Pell Grant Program the Federal Pell Grant
Program;
Eliminate the duration of eligibility limitations for an
undergraduate student without a baccalaureate degree or its equivalent;
Implement the new academic year definition for the Federal
Pell Grant Program by revising the methodology for calculating a
Federal Pell Grant payment for a payment period. Revised methodologies
are also included for programs of study offered by correspondence and
for programs where the Secretary has granted an exception to the
requirement that a program's academic year must include at least 30
weeks of instructional time;
As a result of the passage of the Violent Crime and Law
Enforcement Act of 1993, incarcerated students in Federal or State
penal institutions are ineligible to receive Federal Pell Grants for
any period of enrollment beginning on or after enactment of that Act.
Incarcerated students, other than those in Federal or State penal
institutions, are still eligible to receive Federal Pell Grants. The
cost of attendance of those students under section 472(6) of the HEA is
still limited to ``tuition and fees and, if required, books and
supplies.'' The provisions of this Act also repeal the statutory
requirements that are the basis for the provisions in Sec. 690.75 (f),
(g), and (h) of the NPRM. These provisions are deleted from the final
regulations.
Incorporate references to the expected family contribution
(EFC) under part F, title IV of the HEA and eliminate references to the
Pell Grant Index (PGI);
Eliminate the necessity that a student present a Student
Aid Report (SAR) to an institution in order to be paid his or her
Federal Pell Grant if the institution participates in the electronic or
magnetic disbursement systems.
Require an institution to pay a student on the basis of a
valid Institutional Student Information Record (ISIR), i.e., a report
to an institution generated by the central processor that includes an
applicant's application information and EFC;
Provide that less-than-half-time students receive Federal
Pell Grants; and
Provide that, under certain circumstances, a full-time
student pursuing an associate or baccalaureate degree may receive up to
two Scheduled Federal Pell Grants within one award year. One of those
circumstances is a determination by the Secretary that sufficient funds
are available from the Federal Pell Grant Program appropriation for
that award year to make all or part of a second Scheduled Federal Pell
Grant award.
Conforming changes have also been made to incorporate changes made
in the regulations governing Institutional Eligibility Under the Higher
Education Act of 1965, as Amended, 34 CFR part 600 (59 FR 22324), and
in the Student Assistance General Provisions, 34 CFR part 668 (59 FR
22348).
The regulations also implement the Presidential Access Scholarship
(PAS) Program, a program to encourage students from low- and moderate-
income families to upgrade their course of study at the high school
level, finish high school, and attend college. However, funds have yet
to be appropriated for the PAS Program.
Changes were made to the PAS Program regulations to parallel
changes being made to the Federal Pell Grant Program regulations
because the delivery of PAS Program funds would be done using the same
delivery system as the Federal Pell Grant Program and conforming
changes would simplify the administration of the PAS Program in the
following provisions: Sec. 691.2, Sec. 691.3, Sec. 691.61, Sec. 690.64,
Sec. 691.66, Sec. 691.77, Sec. 691.82, and Sec. 691.83.
Substantive Changes to the NPRMs
Part 690--Federal Pell Grant Program
The Federal Pell Grant Program application process is evolving from
a paper to an electronic application process. To reflect that change
and respond to public comment with regard to this evolution, the
Secretary has made a number of changes in the final regulations.
A student may still submit a paper application to the Secretary for
the latter to calculate the student's expected family contribution. A
student applying using a paper application receives an SAR. Any
institutions listed by the student on his or her application may also
receive the student's application information and expected family
contribution (EFC) from the central processor. At the election of the
institution, the central processor may mail a magnetic record or paper
document to the institution or electronically transmit the student's
information to the institution.
The student may also apply electronically through the institution
he or she is attending or plans to attend. Under this procedure, the
student still may complete a paper application and obtain the necessary
signatures on that application, e.g., the student and at least one of
the student's parents if the student is a dependent student. However,
the student would bring the signed application to the institution.
Alternatively, the student may complete an electronic application, and
the student, and one of the student's parents if the student is
dependent, sign a printout of the information entered on the electronic
application. The institution would then transmit electronically the
student's application information to the central processor. The central
processor would calculate the student's EFC based upon the application
information and transmit electronically the student's application
information and EFC back to any institutions designated by the student
to receive the information.
When an institution receives the student's application information
and EFC from the central processor, the electronic or magnetic record
or the paper document is considered an ``Institutional Student
Information Record'' or ``ISIR.'' If that information is accurate and
complete as of the date of application, that electronic record or paper
document is considered a ``valid ISIR.'' Based upon that valid ISIR,
the institution determines a student's eligibility for a Federal Pell
Grant award and the amount of that award and pays the student his or
her award. An institution receiving ISIRs may not require a student to
submit an SAR as a precondition to receiving a Federal Pell Grant
award. Thus, in general, the ISIR and valid ISIR are taking the place
of the SAR and the valid SAR in the processing of Federal Pell Grant
awards. However, an institution must pay a student a Federal Pell Grant
award on the basis of receiving either a valid SAR or valid ISIR. An
institution is not required to pay a student in circumstances where (1)
the student is not qualified to receive a disbursement, e.g., the
student is in default on a Federal Stafford loan; or (2) the
institution is specifically authorized by the Secretary to withhold
payment, e.g., the institution has requested, but not yet received, a
financial aid transcript under 34 CFR 668.19.
As a result of this change and public comment on the proposed
regulations that pointed out that current and proposed regulatory
provisions were not in keeping with this change, the Secretary is
revising several current and proposed regulatory provisions, as
explained below.
As just noted, an institution pays a Federal Pell Grant award to a
student on the basis of a valid ISIR, which is defined as a paper
document or a computer-generated electronic or magnetic record that the
Federal Pell Grant central processor transmits to an institution. This
document takes the place of what was previously known as an electronic
SAR or ``ESAR'' that an institution would receive under the Electronic
Data Exchange (EDE). Therefore, the Secretary has amended the
definition of a ``valid SAR'' to delete the reference to an SAR
received under EDE.
The Secretary has also changed the signature requirements necessary
to support a Federal Pell Grant award. The Secretary has deleted the
requirement that a valid ISIR be signed. The ISIR is also valid if it
accurately reflects corrections that (1) are based on signed correction
documentation or documentation submitted under 34 CFR 668.57 and (2)
are processed through the central processor.
The Secretary is adding Sec. 690.63(a)(6) that designates the
methodologies in Sec. 690.63 that the institution uses to calculate a
payment for a payment period if an institution is granted a waiver of
the minimum 30-week requirement for the academic year.
The Secretary is removing Sec. 690.64(c) that requires an
institution to combine minisessions during payment periods that occur
within two award years.
The Secretary is revising Sec. 690.66 that establishes how to
calculate a payment for a payment period for a program of study by
correspondence. The revision incorporates the new academic year
definition by requiring that payments for correspondence courses be
calculated in a way that considers both the number of weeks of
instructional time and the number of credit hours.
The Secretary is adding a new Sec. 690.67 to the regulations
allowing for up to 2 Scheduled Federal Pell Grant Program awards in an
award year and is authorizing an institution that provides up to 2
Scheduled Federal Pell Grant awards in an award year to determine which
students qualify for a second Scheduled Award within the award year
using criteria established by the Secretary in this section.
The Secretary is removing Sec. 690.77, Initial disbursement of a
Pell Grant in an award year without a valid SAR.
The Secretary is adding requirements to Sec. 690.82 to specify what
types of application information must be retained at an institution
when the institution submits a student's application information to the
Secretary electronically. An institution has been required to retain a
student's application information under its EDE participation agreement
with the Secretary when that institution has submitted the student's
application information electronically to the central processor.
However, the Secretary believes that it is important to add to the
record retention requirements in the regulations what types of
application information must be retained rather than rely solely on an
institution's EDE participation agreement. In addition, the Secretary,
through publication of a notice in the Federal Register, is allowing
for institutions to retain documents in media formats other than paper
and microform. The Secretary intends to indicate in the notice the
types of media storage acceptable to the Secretary and documents an
institution may retain in media other than paper.
Part 691--Presidential Access Scholarship Program
There are no substantive differences between the PAS Program NPRM
and the final regulations except where conforming changes were made to
coordinate the PAS Program regulations with the Federal Pell Grant
Program regulations.
Analysis of Comments and Changes
In response to the Secretary's invitation to comment on the NPRM,
61 parties submitted comments on the proposed regulations. An analysis
of the comments and of the changes in the regulations since publication
of the NPRM follows.
Substantive issues and changes are discussed under the section of
the regulations to which they pertain. Technical and other minor
changes--and suggested changes the Secretary is not legally authorized
to make under the applicable statutory authority--are not addressed.
Federal Pell Grant Program
Section 690.2 General Definitions
Comments: None.
Discussion: The Secretary published final regulations governing
Institutional Eligibility Under the Higher Education Act of 1965, as
Amended, 34 CFR part 600, and the Student Assistance General
Provisions, 34 CFR part 668, in the Federal Register on April 29, 1994.
The Secretary is amending the Federal Pell Grant Program final
regulations to reference accurately the definitions published in those
final regulations. The Federal Pell Grant Program final regulations now
reference in Sec. 690.2(a) the definitions of ``award year,''
``correspondence course,'' ``incarcerated student,'' ``regular
student,'' and ``State,'' as published in the Institutional Eligibility
Under the Higher Education Act of 1965, as Amended, regulations at 34
CFR part 600, and the references to ``award year,'' ``regular
student,'' and ``State'' in Sec. 690.2(b) are removed. The Federal Pell
Grant Program final regulations also update the references to the
Federal Perkins Loan Program, Federal Supplemental Educational
Opportunity Grant Program, and Federal Work-Study Program and reference
the definitions of ``full-time student'' and ``HEA'' as published in
the Student Assistance General Provisions regulations at 34 CFR 668.2.
The references to the definitions of ``full-time student,'' ``Pell
Grant Index,'' and ``Student Aid Report Payment Document'' under
Sec. 690.2(c) are removed. An institution must use the same definition
of a full-time student for all title IV, HEA programs. The Federal Pell
Grant Program final regulations also remove the reference to the
definition for ``Public or private nonprofit institution of higher
education'' in 34 CFR 668.2(b) since this definition is no longer used.
The final regulations under Sec. 690.2(c) add the definitions for
``annual award,'' ``central processor,'' ``expected family
contribution,'' ``Institutional Student Information Record,'' ``less-
than-half-time student,'' ``Student Aid Report Payment Voucher,'' and
``valid Institutional Student Information Record.''
The proposed definition of the term ``academic year'' in
Sec. 690.2(c) has been deleted. Instead, the final regulations
reference the definition of that term in 34 CFR 668.2 of the Student
Assistance General Provisions.
Changes: Section 690.2 of the final regulations is revised to
reference the definition of the terms ``award year,'' ``incarcerated
student,'' and ``regular student'' in 34 CFR part 600. Also, Sec. 690.2
is revised to reference the definitions of the terms ``full-time
student'' and ``HEA'' in 34 CFR part 668; to remove the reference to
the definitions of the terms ``award year,'' ``regular student,'' and
``Public or private nonprofit institution of higher education'' in
Sec. 690.2(b); and to remove the definitions of the terms ``academic
year'' and ``full-time student'' in Sec. 690.2(c). The final
regulations under Sec. 690.2(c) also add the definitions for ``annual
award,'' ``central processor,'' ``expected family contribution,''
``less-than-half-time student,'' ``Processed Information Record,''
``Student Aid Report Payment Voucher,'' and ``Valid Processed
Information Record.''
Student Aid Report (SAR) Payment Document
Comments: While the definition of the term ``Student Aid Report
(SAR) payment document'' was not discussed in the proposed regulations,
one commenter believed that the definition of the term needed to be
updated because the third part of an SAR is no longer called a
``payment document'' but, instead, is called a ``payment voucher.'' The
commenter also noted that the definition of an SAR payment document did
not address the automated formats that many institutions use to submit
payment information to the U.S. Department of Education (Department).
Discussion: The Secretary agrees that the name of the document used
to report individual payment information to the Secretary has changed
and is now called a ``SAR payment voucher.'' The Secretary also agrees
that automated methods of submitting the payment information are not
addressed in the current definition nor does that definition accurately
reflect the disbursement information that is required to be submitted
by the institution for payment. The Secretary also agrees that the
definition of a payment voucher needs to be updated and needs to
provide for all forms of the payment voucher.
Further, most institutions currently submit their student payment
information to the Secretary in an automated format. To ease the
administrative burden for all institutions by reducing the amount of
paperwork that institutions must handle through the manual encoding and
batch preparation of paper Payment Vouchers in the submission process,
and to accelerate the processing of payment information, the Secretary
intends to provide that all institutions must submit student payment
information to the Department in an automated format beginning with the
1996-97 award year. Therefore, at that time, the Department will no
longer print paper payment vouchers with SARs. The Secretary believes
that new costs to an institution because of this requirement are
generally nonexistent. Most institutions currently have a personal
computer or other technology that will allow them to process Payment
Vouchers in this manner. In addition, the Department will provide all
required software, and also the necessary training and guidance in
using the software for automated Payment Voucher submissions.
Changes: The term ``SAR payment document'' is renamed a ``payment
voucher.'' The definition is revised to provide that a payment voucher
is an electronic or magnetic record, or for the 1995-96 award year a
paper record, that is provided to the Secretary by an institution
showing a student's expected family contribution, cost of attendance,
enrollment status, and student disbursement information.
Valid Institutional Student Information Record (ISIR)
Comments: A commenter noted that valid electronic SARs (ESARs) and
valid ISIRs appear to be the same since they are both records of
students' application information and EFCs provided directly to
institutions by the central processor.
Discussion: The Secretary agrees and is revising the definition of
the term ``valid SAR'' to, in effect, eliminate ESARs.
Changes: The Secretary is removing paragraph (2) in the definition
of the term ``valid SAR'' that references EDE and serves as the basis
for ESARs. A report to an institution of student information that is
generated through EDE is encompassed by the term ISIR in the final
regulations.
Section 690.2 General Definitions, Section 690.13 Notification of
Expected Family Contribution, and Section 690.14 Applicant's Request
for Recalculation of Expected Family Contribution Because of Clerical
or Arithmetic Error
Comments: Several commenters questioned why a valid ISIR has
signature requirements if the student's application for Federal student
aid is properly signed. These commenters noted that the additional
signature on the ISIR did not afford the Secretary additional
protection against Federal Pell Grant awards being made on the basis of
inaccurate information. Another commenter believed that the signature
requirements for a valid ISIR should be consistent with the signature
requirements for a valid paper SAR, which does not require a signature.
Another commenter requested increased flexibility in the program
regulations regarding signature requirements. He believed that
electronic documents increased the need for flexibility in these
requirements and improved delivery of the Federal Pell Grant Program
assistance to students at a large institution. He further believed that
the signature requirements for valid ISIRs negated these improvements
and that signatures were unnecessary because the signatures certifying
the accuracy of the application information are collected on the
application. Another commenter believed that, if the ISIR was the
product of a paper application the student submitted through the postal
service to the central processor, a signature need not be required.
Discussion: The Secretary agrees with the commenters that the
signature requirement for a ``valid ISIR'' does not provide the
Secretary with additional protection against the use of inaccurate
information in calculating Federal Pell Grant awards, delays the award
process and may needlessly increase the administrative burden on an
institution. Therefore, the Secretary is removing that requirement.
Application signatures will be on file, however, at the institution
that transmitted the application data to the central processor or at
the application processor if the student submitted a paper application.
In addition, if a student wishes to make corrections to the
information previously reported for the purpose of having his or her
expected family contribution recalculated, the student would either
send a paper application or Part 2 of an SAR, that was certified by all
appropriate parties, or would have its institution transmit that
information. Under the latter circumstance, the institution would not
transmit that information unless it had the student's certified
``correction application,'' or documentation that contained appropriate
signatures, such as verification documentation required under 34 CFR
668.57, supporting the change. Thus, for example, an institution would
transmit a change in the adjusted gross income of the student's parents
if the student provided the institution with his or her parents' signed
Federal income tax return, and that tax return supported the changed
adjusted gross income.
While the Secretary believes that it is reasonable to remove the
signature requirements for a valid ISIR, he believes that a student
should always receive a copy of his or her application information and
EFC produced by the central processor so that the student has an
opportunity to review the accuracy of his or her processed application
information. Currently, because of processing system constraints, the
Secretary can only generate an SAR if a paper application is received
by one of the application processors. Therefore, for the 1995-96 award
year, the Secretary will continue to provide a student with his or her
application information and EFC only if the student submits a paper
application or a correction on Part 2 of an SAR to an application
processor. Because the Secretary cannot provide an SAR to a student
whose application information is submitted through EDE, the Secretary
is providing that for the 1995-96 award year an institution must
provide to a student a copy of his or her application information and
EFC from the central processor if the institution submits the student's
application information or corrections through EDE since the student
cannot receive his or her information in any other manner. In the 1996-
97 and subsequent award years, once system changes have been
implemented, the Secretary will provide a copy of the student's
application information and EFC directly to each student, including
those whose application information is transmitted to the central
processor under EDE. The Secretary believes this change reduces the
administrative burden associated with the ISIR signature requirements
since signed correction documentation is already required and an
institution will no longer need to collect a second signature on the
ISIR to pay a student.
An ISIR produced from an application submitted to the Secretary
should match the information on the student's application. (An ISIR can
be generated by the central processor and transmitted to an institution
if the student submits a paper application to an application processor
and releases the information to the institution. In addition, an
institution may obtain a ISIR through EDE if the student provides his
or her PIN number to the institution.) If the student's information
requires corrections, the documentation to support those corrections
can be collected in several ways; however, the student's signature, and
a parent's signature if the student is dependent, must be collected.
The correction information and signatures can be collected on Part 2 of
the SAR, a correction application, or, under EDE, a copy of the
corrected information that is sent to the central processor. Also, if
the institution (1) has verification documentation under 34 CFR 668.57
from the student, or one of the student's parents if the student is
dependent, e.g., tax returns, nontax filer statements, and verification
worksheets, (2) makes corrections to the student's information based on
the content of those documents through EDE, and (3) verifies the
accuracy of the ISIR information generated from those corrections, the
ISIR is valid.
Since the student need not return to the financial aid office to
review the information on the ISIR and verify its accuracy, the
institution must assume a greater responsibility for assuring that
application information and corrections to application information
submitted electronically from the institution accurately reflect the
content of the application or correction documentation. The institution
is reminded that it must resolve any inconsistent information
concerning a student's application information in accordance with 34
CFR 668.16(f). If an institution using EDE makes an error and does not
submit accurately the student's information from his or her application
or corrections to the student's application information, the ISIR would
not be valid, and the institution, under Sec. 690.79, as well as the
student would be liable for any overpayments made to the student. An
institution is reminded that if, through institutional error,
disbursements are made to a student without a valid SAR or ISIR, the
institution may also be subject to a penalty, in addition to any
liability for an overpayment, for improper administration of Federal
Pell Grant Program funds. The institution must also assure that funds
are only disbursed to an eligible student that the institution has
documented as being enrolled in an eligible program of study at the
institution before the student is paid.
Changes: The signature requirements for a valid ISIR are removed.
In addition, Secs. 690.2, 690.12, 690.13, and 690.14 of the regulations
are revised. The EDE definition in Sec. 690.2 is revised to reference
the ISIR. Section 690.12 is modified to describe the EDE option of
applying for a Federal Pell Grant. Section 690.13 is modified to
indicate that the Secretary will forward to each applicant his or her
student eligibility information starting in the 1996-97 award year. For
1995-96, under Sec. 690.13(b) an institution must provide to all
applicants whose data the institution transmits to the central
processor through EDE, a copy of the applicant's student eligibility
information received back from the central processor. Institutions must
provide the information to ineligible students and students who do not
attend that institution. Section 690.14 is revised to require that
corrections submitted through EDE be based on (1) information on an
approved form e.g., a correction application or Part 2 of an SAR,
certified by the applicant and, if the applicant is dependent, one of
the applicant's parents or (2) verification documentation provided by
an applicant under 34 CFR 668.57.
Section 690.10 Administrative Cost Allowance to Participating Schools
Comments: Several commenters recommended that the Secretary clarify
the term ``significant number'' of students as it is used in this
section. If an institution enrolls a significant number of less-than-
full-time or independent students, the regulations would require that
the institution use a portion of its Federal Pell Grant administrative
cost allowance funds to assure that financial aid services are
available to those students. The commenters suggested ``significant
number'' be defined as instances where 75 percent of an institution's
students attend less-than-full-time or are independent.
Discussion: The Secretary believes the term ``significant number''
represents a number of students attending less-than-full-time or who
are independent that is substantially less than 75 percent. However,
the Secretary is not defining ``significant number.'' Instead, the
Secretary is relying on the institutions to be able to demonstrate to
the Secretary through its annual audits or in a program review that
their expenditures for financial aid services resulted in those
services being reasonably available to those students.
Changes: None.
Section 690.61 Submission Process and Deadline Date for Student Aid
Reports or Institutional Student Information Record
Comments: Several commenters supported the Secretary's proposal in
Sec. 690.61 to allow the institution to pay a student his or her
Federal Pell Grant from either an SAR or ISIR. One commenter questioned
why an institution was required to base a student's award on an
eligibility document received from the Secretary. Another commenter
requested clarification of the requirements to pay a student if the
institution had received an ISIR and had not yet received an SAR.
Discussion: The Secretary added the use of the ISIR as an
appropriate document to determine a student's Federal Pell Grant to
implement the provisions of section 401(f) of the HEA as amended by the
1992 Amendments. Section 401(f) of the HEA mandates that an institution
pay a student his or her Federal Pell Grant based on that document.
Thus, when an institution receives a valid ISIR, it must pay a Federal
Pell Grant to an otherwise eligible student based on the valid ISIR. An
institution may not require the student to provide an SAR unless the
institution relies solely on the SAR payment voucher to report Federal
Pell Grant expenditures to the Secretary. In response to the other
commenter, an institution must pay a student a Federal Pell Grant based
on the receipt of a valid SAR. There are instances where a student will
receive an SAR before the institution receives an ISIR.
Changes: None.
Section 690.63 Calculation of a Federal Pell Grant for a Payment
Period
General
Comments: A commenter requested clarification concerning whether a
student who had completed the credits for an academic year but had not
yet completed the weeks of instructional time and had remaining
eligibility from his or her Scheduled Federal Pell Grant award could be
paid the remainder of that Scheduled Award.
Discussion: Section 481 of the HEA now defines an ``academic year''
as a period of at least 30 weeks of instructional time during which a
student completes at least 24 semester or trimester hours or 36 quarter
hours unless, for good cause on a case-by-case basis, the Secretary has
reduced the 30-week minimum to not less than 26 weeks. Section 401(d)
of HEA specifies the amount of a Federal Pell Grant that can be paid to
a student for an academic year. Thus, a student must complete an
academic year in both weeks of instructional time and clock or credit
hours to receive his or her Scheduled Award. A student who has
remaining eligibility from his or her Scheduled Award may always
receive a payment for any amount of his or her remaining eligibility as
long as he or she continues to be an eligible student enrolled in an
eligible program for a payment period that is within that award year.
For example, an institution defines a program's academic year as 24
semester hours and 30 weeks of instructional time. A full-time student
enrolls in a program that provides 24 semester hours in 25 weeks of
instructional time and the student completes 24 semester hours in 25
weeks. Therefore, because the student has not completed an academic
year in both credit hours and weeks of instructional time, the student
has not received his or her entire Scheduled Federal Pell Grant award.
If the student enrolls and attends another payment period within that
award year and that payment period is at least 5 weeks, the student may
receive any amount remaining of his or her Scheduled Federal Pell Grant
award.
Changes: None.
Comments: Three commenters at institutions subject to the Student
Assistance General Provisions clock-hour/credit-hour formula in 34 CFR
668.8(d) proposed alternatives to that formula. The commenters proposed
that, rather than determine the number of credit hours through the
clock-hour/credit-hour formula, they retain the credits at their
current value and determine a student's enrollment status simply by
using the methodology in the full-time student definition in 34 CFR
668.2.
Discussion: The Secretary does not agree with the commenters'
proposals that would, in effect, negate the clock-hour/credit-hour
formula in 34 CFR 668.8(d). Thus, an institution subject to the clock-
hour/credit-hour formula in 34 CFR 668.8(d) must first calculate the
number of credit hours under the formula in 34 CFR 668.8(d) before a
payment for a payment period can be determined and must use the result
for all purposes in the title IV, HEA programs including calculating a
Federal Pell Grant award. For example, an institution has a 24-
semester-hour program of study before the clock-hour/credit-hour
formula is applied. The 24 semester hours is completed in 18 weeks of
instructional time. The institution defines the academic year for that
program as 24 semester hours and 30 weeks of instructional time. A
student attends 600 classroom hours to complete the 24 semester hours
in the program. The clock-hour/credit-hour formula in 34 CFR 668.8(d)
requires that one semester hour equals 30 classroom hours. Therefore,
the program is 20 semester hours under the formula for title IV, HEA
program purposes. The institution uses credit hours without terms.
Therefore, it would use Sec. 690.63(e) to calculate the student's
Federal Pell Grant award for a payment period. Assuming the student's
Scheduled Federal Pell Grant award was $2,340, the institution would
first multiply $2,340 by 18/30 (18 being the number of weeks of
instructional time in the program; 30 being the number of weeks of
instructional time in the program's academic year definition) to equal
$1,404; and then multiply $1,404 by 10/24 (10 being the number of
credit hours in the payment period; 24 being the number of credit hours
in the program's academic year definition) to equal $585. Thus, the
student would receive a $585 Federal Pell Grant award for each payment
period.
The Secretary recommends that in addition to the information
presented in the NPRM and these final regulations, an institution
review the information in the 1994-95 Student Financial Aid Handbook
(Handbook) in Chapter 4, Section 4. The Handbook presents detailed
examples and explanations that are generally in accordance with the
methodologies presented in these final regulations for calculating a
payment for a payment period for the Federal Pell Grant Program.
Changes: None.
Payment for a Payment Period at Institutions Using Credit Hours With
Terms
Comments: Several commenters supported the Secretary's proposed
methods of calculating a payment for a payment period at a term
institution. One commenter objected to one of the criteria proposed in
Sec. 690.63(a)(1) for using the methodology in Sec. 690.63(b). The
commenter believed that the requirement to have a full-time academic
enrollment standard of at least 12 credit hours for all terms,
including summer, rather than some lesser figure, such as at least 6
hours, was administratively burdensome. The commenter also suggested
that the Federal Pell Grant Program establish an academic year policy
interpretation similar to that of the Federal Family Education Loan
(FFEL) programs. The commenter stated that under the FFEL programs'
policy, if the ``normal academic year'' (fall through spring terms) for
an institution meets the statutory definition of an academic year, and
the student can be enrolled on at least a half-time basis in the
summer, the summer should be treated as just another term. Another
commenter proposed language to be added to Sec. 690.63(a)(1) that would
allow a student enrolled at least half-time who is taking a
``concentrated course load'' at a standard term institution over a
shorter period of time than the standard term to have his or her award
calculated based on that enrollment status under Sec. 690.63(b).
Discussion: The criteria developed in Sec. 690.63(a) for
determining which methodology under Sec. 690.63 (b) or (c) that an
institution may use to calculate a Federal Pell Grant payment for a
payment period for a term-based credit-hour program provides maximum
institutional flexibility while meeting the intent of the statute and
limiting the potential for fraud and abuse. The Secretary disagrees
with the commenter that requiring a full-time student to be enrolled
for at least 12 credit hours creates a new administrative burden on a
term institution because this requirement is not a change in the
current Federal Pell Grant Program requirements with which an
institution must already comply. The definition of a full-time student
requires that such a student be enrolled for at least 12 semester hours
in a standard term for title IV, HEA program purposes. The only major
change in this requirement is that the definition has been moved from
the Federal Pell Grant Program regulations into the General Provisions
regulations so that it is now consistent among all title IV programs.
Because of statutory program differences between the Federal Pell
Grant Program and the FFEL programs, the academic year criteria cannot
be implemented in the same manner. A Federal Pell Grant payment is
based, in part, on enrollment status; the amount of the Federal Pell
Grant award is reduced if a student attends less-than-full-time.
Moreover, a Federal Pell Grant award is reduced if a student attends
less than a full academic year. An FFEL Program loan can be certified
for the maximum amount even if the student attends only half-time if
the student's financial need supports the amount for which the loan is
being certified.
Changes: None.
Comments: Two commenters believed that the prohibition against
``multiple start dates'' under the methodologies proposed in
Sec. 690.63(a)(1) or (a)(2) would prevent an institution from allowing
a student to start classes at the beginning of any of an institution's
terms rather than a specific term such as the fall quarter. One
commenter asked what method of calculation was his institution to use
in determining a student's payment for a payment period if his
institution did not meet these particular criteria.
Discussion: The Secretary believes that there is not a clear
distinction between the phrases ``multiple start dates'' and
``overlapping terms.'' Therefore, the Secretary is removing the phrase
``multiple start dates'' from the final regulations. ``Overlapping
terms'' refers to such institutional practices as starting new terms
one right after the other. For example, an institution that offers a
program that begins a new term every week or every month for a new
group of students would be considered to have ``overlapping terms'' and
would be required under Sec. 690.63(a)(3) to use the methodology in
Sec. 690.63(d). If a term-based program does not meet the criteria
under Sec. 690.63(a)(1) or (a)(2), it must calculate awards under
Sec. 690.63(d).
Changes: The phrase ``multiple start dates'' is removed from
Sec. 690.63(a)(1)(i)(D) and (a)(2)(i)(D) of the regulations.
Comments: One commenter at a credit-hour term-based institution
stated that the methodologies in Sec. 690.63(b), (c), and (d) appeared
complex. The commenter believed that the complexity arose in two ways.
First, an institution that offered a wide variety of programs would be
required to perform tracking for each program because of differing
definitions of academic year. Second, complications would arise when a
student transferred from one academic program to another within the
same institution necessitating a recalculation of the student's Federal
Pell Grant award. The commenter requested that the Secretary reexamine
the administrative burden before implementing this section of the
proposed regulations.
Discussion: The Secretary believes that at the majority of
institutions, an institution uses the same definition of an academic
year for most programs. In addition, the need to recalculate a
student's award when he or she transfers between programs is not a new
requirement created by the proposed rule. An institution has always had
to redetermine eligibility and recalculate a student's award for any
number of reasons, such as if a student enrolls in a new educational
program that differs in program length from the old program.
Changes: None.
Comments: A commenter requested that the Secretary delay
implementation of Sec. 690.63 and extend the comment period because the
Secretary had deliberately barraged the financial aid community with
notices of proposed rulemaking in an attempt to provide the public with
little time for review and comment. Another commenter expressed
appreciation that the Secretary had provided a 45-day comment period on
this NPRM and thanked the Secretary for his willingness to make
significant changes to this provision before publication of the
proposed regulations as a result of extensive discussions with the
financial aid community.
Discussion: While it is true that a number of proposed rules for
title IV student financial aid programs were published within a short
period of time, it was not the intention of the Secretary to limit
public comment on the proposed regulations. However, the Secretary has
a statutory publication deadline of December 1, 1994, that he must meet
in order for these regulations to be effective for the 1995-96 award
year. In the case of payment period calculations in Sec. 690.63 of the
proposed regulations, the Secretary began disseminating information to
the public and provided training to the financial aid community about
this section before the proposed regulations were published. Therefore,
the Secretary believes that the public had sufficient time to provide
thoughtful comment on these proposed regulations; these comments
provided valuable information both before the proposed rule was
published and in the development of these final regulations.
Changes: None.
Comments: A commenter requested clarification of the preamble
statement regarding Sec. 690.63(a)(1) that ``the student will be
eligible to be paid one-half of his or her Scheduled Award, if he or
she has enough remaining eligibility (including, if eligible, a second
Scheduled Award) for a summer term even if that term is not at least
one-half of the academic year in weeks of instructional time.''
Discussion: The statement is true for an institution that uses the
methodology under Sec. 690.63(b) to calculate a Federal Pell Grant
payment for a payment period. The Secretary believes the following
example clarifies the statement. An institution has a fall and spring
semester. Each semester provides 15 weeks of instructional time in
which a full-time student is required to complete 12 semester hours.
Institution A defines its academic year as 30 weeks of instructional
time in which a full-time student is expected to complete 24 semester
hours. The institution also has a summer term that begins on June 15
and runs for 12 weeks. To be a full-time student in the summer term a
student must enroll for at least 12 semester hours. Because the fall
and spring semesters provide 30 weeks of instructional time, a full-
time student would be paid one-half of his or her Scheduled Federal
Pell Grant award in each of those semesters. If a student attends only
the spring semester, the student would have half of his or her
Scheduled Award remaining if he or she enrolls for the summer term.
Even if the summer term provides only 12 weeks of instructional time, a
full-time student would be eligible to receive the remaining half of
his or her Scheduled Federal Pell Grant award because the institution
satisfied the 30 weeks of institutional time requirement with the fall
and spring semesters.
Changes: None.
Comment: A commenter suggested that the Secretary revise
Sec. 690.63(a)(1) to clarify that an institution may also choose to
calculate the payment for a payment period under Sec. 690.63(d) even if
it qualifies to calculate the payment under Sec. 690.63(b). The
commenter also preferred that seasonal names like fall, winter, and
spring, not be used to indicate terms because some institutions did not
use those names. The commenter believed that the Secretary should
select some other means of describing those terms.
Discussion: The Secretary believes that the language in the
proposed regulations clearly indicates an institution may choose to
calculate the payment for a payment period under Sec. 690.63(d) even if
it qualifies to calculate the payment under Sec. 690.63(b).
The Secretary agrees that many institutions do not attach seasonal
names to their standard terms. However, the Secretary is using the
names generically to describe which methodology or methodologies an
institution can use to calculate a payment for a payment period. The
Secretary does not require that an institution provide seasonal names
for its terms.
Changes: None.
Payments for a Payment Period for a Clock-Hour Program or a Credit Hour
Program Without Terms
Comments: Several commenters believed there was an error in
Sec. 690.63(e) (2) and (3) of the proposed regulations that outline
payment period calculations for credit-hour without terms and clock-
hour programs. Those commenters believed that the requirement that an
institution with a credit-hour without terms or a clock-hour program
calculate the Federal Pell Grant payment for a payment period by
considering both the timeframe and the clock or credit hours to be
completed in the academic year was a mistake. The commenters believed
that creating two ratios, one based on the weeks of instructional time
and a second based on the clock or credit hours, and then multiplying
the Scheduled Federal Pell Grant award by each ratio created a double
reduction of a student's award. Other commenters believed that this
provision was particularly unfair to economically disadvantaged
students in clock-hour or credit-hour vocational programs without terms
and was not legally supportable.
Discussion: The methodology in Sec. 690.63(e) is not in error and
is consistent with the definition of the term ``academic year''
contained in section 481(d) of the HEA and 34 CFR 668.2. Under each of
the methods set forth in Sec. 690.63 for calculating a Pell Grant award
for a payment period, the Secretary takes into account two variables
relating to an academic year: a credit- or clock-hour variable, at
least 24 semester or trimesters, 36 quarters, or 900 clock hours; and a
timeframe variable, at least 30 weeks of instructional time. Moreover,
a student's Pell Grant award for a payment period is subject to
reduction under each variable, if appropriate.
The credit- or clock-hour component is implemented under paragraphs
(b) (1) and (2), (c) (1) and (2), and (d) (1) and (2) of Sec. 690.63 by
determining a student's ``enrollment status'' for a payment period and
by calculating the award of a less-than-full-time student using the
Disbursement Schedules. Under paragraphs (c)(3) and (d)(3), a student's
award for a payment period is reduced again if the institution does not
provide 30 weeks of instructional time. (No such reduction is required
under paragraph (b) because, by definition, an institution may use
paragraph (b) only if it provides at least 30 weeks of instructional
time in its fall through spring terms.)
Under paragraph, (e) the procedure is somewhat different but the
results are the same. An institution does not calculate a student's
enrollment status and does not calculate an award for a less-than-full-
time student by using the Disbursement Schedules. The institution
determines the student's Scheduled Pell Grant award using the Payment
Schedule, reduces that amount by the weeks of instructional time
variable under Sec. 690.63(e)(2) if the institution does not provide 30
weeks of instructional time, then calculates the award using the clock-
or credit-hour variable. The Secretary in all the methodologies in
Sec. 690.63 first takes into consideration the length of a program's
academic year in weeks of instructional time before considering the
number of credit or clock hours within the academic year. For a program
with terms, the institution must either determine the weeks of
instructional time in its fall through spring terms or examine the
weeks of instructional time in each term in relationship to its
academic year definition. For a credit-hour program without terms or a
clock-hour program, the institution examines the weeks of instructional
time it takes a full-time student to complete the clock or credit hours
in the program or the academic year. If it takes less than 30 weeks of
instructional time for a full-time student to complete the clock or
credit hours in the program or academic year, the Federal Pell Grant
award must be reduced just as at a term institution. Second, for a
term-based program an institution must determine a student's enrollment
status. If the student is not attending full-time, the award must be
reduced to reflect the student's enrollment status. In a credit-hour
program without terms or a clock-hour program, the payment for a
payment period is not based on enrollment status but on how many clock
or credit hours the student will complete in the payment period. Thus,
to treat a student in a credit-hour program without terms or a clock-
hour program in the same manner as a student in a term program, a
second calculation must take place that equates to the adjustment for
enrollment status at a term institution. The adjustment is the
calculation of the number of clock or credit hours the student will
complete in the payment period compared to the number of clock or
credit hours in the academic year.
Changes: None.
Comments: Some commenters expressed concern that under the proposed
regulations a student's Federal Pell Grant award in a program using
credit hours without terms or clock hours may be somewhat less than the
percentage of the academic year that the student may have completed.
Discussion: It is true that as a result of the mathematical
formulas in the regulations, the calculations used to adjust a
student's Scheduled Federal Pell Grant award at both a term institution
and an institution using credit hours without terms or clock hours may
result in an award that is somewhat less than the percentage of the
academic year that the student may have completed. The Secretary
believes that an institution has the flexibility to adjust its
enrollment periods to conform to an academic year. Further, the
Secretary believes that it was the intent of the 1992 Amendments that
an institution offer instruction in a reasonable timeframe to ensure a
favorable learning environment. The Secretary believes that the
calculations may act as an additional incentive to encourage
institutions to provide instruction in a timeframe that is more in
keeping with the academic year definition and that the Secretary
believes is most educationally beneficial to the student.
Changes: None.
Comments: Another commenter questioned whether the requirements of
the regulations for credit-hour without terms and clock-hour programs
were the same as those specified in the 1994-95 Delivery System
Training. The commenter noted that the preamble of the NPRM did not
mention the complete methodology for calculating timeframe fractions
for the number of weeks of instructional time in the program divided by
the number of weeks of instructional time in the academic year and
fails to mention that an institution must use the lesser of that
fraction or a fraction that divides the number of weeks in the academic
year by the number of weeks in the academic year. The second fraction
always results in the number one, as discussed in the 1994-95 Delivery
System Training.
Discussion: The preamble of the Federal Pell Grant Program NPRM
provided only a summary description of the timeframe component in
calculating a payment for a payment period for a credit-hour without
terms or clock-hour program. While the preamble discussion did mention
the fraction based on the time it takes a full-time student to complete
a program whose length is less than an academic year, the preamble did
not describe the calculation for a program that requires a full-time
student to attend longer than an academic year. In the latter case, the
fraction can be less than or greater than one. However, since a student
may not receive more than a Scheduled Federal Pell Grant for an
academic year except as provided for under Sec. 690.67, the institution
must use the lesser of the result of the fraction for the timeframe
requirement for an academic year or the number one.
Changes: The fraction in Sec. 690.63(e)(2) has been modified to
clarify that the fraction used for timeframe can never be greater than
one.
Payments for a Payment Period for a Program Granted a Waiver to the
Academic Year Definition
Comments: None.
Discussion: In the NPRM as well as the NPRM for the Student
Assistance General Provisions regulations, the Secretary requested
comments from the public on how to implement changes in the 1993
Technical Amendments in the academic year definition which provides
that ``* * * the Secretary may, on a case-by-case basis, reduce for
good cause the 30-week minimum instructional time to not less than 26
weeks of instructional time in the case of an institution that provides
a 2-year or 4-year program of instruction for which it awards an
associate or baccalaureate degree * * *.'' While the Secretary did not
receive any comments in connection with this NPRM, the Secretary did
receive comments in connection with the NPRM for the Student Assistance
General Provisions regulations. As a result, the Secretary implemented
the statutory provision in 34 CFR 668.3.
If an institution receives a waiver of the 30 weeks of
instructional time component for its academic year, the Secretary has
provided instructions on how to accommodate that waiver under
Sec. 690.63(a)(6).
Institutions may use the methodologies in Sec. 690.63 (b) or (d)
for a program offered in terms and credit hours where a waiver of the
30-week requirement is granted. An institution may use the methodology
in Sec. 690.63(e) for a credit-hour without terms or a clock-hour
programs where a waiver of the 30-week requirement is granted.
Changes: If an institution receives a waiver of the 30 weeks of
instructional time requirement under 34 CFR 668.3, the institution may
use Sec. 690.63 (b), (d), or (e), as applicable, to calculate a
student's award. If the institution qualifies to use the procedures in
paragraph (b), no changes are necessary unless the provisions of
paragraph (b)(3)(ii) apply. If the institution must use, or chooses to
use, the procedures in paragraph (d) or (e), the institution will
substitute the number of weeks in its academic year, i.e. 26, 27, 28,
or 29, whenever any provision calls for the institution to use the
number of weeks of instructional time in its academic year.
Section 690.64 Calculation of a Pell Grant for a Payment Period Which
Occurs in Two Award Years
Comments: One commenter requested clarification on what constituted
minisessions versus nonstandard terms. The commenter noted that under
Sec. 690.64(c) minisessions were required to be combined when a payment
period occurred in two award years. However, there was no similar
requirement for minisessions that occurred at other times during the
award year, nor was there a similar requirement to treat nonstandard
terms in this manner.
Discussion: The Secretary believes that there is little difference
between minisessions and nonstandard terms except that minisessions
have traditionally been assembled into one single payment period and a
nonstandard term is a payment period by itself. Under Sec. 690.64(c),
institutions have been required to assemble minisessions into a single
payment period when the payment period occurs in two award years. There
has not been a similar requirement that an institution combine terms at
any other time in the award year although many institutions have chosen
to do so in accordance with policy guidance that the Department has
issued. The Secretary believes that requiring an institution to combine
minisessions at only one point during the award year serves little
purpose. The requirement also limits an institution's flexibility in
meeting the needs of its students and may be administratively
burdensome. The Secretary, therefore, believes it is not necessary to
require that minisessions be combined in a payment period that occurs
in two award years.
Changes: The Secretary removes Sec. 690.64(c) that requires
minisessions to be combined in a payment period that occurs within two
award years.
Section 690.65 Transfer Student: Attendance at More Than One
Institution During an Award Year
Comments: One commenter was unsure whether the provisions to
provide a second Scheduled Federal Pell Grant award in an award year
would apply to a transfer student and requested clarification of the
language in Sec. 690.65(c) that requires an institution to ensure that
a transfer student receives no more than one Scheduled Federal Pell
Grant award during an award year. The commenter asked if it was the
Secretary's intent to change the historic practice of limiting a
student to 100 percent of a Scheduled Federal Pell Grant award during
an award year regardless of the number of institutions the student
attends during the award year.
Discussion: The requirements for determining the amount of
remaining Federal Pell Grant eligibility for a transfer student have
not changed. However, if a student meets the requirements for a second
Scheduled Federal Pell Grant award within the same award year under
Sec. 690.67, the institution receiving the transfer student may make
disbursements to the student from his or her second Scheduled Federal
Pell Grant award in accordance with Sec. 690.63.
Changes: Section 690.65(c) is revised to permit a transfer student
to receive a second Scheduled Award in an award year.
Comments: When a transfer student has been overpaid because of
attendance at more than one institution, a commenter recommended that
the regulations clarify which institution the student must repay. The
commenter believed that the regulations should require the student to
indicate which institution he or she would repay and restrict the
institution at which the student is currently enrolled from making
additional title IV disbursements until the student has indicated which
institution he or she would repay.
Discussion: The Secretary believes that current Federal Pell Grant
regulations under Sec. 690.79 are clear regarding an institution's
responsibility regarding overpayments to a transfer student. The
Secretary does not believe that the current regulatory requirements,
which designate responsibility for repayment when an overpayment
occurs, should be changed to provide that a student determine which
institution to repay. In addition, the Secretary believes that the
student should not regain eligibility for title IV, HEA assistance
until the Secretary has been repaid or determines that the overpayment
has been resolved.
Changes: None.
Sec. 690.66 Correspondence Study
Comments: One commenter noted that the proposed regulations did not
describe how to calculate a student's payment for a payment period if
he or she was taking a program of study by correspondence. The
commenter noted that the Secretary had not added the academic year
timeframe requirement to the payment period calculations for a
correspondence program.
Discussion: The Secretary agrees that the new academic year
requirements must be incorporated into payment for a payment period
calculations for correspondence study. The Secretary believes that the
weeks of instructional time in the academic year for correspondence
study can be determined from the written lesson schedule that must be
developed by the institution. The written lesson schedule reflects a
workload of at least 12 hours of preparation per week. Since
correspondence programs generally are programs without terms, the
Secretary believes that payments for payment periods for these programs
can be calculated in much the same manner as clock-hour programs and
credit-hour programs without terms. The Secretary is adapting the
methodology under Sec. 690.63(e) to determine a payment for a payment
period for correspondence programs in Sec. 690.63(f). If a
correspondence program uses terms, the Secretary is providing that an
institution may calculate a payment for a payment period using
Sec. 690.63(d). Of course, a student taking a program of study by
correspondence is considered to be enrolled no more than half-time and
can never receive more than one-half of his or her Scheduled Award.
Therefore, the Secretary requires an institution to use the half-time
Disbursement Schedule to calculate the payment for a payment period for
a program of study by correspondence except in the case of a
correspondence program offered using terms. In the latter circumstance,
the institution would use the less-than-half-time Disbursement Schedule
for a student enrolled in less than the hours necessary to be a half-
time student.
Changes: Section 690.66 is revised to incorporate the academic year
definition into the method for calculating a payment for a payment
period for a program of correspondence courses. Sec. 690.66 is also
amended to incorporate consideration of enrollment status for students
taking only correspondence courses in a term-based program.
Section 690.67 Receiving Two Scheduled Federal Pell Grant Awards
During a Single Award Year
Comments: Several commenters responded to the Secretary's request
for suggestions on how to implement fairly and equitably the statutory
provisions in the 1992 Amendments and the 1993 Technical Amendments
that permit a student to receive up to two Scheduled Federal Pell Grant
awards in a single award year. One commenter believed that all students
must be treated equitably and fairly regardless of the type of
institution they attend, and recommended that any program whose courses
are fully transferable into an associate or baccalaureate degree
program be eligible for an additional Federal Pell Grant in an award
year. Some commenters proposed that the Secretary determine a
reasonable method to identify a student eligible to receive more than
one Scheduled Federal Pell Grant award in the award year. One commenter
recommended that to implement this provision, the Secretary should base
his ``case-by-case'' approval not on a ``student-by-student'' basis,
but on the entire program's academic calendar. It was proposed that a
``blanket'' approval apply to all students in an associate or
baccalaureate degree program for which the institution has sought and
received approval if the student completes more than an academic year's
coursework and meets other program requirements. The approval would be
requested by the institution from the Secretary. The commenter further
proposed that a program should be approved based on its ability to
provide a course of instruction that meets the statutory definition of
an academic year in credit hours and weeks of instructional time. Any
changes in the academic year definition or program structure at the
institution should be reported to the Secretary immediately since
approval would only be granted for the current program structure and
changes would be subject to reapproval.
Discussion: The Secretary agrees that any implementation of this
provision must be equitable and fair to all students eligible to
receive a second Scheduled Federal Pell Grant award within the
program's statutory provisions. The 1992 Amendments and the 1993
Technical Amendments establish statutory eligibility criteria that a
student must meet to receive a second Scheduled Federal Pell Grant
award in an award year. The statutory criteria require that a student
must be enrolled full-time in an associate or baccalaureate degree
program and that the student must have completed all the credits for a
complete academic year. A student who is enrolled in a program whose
credits are fully transferable to an associate or baccalaureate degree
program but is not enrolled in one of those degree programs is not
eligible for a second award.
In addition, the Secretary believes that the information necessary
for the Secretary to approve a student for a second Scheduled Award in
an award year is maintained at the institution he or she is attending.
Therefore, the Secretary believes that if an institution chooses to
award up to two Scheduled Federal Pell Grants within an award year, the
approval of a student for a second Scheduled Federal Pell Grant award
should be entrusted to the institution. The Secretary does not believe
that it is necessary to approve the program in which a student must
enroll to be eligible for a second Scheduled Award if the student meets
all other eligibility criteria.
The Secretary believes that a program's approval for this provision
should not be based on whether an institution provides a course of
instruction that meets the statutory definition of an academic year in
both credit hours and weeks of instructional time. For example, an
institution's definition of an academic year may not coincide with its
academic calendar's enrollment periods, i.e., it may have two semesters
that total 28 weeks of instructional time. If a student completes an
academic year's worth of credit hours yet fails to complete all the
weeks of instructional time, the Secretary believes the student should
still be eligible to receive additional Federal Pell Grant funds during
an award year because the statute requires only that a student complete
the coursework for an academic year to be eligible for a second
Scheduled award, not the weeks of instructional time. The student would
receive the remaining amount of his or her first Scheduled Federal Pell
Grant award as he or she completes the weeks of instructional time in
the first academic year in the payment period in which the student
becomes eligible to receive funds from his or her second Scheduled
Federal Pell Grant award. In the example, a student would have \2/30\
of his or her first award remaining in a 12 semester-hour summer
session. The student would receive the \2/30\ balance of the first
award and \12/30\ of the second award in the summer session since under
Sec. 690.63(c) the payment for each payment period would be \14/30\ of
an annual award.
Changes: The Secretary adds a new section at Sec. 690.67 describing
the criteria under which a student may receive more than one Scheduled
Award in an award year. The Secretary provides that an institution may
determine which students are eligible for a second Scheduled Award in
accordance with these criteria set forth in Sec. 690.67.
Comments: Some commenters recommended that a student at a term
institution be required to complete the equivalent of a full academic
year of study in two semesters or trimesters or three quarters. The
student would then be eligible for a second Scheduled Award to pursue
additional work during a third semester or trimester or a fourth
quarter. It was further recommended that full-time study for a student
eligible to receive a second Scheduled Award in an award year be based
on the norms required to complete the student's program as published by
the institution. If the institutional norm was to complete 120 credits
of a baccalaureate degree in 4 years, the student would be required to
complete 30 credits during each academic year before he or she would be
eligible for a second Scheduled Award.
Discussion: Since a full-time student normally completes a full
academic year's worth of credit hours in two semesters or trimesters or
three quarters, the Secretary does not believe that it is necessary to
prescribe the number of terms over which the credits are earned. The
Secretary also believes that it would be unfair to establish an
academic year course load for a student using a criterion other than
the one established for all students in the same program of study as
long as the criterion met the minimum statutory requirement. A
requirement greater than that criterion would make it more difficult
for a student to qualify for a second Scheduled Award within an award
year. However, under section 401(b)(6) of the HEA, a student must
complete the coursework in an academic year before he or she can be
considered for a second Scheduled Award. In addition, the Secretary
believes that the student must be making satisfactory academic progress
at the time he or she receives a second Scheduled Award. Therefore,
this institution must verify, before disbursing funds from the second
Scheduled Award, that a student is making satisfactory progress in his
or her program of study under 34 CFR 668.7 and 668.16(e).
Changes: The Secretary has included provisions in Sec. 690.67 that
require a student to complete an academic year's coursework and to be
making satisfactory progress in his or her program of study to be
eligible to receive a second Scheduled Award from the Federal Pell
Grant Program.
Comments: One commenter specified that the additional coursework
for which a student enrolled should be coursework required for
completion of his or her associate or baccalaureate degree.
Discussion: The Secretary agrees that additional coursework funded
under this provision should be coursework that counts toward completion
of a student's associate or baccalaureate degree program. Such a
requirement is in keeping with the intent of this statutory provision
to provide a student a means to continue his or her education without
interruption throughout the pursuit of his or her associate or
baccalaureate degree program.
Changes: The Secretary requires that coursework funded by the
second Scheduled Award be either required courses or electives that
will be counted toward completion of the student's associate or
baccalaureate degree program.
Comments: Several commenters proposed methodologies to calculate
the additional Federal Pell Grant eligibility by using ratios based
either on the additional credits the student would take or, in the case
of a term institution, the additional terms in which the student would
enroll.
Discussion: The Secretary believes that the student's payment for a
payment period should be determined using an appropriate methodology
under Sec. 690.63 or Sec. 690.66. However, an institution must use the
same methodology to calculate the payment for a payment period for all
students in a program regardless of whether that calculation relates to
a first or second Scheduled Federal Pell Grant for an award year.
Changes: None.
Section 690.77 Initial Disbursement of a Federal Pell Grant in an
Award Year Without a Valid SAR or Valid Institutional Student
Information Record
Comments: In the notice of proposed rulemaking the Secretary
requested comment on whether to remove Sec. 690.77. Most commenters
supported removal of this section because the rapid delivery of ISIRs
through electronic means makes it unnecessary to make a first payment
to a student without a valid SAR or ISIR. One commenter believed that
elimination of this provision would reduce the cost and the burden of
trying to collect an overaward from a student who did not submit a
valid SAR after being paid. Two commenters believed that, while most
institutions did not make payments to students without a valid SAR or
ISIR, the provision should be retained. One commenter believed that the
provisions in this section were mandated in the Federal Pell Grant
Program statute.
One commenter, while not commenting on whether Sec. 690.77 should
be retained or removed, noted a difference in the liability language
between Secs. 690.77 (c)(1) and (c)(2). In Sec. 690.77(c)(1) an
institution is liable if it chooses to make a disbursement without a
valid SAR or valid ISIR. In Sec. 690.77(c)(2), both the student and the
institution are liable for a disbursement made without a valid SAR or
ISIR. The commenter believed that a student was not liable for an
overpayment in Sec. 690.77(c)(1) as he or she would be in
Sec. 690.77(c)(2). The commenter recommended that the language in the
two provisions be rewritten to make both the student and the
institution liable in Sec. 690.77(c)(1) if a student requested a first
disbursement without a valid SAR or ISIR and the institution could
document the student's request.
Discussion: Although one commenter believed that this provision was
mandated in the statute, the statute was changed in the 1992 Amendments
to eliminate the statutory charge that required the Secretary to allow
a payment of a Federal Pell Grant without a valid SAR or ISIR.
Furthermore, the Secretary agrees with the majority of commenters that
the provision is no longer necessary.
Since the Secretary believes that this provision is no longer
necessary, revisions to the provisions under this section are not
required.
Changes: The Secretary is removing Sec. 690.77 from the Federal
Pell Grant Program regulations.
Section 690.82 Maintenance and Retention of Records
Comments: Most commenters supported the Secretary's proposed change
in Sec. 690.82 that would eliminate the requirement in the Federal Pell
Grant Program to retain an SAR regardless of whether the student
received a Federal Pell Grant. Two commenters indicated that they
understood the intent of the change in this provision was to eliminate
the requirement to maintain eligibility documents for students
receiving aid from other title IV programs or for other title IV
program purposes. One other commenter, while supporting the reduction
in the Federal Pell Grant Program record keeping requirements,
recommended that the Secretary recognize that many institutions
participate in the Federal Pell Grant Program electronically and
maintain a computerized data base. The commenter suggested that those
institutions be allowed to maintain the data in an electronic format
rather than a paper one.
Discussion: The Secretary appreciates the public support of his
proposal to change the record retention requirements for the Federal
Pell Grant Program. The Secretary believes, however, that clarification
is necessary since two commenters were unclear as to the Secretary's
intent in making this change. Eliminating the requirement under the
Federal Pell Grant Program for retaining the SAR or ISIR, regardless of
whether the student received a Federal Pell Grant, does not eliminate
the requirement to retain an SAR or ISIR if it has been used as an
eligibility document to determine and pay a student Federal student aid
under another title IV program or if the information was required to
complete the institution's Fiscal Operations Application Report for the
campus-based programs. The change would eliminate the need to retain an
SAR or ISIR if an institution did not use it as an eligibility
document, the student did not receive a Federal Pell Grant, another
document had been used to award other title IV, HEA assistance, or the
student was ineligible for title IV, HEA assistance.
The Secretary also agrees that it is reasonable to retain many of a
student's financial aid documents in media formats other than paper.
However, since the electronic technology is changing so quickly the
Secretary believes that he should publish periodically, in a notice, a
compilation of acceptable media storage formats and the documents that
can be stored in those formats.
Changes: The Secretary has added a provision in Sec. 690.82(e) to
allow for the retention of information in media formats acceptable to
the Secretary other than microform and the original documents. The
Secretary will publish in the Federal Register a listing of the media
formats and the documents that can be retained using those formats.
Comments: One commenter indicated that although the Secretary
required an institution to retain a student's application for Federal
student aid when his or her application information was submitted
electronically to the Secretary, the regulations at Sec. 690.82 did not
specify a record retention requirement for the application. The
commenter stated that the regulations should clarify: (1) How long the
application must be retained; (2) the circumstances under which an
application must be retained; and (3) what constitutes an acceptable
application for retention purposes (e.g., a Free Application for
Federal Student Aid or a printout of an electronic application).
Discussion: The commenter is correct that the Secretary requires
retention of any paper application signed by the student, and by one of
his or her parents if the student is dependent, when that application
is submitted to the Secretary electronically from an institution or its
agent. The Secretary requires that the application be retained for all
students whose applications were submitted from that institution and
were processed by the Secretary regardless of whether the student
attends that institution or receives title IV, HEA assistance. While
the regulations have not been specific on the institutional
responsibilities concerning retention of a student's application at the
point of submission, the Secretary requires an institution, as part of
its agreement to participate in EDE, to retain an application when the
application information is submitted electronically to the central
processor. However, the Secretary believes that the commenter is
correct in questioning what the Secretary requires of an institution
under such circumstances.
Changes: The Secretary has added a document maintenance requirement
at Sec. 690.82(b) for institutions that transmit electronically the
application information to the Secretary. The signed application and
signed copies of any corrections to application information must be
retained any time an institution submits that application information
electronically to the Secretary and the application information is
processed by the Secretary, regardless of whether the student attends
the institution or is eligible to receive a Federal Pell Grant.
Presidential Access Scholarship Program
Comments: Commenters generally commended the Secretary for his
proposal to incorporate the Presidential Access Scholarship (PAS)
Program into the Federal Pell Grant Program delivery system as a way to
eliminate additional burden on institutions.
Discussion: None.
Changes: None.
Section 691.16 Eligibility Requirements To Receive an Award
Comments: One of the criteria to determine eligibility to receive a
PAS is to have ranked in the top 10 percent, by grade point average, of
a student's secondary school graduating class. A commenter believed
that the requirement to graduate in the top 10 percent of a student's
class should be further defined so that students graduating in very
small classes, who might have to study harder to be in the top 10
percent, would be treated equally with students graduating from larger
classes. Another commenter requested that the Secretary clarify what
determines that a student has graduated in the top 10 percent of his or
her high school class.
Discussion: Section 406C of the 1992 Amendments requires that for a
student to be eligible he or she either (a) participate in an eligible
early-intervention program for a minimum of 36 months or (b) graduate
in the top 10 percent, by grade point average, of his or her high
school class. To determine whether a student is in the top 10 percent
of his or her graduating class, the number of students in the
graduating class is multiplied by .1. For example, if there are 250
students in the graduating class, 25 (250 x.1) are graduating in the
top 10 percent of the class. If a student's high school does not rank
its students, a student may only be considered eligible if the
institution can factually and statistically document that the student
would rank in the top 10 percent of graduating high school students
statewide in his or her state. The institution may also consider the
student's application if he or she has a GED test score equivalent to
ranking in the top 10 percent of the GED test scores in the State.
Changes: None.
Section 691.61 Disbursement Conditions and Deadlines
Comments: The PAS Program regulations require that a student
present written documentation that he or she has participated in an
approved, eligible early-intervention program for at least 36 months or
that he or she qualifies for a waiver under Sec. 690.16(b) of the
regulations. Several commenters requested clarification of the type of
documentation the student must present to demonstrate that he or she
has met these requirements. Another commenter recommended that to
minimize the burden on institutions the student be required to submit
documentation to determine participation in an eligible early-
intervention program with his or her application for a Federal Pell
Grant and PAS. This commenter believed that, in addition to lessening
the burden on institutions, keeping this information with the central
processor would allow the Secretary to keep track of eligible students
more easily.
Discussion: An example of the documentation that a student can
provide to establish that he or she participated in an eligible early
intervention program would be a letter from the program director
certifying that the student participated for at least 36 months in the
eligible program. The documentation can be collected at the institution
at the time the student applies to the institution for financial aid;
thus, an unnecessary burden is not placed on an institution to request
and maintain a certificate from a student indicating that he or she has
participated in an eligible early-intervention program. In addition, a
separate certificate could not be processed with the application for
calculating a student's EFC since it is not relevant to calculating the
student's EFC.
Changes: None.
Section 691.77 Initial Disbursement of a PAS in an Award Year Without
a Valid SAR or Institutional Student Information Record
Comments: Several commenters indicated that, if this provision is
removed from the Federal Pell Grant Program regulations because the
provision was no longer necessary for the Federal Pell Grant Program,
the Secretary should remove it from the PAS Program for similar
reasons.
Discussion: The Secretary agrees that, since the section is being
removed from the Federal Pell Grant Program, there is no need to retain
the section under Sec. 691.77.
Changes: Section 691.77 is removed from the final PAS Program
regulations and reserved.
Executive Order 12866
These final regulations have been reviewed in accordance with
Executive Order 12866. Under the terms of the order the Secretary has
assessed the potential costs and benefits of this regulatory action.
The potential costs associated with the final regulations are those
resulting from statutory requirements and those determined by the
Secretary to be necessary for administering this program effectively
and efficiently. Burdens specifically associated with information
requirements, if any, are identified and explained elsewhere in this
preamble under the heading Paperwork Reduction Act of 1980.
In assessing the potential costs and benefits--both quantitative
and qualitative--of these final regulations, the Secretary has
determined that the benefits of the final regulations justify the
costs.
The Secretary has also determined that this regulatory action does
not unduly interfere with State, local, and tribal governments in the
exercise of their governmental functions.
Paperwork Reduction Act of 1980
Sections 690.12, 690.13, 690.67, 690.75, 690.82, 691.61, 691.73,
691.82, and 691.83 contain information collection requirements. As
required by the Paperwork Reduction Act of 1980, the U.S. Department of
Education will submit a copy of these sections to the Office of
Management and Budget (OMB) for its review.
(44 U.S.C. 3504(h))
These regulations affect businesses or other for-profit
organizations and nonprofit institutions that are eligible to
participate in the title IV, HEA programs. The Department needs and
uses the information to implement the 1992 Amendments for the Federal
Pell Grant Program and PAS Program. The regulations provide the
requirements that States, institutions, and students must follow to
participate in these programs.
Federal Pell Grant
Annual public reporting and recordkeeping burden for this
collection of information is reduced by 1140 hours because of the
elimination of state recordkeeping and reporting requirements for 57
States and territories with enactment on September 13, 1994 of the
Violent Crime and Law Enforcement Act of 1994 which amends section
401(b)(8) of the Higher Education Act of 1965, as amended.
Presidential Access Scholarship Program
Annual public reporting and recordkeeping burden for this
collection of information is estimated to average 40 hours per response
for 57 States and territories and 2,280 total hours per year, including
the time for reviewing instructions, searching existing data sources,
gathering and maintaining the data needed, and completing and reviewing
the collection of information.
Annual approved public reporting and recordkeeping burden for this
collection of information is: (1) 3 hours per response for 57 States
and territories; and (2) 3 hours per response for 10,000 institutions.
The approved total hours for States and institutions are 30,971 hours
per year including the time for reviewing instructions, searching
existing data sources, gathering and maintaining the data needed, and
completing and reviewing the collection of information.
Organizations and individuals desiring to submit comments on the
information collection requirements should direct them to the Office of
Information and Regulatory Affairs, OMB, Room 3002, New Executive
Office Building, Washington, DC 20503; Attention: Daniel J. Chenok.
Assessment of Educational Impact
In the notice of proposed rulemaking, the Secretary requested
comments on whether the proposed regulations would require transmission
of information that is being gathered by or is available from any other
agency or authority of the United States.
Based on the response to the proposed rules and on its own review,
the Department has determined that the regulations in this document do
not require transmission of information that is being gathered by or is
available from any other agency or authority of the United States.
List of Subjects in 34 CFR Part 690
Administrative practice and procedure, Colleges and universities,
Education, Grant programs--education, Reporting and recordkeeping
requirements, Student aid.
List of Subjects in 34 CFR Part 691
Administrative practice and procedure, Colleges and universities,
Education, Grant programs--education, Reporting and recordkeeping
requirements, Student aid.
(Catalog of Federal Domestic Assistance (CFDA) Numbers: 84.063
Federal Pell Grant Program; Catalog of Federal Domestic Assistance
Number for the Presidential Access Scholarship Program has not been
assigned.)
Dated: September 27, 1994.
Richard W. Riley,
Secretary of Education.
The Secretary amends title 34 of the Code of Federal Regulations by
amending part 690 and adding a new part 691 as follows:
PART 690--[AMENDED]
1. The authority citation for part 690 is revised to read as
follows:
Authority: 20 U.S.C. 1070a, unless otherwise noted.
2. The heading for part 690 is revised to read as follows:
PART 690--FEDERAL PELL GRANT PROGRAM
Secs. 690.1, 690.2, 690.3, 690.6, 690.7, 690.9, 690.10, 690.11, subpart
F, 690.62, 690.64, 690.65, 690.71, 690.72, 690.74, 690.75, 690.78,
690.79, 690.81, and 690.83. [Amended]
3. In part 690 add the word ``Federal'' before the words ``Pell
Grant'' in the following places:
(a) Section 690.1;
(b) Section 690.2(c) under the terms ``Disbursement Schedule'' and
``Scheduled Pell Grant'';
(c) Section 690.3(a)(2)(ii);
(d) Section 690.6 (a) and (e);
(e) Section 690.7(a)(1) introductory text, (a)(2) (twice), (b)
introductory text (twice), (c)(2), (c)(3), and (c)(4);
(f) Section 690.9(a) introductory text, (a)(1) (twice), (a)(2)
introductory text, and (a)(2)(ii);
(g) Section 690.10 (a) and (b);
(h) Section 690.11 heading and text;
(i) Subpart F heading;
(j) Section 690.62(a);
(k) Section 690.64 heading and paragraphs (a)(2) and (b);
(l) Section 690.65(d) introductory text (twice), (d)(1) (twice),
(d)(3), and (e) (three times);
(m) Section 690.71;
(n) Section 690.72(a);
(o) Section 690.75(a) introductory text, (a)(3)(i), (a)(3)(ii),
(c), and (d) (twice);
(p) Section 690.78(c) introductory text;
(q) Section 690.79(a)(1) and (a)(2);
(r) Section 690.81(a)(2) and (b) (twice); and
(s) Section 690.83(a)(1) introductory text, (b)(1), and (c)(2).
Secs. 690.74 and 690.81 [Amended]
4. In part 690 add the word ``Federal'' before the words ``Pell
Grants'' in the following places:
(a) Section 690.74 (twice); and
(b) Section 690.81(c).
Sec. 690.2 [Amended]
5. and 6. Section 690.2 paragraph (a) is amended by removing in
alphabetical order the terms ``One-year training program'', ``Program
of study by correspondence'', Proprietary institution of higher
education'', ``Postsecondary vocational institution'', and ``Six-month
training program'', and adding in alphabetical order the terms ``Award
year'', ``Correspondence course'', ``Regular student'', and ``State''.
Sec. 690.2 [Amended]
7. Section 690.2 paragraph (b) is amended by adding in alphabetical
order the terms ``Federal Pell Grant Program'', ``Federal Perkins Loan
Program'', ``Federal Supplemental Educational Opportunity Grant
Program'', ``Federal Work-Study Program'', ``Full-time student'', and
``HEA'', and removing the terms ``Award year'', ``College Work-Study
Program'', ``Income Contingent Loan (ICL) Program'', ``Perkins Loan
Program'', ``Public or private nonprofit institution of higher
education'', ``Pell Grant Program'', ``Regular student'', ``State'',
and ``Supplemental Educational Opportunity Grant Program''.
8. Section 690.2 paragraph (c) is amended by removing the
definitions of ``Full-time student'', ``Pell Grant Index'', and
``Student Aid Report (SAR) Payment Document''; by adding, in
alphabetical order, new definitions of ``Annual award'', ``Central
processor'', ``Expected family contribution'', ``Institutional Student
Information Record (ISIR)'', ``Less-than-half-time student'', ``Payment
Voucher'', and ``Valid Institutional Student Information Record (valid
ISIR)''; and by revising introductory text and paragraphs (1) and (2)
of the definition of ``Disbursement Schedule'', and revising
``Electronic Data Exchange'', ``Enrollment status'', ``Payment
Schedule''; and ``Valid Student Aid Report'' to read as follows:
Sec. 690.2 General definitions.
* * * * *
(c) * * *
Annual award: The Federal Pell Grant award amount a full-time
student would receive under the Payment Schedule for a full award year,
and the amount a three-quarter-time, half-time, and less-than-half-time
student would receive under the appropriate Disbursement Schedule for a
full award year.
Central processor: An organization under contract with the
Secretary that calculates an applicant's expected family contribution
based on the applicant's application information, transmits an ISIR to
each institution designated by the applicant, and submits reports to
the Secretary on the correctness of its computations of the expected
family contribution amounts and the accuracy of the answers to
questions on application forms for the previous award year cycle.
* * * * *
Disbursement Schedule: A table showing the annual awards that
three-quarter, half-time, and less-than-half-time students at term-
based institutions using credit hours would receive for an academic
year. This table is published annually by the Secretary and is based
on--
(1) A student's expected family contribution, as determined in
accordance with title IV, part F of the HEA; and
(2) A student's attendance costs as defined in title IV, part F of
the HEA.
* * * * *
Electronic Data Exchange: An electronic exchange system between the
central processor and an institution under which--
(1) A student is able to transmit his or her application
information to the central processor through his or her institution and
an ISIR is transmitted back to the institution;
(2) A student through his or her institution is able to transmit
any changes in application information to the central processor; and
(3) An institution is able to receive an ISIR from the central
processor for a student.
Enrollment status: Full-time, three-quarter-time, half-time, or
less-than-half-time depending on a student's credit-hour work load per
academic term at an institution using semesters, trimesters, quarters,
or other academic terms and measuring progress by credit hours.
* * * * *
Expected family contribution (EFC): The amount, determined under
title IV, part F of the HEA, which the student and the student's family
may be reasonably expected to contribute toward the student's
postsecondary education for the academic year.
* * * * *
Institutional Student Information Record (ISIR): A paper document
or a computer-generated electronic record that the central processor
transmits to an institution that includes an applicant's--
(1) Personal identification information;
(2) Application data used to calculate the applicant's EFC; and
(3) EFC calculated by the central processor.
Less-than-half-time student: An enrolled student who is carrying
less than half the work load of the appropriate minimum requirement
outlined in the institution's definition of a full-time student.
* * * * *
Payment Schedule: A table showing a full-time student's Scheduled
Federal Pell Grant for an academic year. This table, published annually
by the Secretary, is based on--
(1) The student's expected family contribution, as determined in
accordance with part F of title IV of the HEA; and
(2) The student's cost of attendance as defined in part F of title
IV of the HEA.
* * * * *
Payment Voucher: An electronic or magnetic record, or for the 1995-
96 award year a paper record, that is provided to the Secretary by an
institution showing a student's expected family contribution, cost of
attendance, enrollment status, and student disbursement information.
* * * * *
Valid Institutional Student Information Record (valid ISIR): An
ISIR on which all the information used in calculating the applicant's
expected family contribution is accurate and complete as of the date
the application is signed.
* * * * *
Valid Student Aid Report: A Student Aid Report on which all of the
information used in calculating the applicant's expected family
contribution is accurate and complete as of the date the application is
signed.
9. Section 690.3 is amended by revising the section heading and
paragraphs (b)(1), (b)(2), and (b)(3), to read as follows:
Sec. 690.3 Payment period.
* * * * *
(b) Payment periods for an eligible program that does not have
academic terms: (1) For a student whose eligible program is one
academic year or less--
(i) The first payment period is the period of time in which the
student completes the first half of his or her program as measured in
credit or clock hours; and
(ii) The second payment period is the period of time in which the
student completes the second half of his or her program as measured in
credit or clock hours; or
(2) For a student whose eligible program is more than one academic
year--
(i) For the first academic year, the first payment period is the
period of time in which the student completes the first half of his or
her academic year as measured in credit or clock hours, and the second
payment period is the period of time in which the student completes the
second half of that academic year.
(ii) For subsequent academic years, each payment period is the
period of time in which the student first completes--
(A) One half of the academic year; or
(B) The remainder of the student's program.
(3) For purposes of paragraphs (b)(1) and (b)(2) of this section,
at an institution measuring progress in credit hours, if a student
cannot earn half of his or her credits in the program under paragraph
(b)(1) of this section or the academic year under paragraph (b)(2) of
this section until after the midpoint between the first and last
scheduled days of class, the student is considered to begin his or her
second payment period on the later of--
(i) The calendar midpoint between the first and last scheduled days
of class of the program or academic year; or
(ii) The date, as determined by the institution, that the student
has completed half of his or her academic coursework.
* * * * *
10. Section 690.6 is amended by removing paragraphs (c), (d), and
(e), and by adding a second sentence to paragraph (b) to read as
follows:
Sec. 690.6 Duration of student eligibility.
* * * * *
(b) * * * Any noncredit or remedial course taken by a student,
including a course in English language instruction, is not included in
the institution's determination of that student's period of Federal
Pell Grant eligibility.
(Authority: 20 U.S.C. 1070a)
11. Section 690.8 is amended by revising paragraphs (c) and (d) to
read as follows:
Sec. 690.8 Enrollment status for students taking regular and
correspondence courses.
* * * * *
(c)(1) Notwithstanding the limitation in paragraph (b)(3) of this
section, a student who would be a half-time student based solely on his
or her correspondence work is considered a half-time student unless the
calculation in paragraph (b) of this section produces an enrollment
status greater than half-time.
(2) A student who would be a less-than-half-time student based
solely on his or her correspondence work or a combination of
correspondence work and regular course work is considered a less-than-
half-time student.
(d) The following chart provides examples of the rules set forth in
this section. It assumes that the institution defines full-time
enrollment as 12 credits per term, making the half-time enrollment
equal to 6 credits per term.
----------------------------------------------------------------------------------------------------------------
Total course
load in credit
No. of credit No. of credit hours to
Under Sec. 690.8 hours regular hours determine Enrollment status
work correspondence enrollment
status
----------------------------------------------------------------------------------------------------------------
(b)(3)............................... 3 3 6 Half-time.
(b)(3)............................... 3 6 6 Half-time.
(b)(3)............................... 3 9 6 Half-time.
(b)(3)............................... 6 3 9 Three-quarter-time.
(b)(3)............................... 6 6 12 Full-time.
(b)(3) and (c)....................... 2 6 6 Half-time.
(c)\1\............................... .............. .............. ................ Less-than-half-time.
----------------------------------------------------------------------------------------------------------------
\1\Any combination of regular and correspondence work that is greater than 0, but less than 6 hours.
12. Section 690.10 is amended by revising the authority citation at
the end of the section, and by adding a new paragraph (c) to read as
follows:
Sec. 690.10 Administrative cost allowance to participating schools.
* * * * *
(c) If an institution enrolls a significant number of students who
are attending less-than-full-time or are independent students, the
institution shall use a reasonable proportion of these funds to make
financial aid services available during times and in places that will
most effectively accommodate the needs of those students.
(Authority: 20 U.S.C. 1096)
13. Section 690.12 is amended by removing paragraph (c), by
redesignating paragraph (b) as paragraph (c), by revising paragraph
(a), and by adding a new paragraph (b) to read as follows:
Sec. 690.12 Application.
(a) As the first step to receiving a Federal Pell Grant, a student
shall apply on an approved application form to the Secretary to have
his or her expected family contribution calculated. A copy of this form
is not acceptable.
(b) The student shall submit an application to the Secretary by--
(1) Providing a copy of the application form, signed by all
appropriate family members, to the institution at which the student
attends or plans to attend so that the institution can transmit
electronically the application information to the Secretary under EDE;
or
(2) Mailing the paper application form to the Secretary.
* * * * *
(Authority: 20 U.S.C. 1070a)
14. Section 690.13 is revised to read as follows:
Sec. 690.13 Notification of expected family contribution.
(a) Beginning with the 1996-97 award year, the Secretary sends a
student's application information and EFC as calculated by the central
processor to each student and an ISIR to each institution designated by
the applicant.
(b) For the 1995-96 award year, an institution participating in EDE
shall provide a copy of a student's application information and EFC as
calculated by the central processor to the student for whom it has
transmitted the student's application information to the central
processor.
(Authority: 20 U.S.C 1070a)
15. Section 690.14 is amended by revising the title of the section
heading, and paragraph (c) is revised and redesignated as paragraph (b)
to read as follows:
Sec. 690.14 Request for recalculation of expected family contribution
because of clerical or arithmetic error.
* * * * *
(b) (1) If a student believes that a clerical or arithmetic error
produced an inaccurate expected family contribution determination, the
student may request a recalculation of that expected family
contribution by submitting that request to the Secretary.
(2) A student makes that request by--
(i) Having his or her institution transmit that request under EDE
to the Secretary; or
(ii) Mailing an approved form, certified by the student, and if the
student is a dependent student, one of the student's parents, directly
to the Secretary.
(3) If an institution transmits electronically the student's
recalculation request to the Secretary, the corrected information must
be supported by--
(i) Information contained on an approved form, that is certified by
the student, and if the student is a dependent student, one of the
student's parents; or
(ii) Verification documentation provided by a student under 34 CFR
668.57.
(4) The recalculation request must be received by the Secretary no
later than the deadline date established by the Secretary through
publication in the Federal Register.
(Authority: 20 U.S.C. 1070a)
16. Subpart C is removed and reserved.
17. Section 690.61 is revised to read as follows:
Sec. 690.61 Submission process and deadline for a Student Aid Report
or Institutional Student Information Record.
(a) Submission process. (1) Except as provided in paragraph (a)(2)
of this section, an institution must disburse a Federal Pell Grant to
an eligible student who is otherwise qualified to receive that
disbursement if--
(i) The student submits a valid SAR to the institution; or
(ii) The institution--
(A) Obtains a valid ISIR for that student; and
(B) For the 1995-96 award year, electronically or magnetically
transmits Federal Pell Grant disbursement data to the Secretary.
(2) In determining a student's eligibility to receive his or her
Federal Pell Grant, an institution is entitled to assume that SAR
information or ISIR information is accurate and complete except under
the conditions set forth in 34 CFR 668.16(f) and 668.60.
(b) Student Aid Report or Institutional Student Information Record
deadline. Except as provided in 34 CFR 668.60, for a student to receive
a Federal Pell Grant for an award year, the student must submit the
relevant parts of the SAR to his or her institution or the institution
must obtain a valid ISIR by the earlier of--
(1) The last date that the student is still enrolled and eligible
for payment at that institution; or
(2) June 30 of that award year.
(Authority: 20 U.S.C 1070a)
18. Section 690.62 is amended by revising the title of the section
heading, by removing paragraph (c), and by revising paragraph (b) to
read as follows:
Sec. 690.62 Calculation of a Federal Pell Grant.
* * * * *
(b) No payment may be made to a student if the student's annual
award is less than $200. However, a student who is eligible for an
annual award that is equal to or greater than $200, but less than or
equal to $400, shall be awarded a Federal Pell Grant of $400.
19. Section 690.63 is revised to read as follows:
Sec. 690.63 Calculation of a Federal Pell Grant for a payment period.
(a)(1) Programs using standard terms with at least 30 weeks of
instructional time. A student's Federal Pell Grant for a payment period
is calculated under paragraphs (b) or (d) of this section if--
(i) The student is enrolled in an eligible program that--
(A) Measures progress in credit hours;
(B) Is offered in semesters, trimesters, or quarters;
(C) Requires the student to enroll for at least 12 credit hours in
each term in the award year to qualify as a full-time student; and
(D) Is not offered with overlapping terms; and
(ii) The institution offering the program--
(A) Provides the program using an academic calendar that includes
two semesters or trimesters in the fall through the following spring,
or three quarters in the fall, winter, and spring; and
(B) Provides at least 30 weeks of instructional time in the terms
specified in paragraph (a)(1)(ii)(A) of this section.
(2) Programs using standard terms with less than 30 weeks of
instructional time. A student's Federal Pell Grant for a payment period
is calculated under paragraph (c) or (d) of this section if--
(i) The student is enrolled in an eligible program that--
(A) Measures progress in credit hours;
(B) Is offered in semesters, trimesters, or quarters;
(C) Requires the student to enroll in at least 12 credit hours in
each term in the award year to qualify as a full-time student; and
(D) Is not offered with overlapping terms; and
(ii) The institution offering the program--
(A) Provides the program using an academic calendar that includes
two semesters or trimesters in the fall through the following spring,
or three quarters in the fall, winter, and spring; and
(B) Does not provide at least 30 weeks of instructional time in the
terms specified in paragraph (a)(2)(ii)(A) of this section.
(3) Other programs using terms and credit hours. A student's
Federal Pell Grant for a payment period is calculated under paragraph
(d) of this section if the student is enrolled in an eligible program
that--
(i) Measures progress in credit hours; and
(ii) Is offered in academic terms other than those described in
paragraphs (a)(1) and (a)(2) of this section.
(4) Programs not using terms or using clock hours. A student's
Federal Pell Grant for any payment period is calculated under paragraph
(e) of this section if the student is enrolled in an eligible program
that--
(i) Is offered in credit hours but is not offered in academic
terms; or
(ii) Is offered in clock hours.
(5) Programs of study offered by correspondence. A student's
Federal Pell Grant payment for a payment period is calculated under
Sec. 690.66 if the program is offered by correspondence courses.
(6) Programs for which an exception to the academic year definition
has been granted under 34 CFR 668.3. If an institution receives a
waiver from the Secretary of the 30 weeks of instructional time
requirement under 34 CFR 668.3, an institution may calculate a
student's Federal Pell Grant payment for a payment period using the
following methodologies:
(i) If the program is offered in terms and credit hours, the
institution uses the methodology in--
(A) Paragraph (b) of this section provided that the program meets
all the criteria in paragraph (a)(1) of this section, except that in
lieu of paragraph (a)(1)(ii)(B) of this section, the program provides
at least the same number of weeks of instructional time in the terms
specified in paragraph (a)(1)(ii)(A) of this section as are in the
program's academic year; or
(B) Paragraph (d) of this section.
(ii) The institution uses the methodology described in paragraph
(e) of this section if the program is offered in credit hours without
terms or clock hours.
(iii) The institution uses the methodology described in Sec. 690.66
if the program is correspondence study.
(b) Programs using standard terms with at least 30 weeks of
instructional time. The Federal Pell Grant for a payment period, i.e.,
an academic term, for a student in a program using standard terms with
at least 30 weeks of instructional time in two semesters or trimesters
or in three quarters as described in paragraph (a)(1)(ii)(A) of this
section, is calculated by--
(1) Determining his or her enrollment status for the term;
(2) Based upon that enrollment status, determining his or her
annual award from the Payment Schedule for full-time students or the
Disbursement Schedule for three-quarter-time, half-time, or less-than-
half-time students; and
(3) Dividing the amount described under paragraph (b)(2) of this
section by--
(i) Two at institutions using semesters or trimesters or three at
institutions using quarters; or
(ii) The number of terms over which the institution chooses to
distribute the student's annual award if--
(A) An institution chooses to distribute all of the student's
annual award determined under paragraph (b)(2) of this section over
more than two terms at institutions using semesters or trimesters or
more than three quarters at institutions using quarters; and
(B) The number of weeks of instructional time in the terms,
including the additional term or terms, equals the weeks of
instructional time in the program's academic year.
(c) Programs using standard terms with less than 30 weeks of
instructional time. The Federal Pell Grant for a payment period, i.e.,
an academic term, for a student in a program using standard terms with
less than 30 weeks of instructional time in two semesters or trimesters
or in three quarters as described in paragraph (a)(2)(ii)(A) of this
section, is calculated by--
(1) Determining his or her enrollment status for the term;
(2) Based upon that enrollment status, determining his or her
annual award from the Payment Schedule for full-time students or the
Disbursement Schedule for three-quarter-time, half-time, or less-than-
half-time students;
(3) Multiplying his or her annual award determined under paragraph
(c)(2) of this section by the following fraction as applicable:
In a program using semesters or trimesters--
The number of weeks of instructional time offered in the program in the
fall and spring semesters
-------------------------------------------------------------------------
The number of weeks in the program's academic year
; or
In a program using quarters--
The number of weeks of instructional time offered in the program in the
fall, winter, and spring quarters
-------------------------------------------------------------------------
The number of weeks in the program's academic year
; and
(4)(i) Dividing the amount determined under paragraph (c)(3) of
this section by two for programs using semesters or trimesters or three
for programs using quarters; or
(ii) Dividing the student's annual award determined under paragraph
(c)(2) of this section by the number of terms over which the
institution chooses to distribute the student's annual award if--
(A) An institution chooses to distribute all of the student's
annual award determined under paragraph (c)(2) of this section over
more than two terms for programs using semesters or trimesters or more
than three quarters for programs using quarters; and
(B) The number of weeks of instructional time in the terms,
including the additional term or terms, equals the weeks of
instructional time in the program's academic year definition.
(d) Other programs using terms and credit hours. The Federal Pell
Grant for a payment period, i.e., an academic term, for a student in a
program using terms and credit hours, other than those described in
paragraphs (a)(1) or (a)(2) of this section, is calculated by--
(1)(i) For a student enrolled in a semester, trimester, or quarter,
determining his or her enrollment status for the term; or
(ii) For a student enrolled in a term other than a semester,
trimester, or quarter, determining his or her enrollment status for the
term by--
(A) Dividing the number of weeks of instructional time in the term
by the number of weeks of instructional time in the program's academic
year;
(B) Multiplying the fraction determined under paragraph
(d)(1)(ii)(A) of this section by the number of credit hours in the
program's academic year to determine the number of hours required to be
enrolled to be considered a full-time student; and
(C) Determining a student's enrollment status by comparing the
number of hours in which the student enrolls in the term to the number
of hours required to be considered full-time under paragraph
(d)(1)(ii)(B) of this section for that term;
(2) Based upon that enrollment status, determining his or her
annual award from the Payment Schedule for full-time students or the
Disbursement Schedule for three-quarter-time, half-time, or less-than-
half-time student;
(3) Multiplying his or her annual award determined under paragraph
(d)(2) of this section by the following fraction:
The number of weeks of instructional time in the term
-------------------------------------------------------------------------
The number of weeks of instructional time in the program's academic year
; and
(4) Paying the student the amount determined under paragraph (d)(3)
of this section.
(e) Programs using clock hours or credit hours without terms. The
Federal Pell Grant for a payment period for a student in a program
using credit hours without terms or using clock hours is calculated
by--
(1) Determining the student's Scheduled Federal Pell Grant using
the Payment Schedule;
(2) Multiplying the amount determined under paragraph (e)(1) of
this section by the lesser of--
(i) The number of weeks of instructional time required for a full-time
student to complete the lesser of the clock or credit hours in the
program or the academic year
-------------------------------------------------------------------------
The number of weeks of instructional time in the program's academic year
; or
(ii) One; and
(3) Multiplying the amount determined under paragraph (e)(2) of
this section by--
The number of credit or clock hours in a payment period
-------------------------------------------------------------------------
The number of credit or clock hours in the program's academic year
(f) A single disbursement may not exceed 50 percent of any award
determined under paragraph (d) or (e) of this section. If a payment for
a payment period calculated under paragraphs (d) or (e) of this section
would require the disbursement of more than 50 percent of a student's
annual award in that payment period, the institution shall make at
least two disbursements to the student in that payment period. The
institution may not disburse an amount that exceeds 50 percent of the
student's annual award until the student has completed the period of
time in the payment period that equals, in terms of weeks of
instructional time, 50 percent of the weeks of instructional time in
the program's academic year.
(g)(1) Notwithstanding paragraphs (b), (c), (d), and (e) of this
section and 34 CFR 668.66, the amount of a student's award for an award
year may not exceed his or her Scheduled Federal Pell Grant award for
that award year except as provided in Sec. 690.67.
(2) For purposes of this section and Sec. 690.66, an institution
must define an academic year for each of its eligible programs in terms
of the number of credit or clock hours and weeks of instructional time
in accordance with the requirements of 34 CFR 668.2 and 668.3.
20. Section 690.64 is amended by removing paragraph (c).
21. Section 690.65 is amended by revising paragraphs (a), (c), and
(f) to read as follows:
Sec. 690.65 Transfer student: attendance at more than one institution
during an award year.
(a) If a student who receives a Federal Pell Grant at one
institution subsequently enrolls at a second institution in the same
award year, the student may receive a Federal Pell Grant at the second
institution only if--
(1) The student submits a valid SAR to the second institution; or
(2) The second institution obtains a valid ISIR.
* * * * *
(c) The second institution may pay a Federal Pell Grant only for
that portion of the academic year in which a student is enrolled at
that institution. The grant amount must be adjusted, if necessary, to
ensure that the grant does not exceed the student's Scheduled Federal
Pell Grant for that award year except as provided under Sec. 690.67.
* * * * *
(f) A transfer student shall repay any amount received in an award
year that exceeds--
(1) His or her Scheduled Federal Pell Grant; or
(2) The amount which he or she was eligible to receive for the
award year under Sec. 690.67.
22. Section 690.66 is revised to read as follows:
Sec. 690.66 Correspondence study.
(a) An institution calculates the Federal Pell Grant for a payment
period for a student in a program of study offered by correspondence
courses without terms, but not including any residential component by--
(1) Determining the student's annual award using the half-time
Disbursement Schedule;
(2) Determining the length of the correspondence program in weeks
of instructional time by--
(i) Preparing a written schedule for submission of lessons that
reflect a workload of at least 12 hours of preparation per week; and
(ii) Determining the number of weeks of instructional time in the
program of study using the written schedule for submission of lessons;
(3) Multiplying the annual award determined from the Disbursement
Schedule for a half-time student by the lesser of--
(i) The number of weeks of instructional time as determined under
paragraph (a)(2)(ii) of this section for a student to complete the
lesser of the credit hours in the program or the academic year
-------------------------------------------------------------------------
The number of weeks of instructional time in the program's academic year
definition
; or
(ii) One; and
(4) Multiplying the amount determined under (a)(3) of this section
by--
The number of credit hours in the payment period
-------------------------------------------------------------------------
The number of credit hours in the program's academic year
(b) For purposes of paragraph (a) of this section--
(1) An academic year as measured in credit hours must consist of 2
payment periods--
(i) The first payment period must be the period of time in which
the student completes the lesser of the first half of his or her
academic year or program; and
(ii) The second payment period must be the period of time in which
the student completes the lesser of the second half of the academic
year or program; and
(2)(i) The institution shall make the first payment to a student
for an academic year, as calculated under paragraph (a)(4) of this
section, after the student submits 25 percent of the lessons or
otherwise completes 25 percent of the work scheduled for the program or
the academic year, whichever occurs last; and
(ii) The institution shall make the second payment to a student for
an academic year, as calculated under (a)(4) of this section, after the
student submits 75 percent of the lessons or otherwise completes 75
percent of the work scheduled for the program or the academic year,
whichever occurs last.
(c) In a program of correspondence study offered by correspondence
courses using terms but not including any residential component--
(1) The institution must prepare a written schedule for submission
of lessons that reflects a workload of at least 30 hours of preparation
per semester hour or 20 hours of preparation per quarter hour during
the term;
(2)(i) If the student is enrolled in at least 6 credit hours that
commence and are completed in that term, the Disbursement Schedule for
a half-time student is used; or
(ii) If the student is enrolled in less than 6 credit hours that
commence and are completed in that term the Disbursement Schedule for a
less-than-half-time student is used;
(3) A payment for a payment period is calculated using the formula
in Sec. 690.63(d) except that paragraphs (c) (1) and (2) of this
section are used in lieu of Sec. 690.63(d) (1) and (2) respectively;
and
(4) The institution shall make the payment to a student for a
payment period after that student completes 50 percent of the lessons
or otherwise completes 50 percent of the work scheduled for the term,
whichever occurs last.
(d) Payments for periods of residential training shall be
calculated under Sec. 690.63(d) if the residential training is offered
using terms and credit hours or Sec. 690.63(e) if the residential
training is offered using credit hours without terms.
23. A new section 690.67 is added to Subpart F to read as follows:
Sec. 690.67 Receiving up to two Scheduled Federal Pell Grant awards
during a single award year.
(a) The Secretary announces in the Federal Register whether an
institution may award up to a second Scheduled Federal Pell Grant to a
student in a particular award year.
(b) Based on the announcement described in paragraph (a) of this
section, an institution may award up to a second Scheduled Federal Pell
Grant award to a student in that award year if--
(1) The student is enrolled as a full-time student in an eligible
program that is at least 2 academic years as measured in credit hours
and weeks of instructional time and leads to an associate or
baccalaureate degree at an institution;
(2) The student is enrolled only in coursework required for
completing his or her associate or baccalaureate degree, including
courses in his or her major area of study or electives that fulfill the
student's graduation requirements, during any payment period in which
the student is paid any portion of his or her second Scheduled Federal
Pell Grant award;
(3) In the previous payment periods in the award year the student
has completed the number of credit hours required in an academic year
leading to his or her associate or baccalaureate degree program; and
(4) The student has completed the weeks of instructional time
required for an academic year or will complete them in the first
payment period for which he or she will receive a payment from his or
her second Scheduled Federal Pell Grant award.
(c) If an institution awards a student up to a second Scheduled
Federal Pell Grant award, the institution must make such awards to all
students who qualify under paragraph (a) of this section.
(Authority 20 U.S.C. 1070a)
Sec. 690.73 [Amended]
24. Section 690.73 is revised to read as follows:
When an institution is terminated under 34 CFR 668.86, the
institution shall provide the following information to the Secretary:
(a) The name and enrollment status of each eligible student who
submitted a valid SAR or for whom the institution received a valid ISIR
before the termination date.
(b) The amount of funds the institution paid to each Federal Pell
Grant recipient before the termination date.
(c) The amount due each student eligible to receive a Federal Pell
Grant through the end of the award year.
(d) An accounting of Federal Pell Grant expenditures to the date of
termination.
25. Section 690.75 is amended by revising paragraphs (a)(2), and
(b) to read as follows:
Sec. 690.75 Determination of eligibility for payment.
(a) * * *
(2) Is enrolled as an undergraduate student; and
* * * * *
(b) If an eligible student submits a valid SAR to the institution
or the institution receives a valid ISIR for that student and that
student then becomes ineligible before receiving a payment, the
institution may pay the student only the amount that it determines
could have been used for educational purposes before the student became
ineligible.
* * * * *
Sec. 690.77 [Removed and Reserved]
26. Section 690.77 is removed and reserved.
27. Section 690.80 is amended by revising the title of the section
heading and paragraphs (a) and (b)(1) to read as follows:
Sec. 690.80 Recalculation of a Federal Pell Grant award.
(a) Change in expected family contribution. (1) The institution
shall recalculate a Federal Pell Grant award for the entire award year
if the student's expected family contribution changes at any time
during the award year. The change may result from--
(i) The correction of a clerical or arithmetic error under
Sec. 690.14; or
(ii) A correction based on information required as a result of
verification under 34 CFR part 668, Subpart E.
(2) Except as described in 34 CFR 668.60(c), the institution shall
adjust the student's award when an overaward or underaward is caused by
the change in the expected family contribution. That adjustment must be
made--
(i) Within the same award year--if possible--to correct any
overpayment or underpayment; or
(ii) During the next award year to correct any overpayment that
could not be adjusted during the year in which the student was
overpaid.
(b) Change in enrollment status. (1) If the student's enrollment
status changes from one academic term to another term within the same
award year, the institution shall recalculate the Federal Pell Grant
award for the new payment period taking into account any changes in the
cost of attendance.
* * * * *
28. Section 690.82 is amended by revising paragraphs (a)
introductory text and (a)(1); removing paragraph (d); redesignating
paragraphs (b) and (c) as paragraphs (c) and (d) respectively, and by
adding new paragraphs (a)(8), (b), and (e) to read as follows:
Sec. 690.82 Maintenance and retention of records.
(a) Each institution shall maintain adequate records (including
those related to verification), which include the fiscal and accounting
records that are required under Sec. 690.81, records required for
audits in 34 CFR 668.23, the SAR or ISIR of each student who received a
Federal Pell Grant, and records indicating--
(1) The eligibility of all enrolled students who have submitted
valid SARs to the institution or for whom the institution has received
valid ISIRs;
* * * * *
(8) Documentation of a student's eligibility for any part of a
second Scheduled Federal Pell Grant award in any award year.
(b) Each institution shall retain any completed applications and
any other documents submitted by a student to the institution under
Sec. 690.14(c) if the application information is transmitted to the
Secretary under EDE and is processed by the Secretary.
* * * * *
(e) An institution may substitute microform copies or other media
formats acceptable to the Secretary, as published in a notice in the
Federal Register, in lieu of original records in meeting the
requirements of this section.
29. A new part 691 is added to read as follows:
PART 691--PRESIDENTIAL ACCESS SCHOLARSHIP PROGRAM
Subpart A--General
Sec.
691.1 Scope and purpose.
691.2 General definitions.
691.3 Payment period.
691.4 [Reserved]
691.5 [Reserved]
691.6 Duration of student eligibility.
691.7 Institutional participation.
691.8 Enrollment status for students taking regular and
correspondence courses.
691.9 Written agreements between two or more eligible institutions.
691.10 [Reserved]
691.11 Payments from more than one institution.
Subpart B--Application Procedures and Eligibility Requirements
691.12 The application process.
691.13-691.14 [Reserved]
691.15 Eligibility to apply initially for a scholarship.
691.16 Eligibility requirements to receive an award.
691.17 Eligibility requirements to continue to receive an award.
Subpart C--[Reserved]
Subpart D--[Reserved]
Subpart E--[Reserved]
Subpart F--Determination of Awards
691.61 Disbursement conditions and deadlines.
691.62 Calculation of a Presidential Access Scholarship Program
award.
691.63 Calculation of a Presidential Access Scholarship for a
payment period.
691.64 Calculation of a Presidential Access Scholarship for a
payment period that occurs in 2 award years.
691.65 Transfer student: attendance at more than one institution
during an award year.
691.66 Correspondence study.
Subpart G--Institutional Administration
691.71 Scope.
691.72 Institutional participation agreement.
691.73 Termination of institutional participation agreement.
691.74 [Reserved]
691.75 Determination of eligibility for payment.
691.76 Frequency of payment.
691.77 [Reserved]
691.78 Method of disbursement by check or credit to a student's
account.
691.79 Recovery of overpayments.
691.80 Recalculation of a PAS Program award.
691.81 Fiscal control and fund accounting procedures.
691.82 Maintenance and retention of records.
691.83 Submission of reports.
Subpart H--Administrative Responsibilities of a State
691.90 Early-intervention agreement.
691.91 Records a State must maintain.
Authority: 20 U.S.C. 1070a-31 et seq.
Subpart A--General
Sec. 691.1 Scope and purpose.
The purposes of the Presidential Access Scholarship (PAS) Program
are to encourage students to finish high school and attend college and
to upgrade the course of study completed by high school graduates who
are from low- or moderate-income families.
(Authority: 20 U.S.C. 1070a-31)
Sec. 691.2 General definitions.
(a) Definitions of the following terms used in this part are
described in subpart A of the regulations for Institutional Eligibility
under the Higher Education Act of 1965, as amended, 34 CFR part 600:
Accredited Award year, Clock hour program, Correspondence course,
Educational program, Eligible institution, Recognized equivalent of
high school diploma, Regular Student, Secretary, and State.
(b) Definitions of the following terms used in this part are
described in subpart A of the Student Assistance General Provisions, 34
CFR part 668: Academic year, Enrolled, Federal Pell Grant Program,
Full-time student, and HEA.
(c) Other terms used in this part are:
Central processor: An organization under contract with the
Secretary that calculates an applicant's expected family contribution
based on the applicant's application data, transmits an ISIR to each of
the institutions designated by the applicant, and submits reports to
the Secretary on the correctness of its computations of the expected
family contribution amounts and the accuracy of the answers to
questions on application forms for the previous award year cycle.
Disbursement Schedule: A table showing the annual awards that
three-quarter, half-time, and less-than-half-time students at term-
based institutions using credit hours would receive for an academic
year. This table is published annually by the Secretary and is based
on--
(1) A student's expected family contribution, as determined in
accordance with title IV, part F of the HEA; and
(2) A student's attendance costs as defined in title IV, part F of
the HEA.
Electronic Data Exchange: An electronic exchange system between the
central processor and an institution under which--
(1) A student is able to transmit his or her application
information to the central processor through his or her institution and
an ISIR is transmitted back to the institution;
(2) The student through his or her institution is able to transmit
any changes in application information to the central processor; and
(3) The institution receives an ISIR from the central processor for
that student.
Eligible early-intervention program: A program as required under
Sec. 691.16(a)(5) that provides education-related activities such as
counseling, mentoring, academic support, outreach, and other supportive
services, including providing information on opportunities for
postsecondary financial aid, to students enrolled in preschool through
grade 12. To qualify, a program must be one of the following:
(1) A Talent Search project as described in 34 CFR part 643 and
authorized under section 402B of the HEA, as amended;
(2) An Upward Bound project as described in 34 CFR part 645 and
authorized under section 402C of the HEA, as amended;
(3) An Opportunity Center as described in 34 CFR part 644 and
authorized under section 402F of the HEA, as amended; or
(4) A National Early Intervention Scholarship and Partnership
Program as authorized under section 404A of the HEA, as amended; or
(5) A program that is certified as an honors scholars program by
the Governor of the State in which it is offered and that the Governor
determines meets comparable requirements for any program funded under
34 CFR parts 643, 644, 645, or section 404A of the HEA.
Expected family contribution (EFC): The amount which the student
and the student's family may be reasonably expected to contribute
toward the student's postsecondary education for the academic year.
Half-time student: (1) Except as provided in paragraph (2) of this
definition, an enrolled student who is carrying a half-time academic
work load--as determined by the institution--that amounts to at least
half the work load of the appropriate minimum requirement outlined in
the institution's definition of a full-time student.
(2) A student enrolled solely in a program of study by
correspondence who is carrying a work load of at least 12 hours of work
per week or is earning at least 6 credit hours per semester, trimester,
or quarter. However, regardless of the workload, no student enrolled
solely in correspondence study is considered more than a half-time
student.
Honors scholars program: A program designed to encourage a high
level of academic achievement from students who are enrolled in the
program.
Institutional Student Information Record (ISIR): A paper document
or a computer-generated electronic record that the central processor
transmits to an institution that includes an applicant's--
(1) Personal identification information;
(2) Application data used to calculate the applicant's EFC; and
(3) EFC calculated by the central processor.
Less-than-half-time student: An enrolled student who is carrying
less than half the work load of the appropriate minimum requirement
outlined in the institution's definition of a full-time student.
Payment Schedule: A table showing a full-time student's Scheduled
PAS Award for an academic year. This table is published annually by the
Secretary.
Payment Voucher: An electronic or magnetic record, or for the 1995-
96 award year a paper record, that is provided to the Secretary by an
institution showing a student's expected family contribution, cost of
attendance, enrollment status, and student disbursement information.
Scheduled Presidential Access Scholarship: The amount of a PAS that
would be paid to a full-time student for a full academic year. This
table, published annually by the Secretary, is based on--
(1) The student's expected family contribution, as determined in
accordance with part F of title IV of the HEA; and
(2) The student's cost of attendance as defined in part F of title
IV of the HEA.
Student Aid Report (SAR): A report provided to an applicant showing
the amount of his or her expected family contribution.
Three-quarter-time student: An enrolled student who is carrying a
three-quarter-time academic work load--as determined by the
institution--that amounts to at least three-quarters of the work of the
appropriate minimum requirement outlined in the definition of a ``full-
time student.''
Undergraduate student: A student enrolled in an undergraduate
course of study at an institution of higher education who--
(1) Has not earned a baccalaureate or first professional degree;
and
(2) Is in an undergraduate course of study that usually does not
exceed 4 academic years or is enrolled in a 4 to 5 academic year
program designed to lead to a first degree. A student enrolled in a
program of any other length is considered an undergraduate student only
for the first 4 academic years of that program.
Valid Institutional Student Information Record (valid ISIR): An
ISIR on which all the information used in calculating the applicant's
expected family contribution is accurate and complete as of the date
the application is signed.
Valid Student Aid Report: A Student Aid Report on which all of the
information used in calculating the applicant's expected family
contribution is accurate and complete as of the date the application is
signed.
(Authority: 20 U.S.C. 1070a-31 et seq.)
Sec. 691.3 Payment period.
(a) Payment period for an eligible program that has academic terms:
(1) Except as noted in paragraph (a)(2) of this section, for an
eligible program that uses semesters, trimesters, quarters, or other
academic terms, the payment period is the semester, trimester, quarter,
or other academic term.
(2) For an eligible program that uses semesters, trimesters,
quarters, or other academic terms and measures progress in clock
hours--
(i) A payment period is a semester, trimester, quarter, or other
academic term if the student completes all the clock hours scheduled
for that term;
(ii) If at the end of a term, the student has not completed all of
the clock hours scheduled for that term and the student has received a
PAS for that term, the payment period extends beyond that term for as
long as it takes the student to complete the number of clock hours
originally scheduled for that term; and
(iii) If a payment period extends into another term, the next
payment period consists of the number of clock hours scheduled for that
term that were not included in the previous payment period.
(b) Payment periods for an eligible program that does not have
academic terms: (1) For a student whose eligible program is one
academic year or less--
(i) The first payment period is the period of time in which the
student completes the first half of his or her program as measured in
credit or clock hours; and
(ii) The second payment period is the period of time in which the
student completes the second half of his or her program as measured in
credit or clock hours; or
(2) For a student whose eligible program is more than one academic
year--
(i) For the first academic year, the first payment period is the
period of time in which the student completes the first half of his or
her academic year as measured in credit or clock hours, and the second
payment period is the period of time in which the student completes the
second half of that academic year.
(ii) For subsequent academic years, each payment period is the
period of time in which the student first completes--
(A) One half of the academic year; or
(B) The remainder of the student's program.
(3) For purposes of paragraphs (b)(1) and (b)(2) of this section at
an institution measuring progress in credits hours, if a student cannot
earn half of his or her credits in the program under paragraph (b)(1)
of this section or the academic year under paragraph (b)(2) of this
section until after the midpoint between the first and last scheduled
days of class, the student is considered to begin his or her second
payment period on the later of--
(i) The calendar midpoint between the first and last scheduled days
of class of the program or academic year; or
(ii) The date, as determined by institution, that the student has
completed half of his or her academic coursework.
(4) If an institution chooses to have more than two payment periods
in an academic year, the rules in paragraphs (b)(1) through (b)(3) of
this section are modified to reflect the increased number of payment
periods. For example, if an institution chooses to have three payment
periods in an academic year, each payment period must correspond to
one-third of the academic year.
(Authority: 20 U.S.C. 1070a-32)
Secs. 691.4-691.5 [Reserved]
Sec. 691.6 Duration of student eligibility.
A scholarship under the PAS Program shall be awarded to a student
for a period of--
(a) Not more than 4 academic years; or
(b) Not more than 5 academic years in the case of a student who is
enrolled in an undergraduate course of study requiring attendance for
the full-time equivalent of 5 academic years.
(Authority: 20 U.S.C. 1070a-32)
Sec. 691.7 Institutional participation.
(a)(1) An institution of higher education is eligible to award
scholarships for the PAS Program if it--
(i) Meets the appropriate definition set forth in section 481 of
the HEA;
(ii) Enters into a program participation agreement with the
Secretary; and
(iii) Complies with that agreement and with the applicable
provisions of this part and 34 CFR part 668.
(2) If an institution begins participation in the PAS Program
during an award year, a student enrolled in and attending that
institution is eligible to receive a PAS for the payment period during
which the institution enters into a program participation agreement
with the Secretary and any subsequent payment period.
(b) If an institution becomes ineligible to participate in the PAS
Program during an award year, an eligible student who was attending the
institution and who submitted a valid SAR to the institution or whose
institution received a valid ISIR from the U.S. Department of Education
before the date the institution became ineligible is paid a PAS for
that award year for--
(1) The payment periods that the student completed before the
institution became ineligible; and
(2) The payment period in which the institution became ineligible.
(c) An institution that becomes ineligible shall, within 45 days
after the effective date of loss of eligibility, provide to the
Secretary--
(1) The name and enrollment status of each eligible student who,
during the award year, received a PAS at the institution before it
became ineligible;
(2) The amount of funds paid to each PAS recipient for that award
year;
(3) The amount due each student eligible to receive a PAS through
the end of the payment period during which the institution became
ineligible; and
(4) An accounting of the PAS expenditures for that award year to
the date of ineligibility.
(Approved by the Office of Management and Budget under control
number 1840-0681)
(Authority: 20 U.S.C. 1070a-32)
Sec. 691.8 Enrollment status for students taking regular and
correspondence courses.
(a) If, in addition to regular coursework, a student takes
correspondence courses from either his or her own institution or
another institution having an agreement for this purpose with the
student's institution, the correspondence work may be included in
determining the student's enrollment status to the extent permitted
under paragraph (b) of this section.
(b) Except as noted in paragraph (c) of this section, the
correspondence work that may be included in determining a student's
enrollment status is that amount of work which--
(1) Applies toward a student's degree or certificate;
(2) Is completed within the period of time required for regular
course work; and
(3) Does not exceed the amount of a student's regular course work
for the payment period for which the student's enrollment status is
being calculated.
(c)(1) Notwithstanding the limitation in paragraph (b)(3) of this
section, a student who would be a half-time student based solely on his
or her correspondence work is considered a half-time student unless the
calculation in paragraph (b) of this section produces an enrollment
status greater than half-time.
(2) A student who would be a less-than-half-time student based
solely on his or her correspondence work or a combination of
correspondence work and regular course work is considered a less-than-
half-time student.
(d) The following chart provides examples of the rules set forth in
this section. It assumes that the institution defines full-time
enrollment as 12 credits per term, making the half-time enrollment
equal to 6 credits per term.
----------------------------------------------------------------------------------------------------------------
Total course
No. of credit load in credit
No. of credit hours hours to
Under Sec. 691.8 hours regular correspondence determine Enrollment status
work enrollment
status
----------------------------------------------------------------------------------------------------------------
(b)(3)................................. 3 3 6 Half-time.
(b)(3)................................. 3 6 6 Half-time.
(b)(3)................................. 3 9 6 Half-time.
(b)(3)................................. 6 3 9 Three-quarter-time.
(b)(3)................................. 6 6 12 Full-time.
(b)(3) and (c)......................... 2 6 6 Half-time.
(c) \1\................................ .............. .............. .............. Less-than-half-time.
----------------------------------------------------------------------------------------------------------------
\1\Any combination of regular and correspondence work that is greater than 0, but less than 6 hours.
(Approved by the Office of Management and Budget under control
number 1840-0681)
(Authority: 20 U.S.C. 1070a-32)
Sec. 691.9 Written agreements between two or more eligible
institutions.
(a) A student who is enrolled in an eligible program at one
eligible institution and taking courses at one or more other eligible
institutions that apply toward his or her degree or certificate at the
first institution may receive a PAS for attendance at both institutions
only if there is a written agreement between the institutions.
(b) The institution at which the student is enrolled and expects to
receive his or her degree or certificate shall determine and pay the
student's PAS. However, the other institution may determine and pay the
student's PAS if the institutions agree in writing to that arrangement.
(c) The institution that determines and pays the PAS shall--
(1) Take into account all courses that apply to the student's
degree or certificate taken by the student at each eligible institution
participating in the agreement when determining the student's
enrollment status and cost of attendance; and
(2) Maintain all records regarding the student's eligibility for
and receipt of the PAS.
(Approved by the Office of Management and Budget under control
number 1840-0681)
(Authority: 20 U.S.C. 1070a-32)
Sec. 691.10 [Reserved]
Sec. 691.11 Payments from more than one institution.
A student is not entitled to receive PAS Program payments
concurrently from more than one institution or from the Secretary and
an institution.
(Authority: 20 U.S.C. 1070a-32)
Subpart B--Application Procedures and Eligibility Requirements
Sec. 691.12 The application process.
Each eligible student desiring to apply for a PAS shall--
(a) Submit annually an application to the Secretary on the same
approved form and at the same time the student applies for a Federal
Pell Grant;
(b) Provide the application to the Secretary within the time frame
required to apply for a Federal Pell Grant; and
(c) Provide such information as is required to apply for a Federal
Pell Grant.
(Authority: 20 U.S.C. 1070a-33)
Secs. 691.13-691.14 [Reserved]
Sec. 691.15 Eligibility to apply initially for a scholarship.
A student is eligible to apply for a PAS for his or her first year
of postsecondary study if the student--
(a) Is scheduled to graduate from or is a graduate of a public or
private secondary school, or has the equivalent of a high school
diploma as recognized by the State in which the eligible student
resides, but has not yet received a baccalaureate degree; and
(b) Is either enrolled, accepted for enrollment, or intends to
enroll, at an institution of higher education not later than 3 calendar
years after the date that the student graduates from secondary school
or obtains the recognized equivalent of a high school diploma.
(Authority: 20 U.S.C. 1070a-35)
Sec. 691.16 Eligibility requirements to receive an award.
(a) A student is eligible to receive a PAS for his or her first
year of postsecondary study if the student--
(1) Is eligible to receive a Federal Pell Grant in the award year
in which the PAS is awarded;
(2) Is enrolled or accepted for enrollment in a degree or
certificate program of at least 2 years in length;
(3) Has demonstrated academic achievement and preparation for
postsecondary education by taking the following college preparatory
level coursework that includes at least--
(i) Four years of English;
(ii) Three years of science;
(iii) Three years of mathematics;
(iv) Either--
(A) Three years of history; or
(B) Two years of history and one year of social studies; and
(v) Either--
(A) Two years of foreign language; or
(B) One year of computer science and 1 year of foreign language;
(4) Has earned a grade point average of 2.5 or higher, on a scale
of 4.0, in the final 2 years of high school; and
(5) Has either (i) participated for a minimum period of 36 months
in an eligible early-intervention program; or
(ii) Ranked in the top 10 percent, by grade point average, of the
student's secondary school graduating class.
(b) Notwithstanding the requirements in paragraph (a)(5) of this
section, a student may receive a PAS if an authorized official of the
State in which the student resides certifies to the Secretary that the
student was unable to participate in an eligible early-intervention
program because--
(1) The program was not available in the area where the student
resides; or
(2) Due to unusual and exceptional circumstances, the student was
unable to participate in such a program.
(c) Notwithstanding the requirements in paragraph (a)(3) of this
section, a student may receive a PAS if the student's secondary school
does not offer the necessary coursework required in paragraph (a)(3) of
this section, and the student has completed the required coursework at
another local secondary school or at a community college.
(d) Notwithstanding the requirements in paragraph (a)(3)(v) of this
section, a student may receive a PAS if the student is--
(1) Fluent in a language other than English and participates in a
program to learn English; or
(2) An English-speaking student who is fluent in a second language.
(Authority: 20 U.S.C. 1070a-33, 1070a-35, 1070a-36(c))
Sec. 691.17 Eligibility requirements to continue to receive an award.
(a) To be eligible to continue to receive a PAS after the first
year of postsecondary study, a student shall--
(1) Continue to meet the eligibility requirements in Sec. 691.16(a)
(1) and (2); and
(2) Fulfill the requirements for satisfactory academic progress as
described in 34 CFR in 668.7(c) (the Student Assistance General
Provisions regulations) and section 484(c) of the HEA.
(b) If a student ceases to be eligible for a PAS because he or she
is no longer eligible for a Federal Pell Grant, the student can later
regain eligibility to receive a PAS at the time he or she qualifies for
a Federal Pell Grant.
(Authority: 20 U.S.C. 1070a-33)
Subparts C-E--[Reserved]
Subpart F--Determination of Awards
Sec. 691.61 Disbursement conditions and deadlines.
(a) Submission process. An institution makes a disbursement of a
PAS to a student only if--
(1) The student submits a valid SAR to the institution; or
(2) The institution obtains a valid ISIR for that student; and
(3)(i) The student presents a certificate issued by an appropriate
official of a high school in a State verifying that the student has
completed the necessary coursework to qualify for a PAS; or
(ii) The student presents written documentation that he or she has
participated in an approved eligible early-intervention program for at
least 36 months or qualifies for an exception under Secs. 691.16(b).
(4) In determining a student's eligibility to receive his or her
Federal Pell Grant, an institution is entitled to rely on valid SAR
information or valid ISIR information except under the conditions set
forth in 34 CFR 668.14(f) and 668.60.
(b) Student Aid Report or Institutional Student Information Record
deadline. Except as provided in 34 CFR 668.60, for a student to receive
a PAS award for an award year, the student must submit the relevant
parts of the SAR to his or her institution or the institution must
obtain a valid ISIR--
(1) While the student is still enrolled and eligible for payment at
that institution; and
(2) By June 30 of that award year.
(Authority: 20 U.S.C. 1070a-32)
Sec. 691.62 Calculation of a Presidential Access Scholarship Program
award.
The amount of a student's PAS for an academic year is equal to 25
percent of the student's Federal Pell Grant awarded for that academic
year as determined under 34 CFR 690.62 except that--
(a) If funding in a fiscal year is sufficient to fund fully all
eligible student awards in that academic year, no payment shall be made
to a full-time student of less than $400 for an academic year,
independent of the amount of the Federal Pell Grant.
(b) If funding is insufficient to fund fully all eligible students,
the Secretary reduces each student's award in proportion to the amount
that the PAS Program is not fully funded.
(Authority: 20 U.S.C. 1070a-32)
Sec. 691.63 Calculation of a Presidential Access Scholarship for a
payment period.
For an eligible student enrolled in an institution of higher
education in an eligible program, the student's PAS for each payment
period is calculated by--
(a) Determining his or her total PAS award in accordance with
Sec. 691.62; and
(b) Determining the amount of each payment based on the payment
amount for a Federal Pell Grant as calculated in accordance with
Sec. 690.63.
(Authority: 20 U.S.C. 1070a-32)
Sec. 691.64 Calculation of a Presidential Access Scholarship for a
payment period that occurs in 2 award years.
(a) If a student enrolls in a payment period that is scheduled to
occur in 2 award years--
(1) The entire payment period must be considered to occur within 1
award year.
(2) The institution shall determine for each PAS recipient the
award year in which the payment period will be placed subject to the
restrictions set forth in paragraph (a)(3) of this section.
(3) The institution shall place a payment period with more than 6
months scheduled to occur within 1 award year in that award year.
(4) If an institution places the payment period in the first award
year, it shall pay a student with funds from the first award year.
(5) If an institution places the payment period in the second award
year, it shall pay a student with funds from the second award year.
(b) An institution may not make a payment that will result in the
student receiving more than his or her Scheduled PAS for an award year.
(Authority: 20 U.S.C. 1070a-32)
Sec. 691.65 Transfer student: attendance at more than one institution
during an award year.
(a) If a student who receives a PAS at one institution subsequently
enrolls at a second institution in the same award year, the student may
receive a PAS at the second institution only if--
(1) The student has submitted a valid SAR; or
(2) The second institution participates in the Secretary's
electronic programs to report Federal Pell Grant disbursement data
electronically to the Secretary and the second institution has obtained
a valid ISIR, in which case the institution shall use the information
from the valid ISIR to determine the amount of the student's award.
(The institution shall follow the procedures set forth in 34 CFR 668.19
relating to financial aid transcripts.)
(b) The second institution shall calculate the student's award
according to Sec. 691.63.
(c) The second institution may pay a PAS only for that portion of
the award year in which a student is enrolled at that institution. The
scholarship amount must be adjusted, if necessary, to ensure that the
scholarship award does not exceed the percentage of the award remaining
from the student's first institution for that award year.
(d) If a student's PAS award at the second institution differs from
the Scheduled PAS Award at the first institution, the award amount at
the second institution is calculated as follows--
(1) The amount received at the first institution is compared to the
PAS award at the first institution to determine the percentage of the
PAS award that the student has received.
(2) The percentage in paragraph (d)(1) of this section is
subtracted from 100 percent.
(3) The remaining percentage is the percentage of the Scheduled PAS
award at the second institution to which the student is entitled.
(e) The student's PAS award for each payment period is calculated
according to the procedures in Sec. 691.63, unless the remaining
percentage of the Scheduled PAS at the second institution, referred to
in paragraph (d)(3) of this section, is less than the amount the
student would normally receive for that payment period. In that case,
the student's PAS is equal to the remaining percentage.
(f) A transfer student shall repay any amount received in an award
year which exceeds his or her Scheduled PAS.
(Authority: 20 U.S.C. 1070a-32)
Sec. 691.66 Correspondence study.
For an eligible student enrolled in an institution of higher
education in an eligible program of correspondence study, the student's
PAS for each payment period is calculated by--
(a) Determining his or her total PAS award in accordance with
Sec. 691.62; and
(b) Determining the amount of each payment based on the payment
amount for a Federal Pell Grant as calculated in accordance with
Sec. 690.66.
(Authority: 20 U.S.C. 1070a-32)
Subpart G--Institutional Administration
Sec. 691.71 Scope.
This subpart deals with program administration by an institution of
higher education. An institution shall enter into a program
participation agreement with the Secretary so that it may calculate and
pay PAS awards to students.
(Authority: 20 U.S.C. 1070a-32)
Sec. 691.72 Institutional participation agreement.
The Secretary may enter into an agreement with an institution of
higher education pursuant to which the institution will calculate and
pay PAS awards to its students.
(Authority: 20 U.S.C. 1070a-32)
Sec. 691.73 Termination of institutional participation agreement.
When an institution is terminated under 34 CFR 668.86, the
institution shall provide the following information to the Secretary--
(a) The name and enrollment status of each eligible student who
submitted a valid SAR or for whom the institution received a valid ISIR
before the termination date.
(b) The amount of funds the institution paid to each PAS recipient
before the termination date.
(c) The amount due each student eligible to receive a PAS through
the end of the award year.
(d) An accounting of PAS expenditures to the date of termination.
(Authority: 20 U.S.C. 1070a-32)
Sec. 691.74 [Reserved]
Sec. 691.75 Determination of eligibility for payment.
(a) For each payment period, an institution may pay a PAS to an
eligible student only after it determines that the financial aid
transcript requirements of 34 CFR 668.19 have been met, and the
student--
(1) Qualifies as eligible to receive a Federal Pell Grant and as an
eligible student under Secs. 691.16 or 691.17 for a continuing student;
(2) Is enrolled as an undergraduate student; and
(3)(i) Has completed required clock hours for which he or she has
been paid a PAS, if the student is enrolled in an eligible program that
is measured in clock hours; or
(ii) Has completed the required credit hours for which he or she
has been paid a PAS, if the student is enrolled in an eligible program
that is measured in credit hours and that does not have academic terms.
(b) If an eligible student submits a valid SAR to the institution
or the institution receives a valid ISIR for that student and that
student then becomes ineligible before receiving a payment, the
institution may pay the student only the amount that it determines
could have been used for educational purposes before the student became
ineligible.
(c) If an institution determines at the beginning of a payment
period that a student is not maintaining satisfactory progress but
reverses that determination before the end of the payment period, the
institution may pay a PAS to the student for the entire payment period.
(d) If an institution determines at the beginning of a payment
period that a student is not maintaining satisfactory progress but
reverses that determination after the end of the payment period, the
institution may neither pay the student a PAS for that payment period
nor make adjustments in subsequent PAS payments to compensate for the
loss of aid for that period.
(e) A member of a religious order, community, society, agency, or
organization who is pursuing a course of study in an institution of
higher education is considered to have an expected family contribution
of at least $3,000 if that religious order--
(1) Has as a primary objective the promotion of ideals and beliefs
regarding a Supreme Being; and
(2) Provides subsistence support to its members or has directed the
member to pursue the course of study.
(Authority: 20 U.S.C. 1070a-32)
Sec. 691.76 Frequency of payment.
(a) In each payment period, an institution may pay a student at
such times and in such installments as it determines will best meet the
student's needs.
(b) The institution may pay funds in one lump sum for all the prior
payment periods for which the student was an eligible student within
the award year. The student's enrollment status must be determined
according to work already completed.
(Authority: 20 U.S.C. 1070a-32)
Sec. 691.77 [Reserved]
Sec. 691.78 Method of disbursement by check or credit to a student's
account.
(a) (1) The institution may pay a student directly by check or by
crediting his or her institutional account.
(2) Unless a student has agreed otherwise, the amount an
institution may credit to a student's account may not exceed the amount
the student is required to pay the institution for--
(i) Tuition and fees;
(ii) Board, if the student contracts with the institution for
board; and
(iii) Housing, if the student contracts with the institution for
housing.
(3) An institution may not require a student to grant permission to
credit his or her account for the costs of other goods and services the
institution provides to the student.
(4) The institution shall notify the student of the amount he or
she can expect to receive and how that amount will be paid.
(b) (1) The institution may not make a payment to a student for a
payment period until the student is registered for classes for that
period.
(2) The earliest an institution may directly pay a registered
student is 10 days before the first day of classes of a payment period.
(3) The earliest an institution may credit a registered student's
account is 3 weeks before the first day of classes of a payment period.
(c) The institution shall return to the Secretary any funds paid to
a student who, before the first day of classes--
(1) Officially or unofficially withdraws; or
(2) Is expelled.
(d) (1) If an institution intends to pay a student directly, it
shall notify him or her before the payment is made when it will pay the
PAS award.
(2) If a student does not pick up the check on time, the
institution shall still pay the student if he or she requests payment
within 15 days after the last date that his or her enrollment ends in
that award year.
(3) If the student has not picked up his or her payment at the end
of the 15-day period, the institution may credit the student's account
only for any outstanding charges for tuition and fees and room and
board for the award year incurred by the student while he or she was
eligible.
(4) A student forfeits the rights to receive the payment if he or
she does not pick up a payment by the end of the 15 day period.
(5) Notwithstanding paragraph (d)(4) of this section, the
institution may, if it chooses, pay a student who did not pick up his
or her payment, through the next payment period.
(Authority: 20 U.S.C. 1070a-32)
Sec. 691.79 Recovery of overpayments.
(a) (1) A student is liable for any PAS overpayment made to him or
her.
(2) The institution is liable for any overpayment if the
overpayment occurred because the institution failed to follow the
procedures set forth in this part. The institution shall restore those
funds to the Secretary even if it cannot collect the overpayment from
the student.
(b) If an institution makes an overpayment for which it is not
liable, it shall help the Secretary recover the overpayment by--
(1) Making a reasonable effort to contact the student and recover
the overpayment; and
(2) If unsuccessful, providing the Secretary with the student's
name, social security number, amount of overpayment, and other relevant
information.
(c) If an institution refers a student who received an overpayment
for which it is not liable to the Secretary for recovery, the student
remains ineligible for further title IV, HEA program assistance for
attendance at any institution until the student repays the overpayment
or the Secretary determines the overpayment has been resolved.
(Approved by the Office of Management and Budget under control
number 1840-0681)
(Authority: 20 U.S.C. 1070a-32)
Sec. 691.80 Recalculation of a PAS Program award.
(a) The institution shall recalculate a PAS award for the entire
award year if the student's Federal Pell Grant changes at any time
during the award year for any reason specified in Sec. 690.80,
including changes in enrollment status, EFC, or cost of attendance.
(b) The institution shall adjust the student's award when an
overaward or underaward is caused by the change in the Federal Pell
Grant award. That adjustment must be made--
(1) Within the same award year--if possible--to correct any
overpayment or underpayment; or
(2) During the next award year to correct any overpayment that
could not be adjusted during the year in which the student was
overpaid.
(Authority: 20 U.S.C. 1070a-32)
Sec. 691.81 Fiscal control and fund accounting procedures.
(a) (1) An institution shall establish and maintain on a current
basis financial records that reflect all program transactions. The
institution shall establish and maintain general ledger control
accounts and related subsidiary accounts that identify each program
transaction and separate those transactions from all other
institutional financial activity.
(2) The institution shall account for the receipt and expenditure
of PAS funds in accordance with generally accepted accounting
principles.
(b) A separate bank account for PAS funds is not required. However,
the institution shall notify any bank in which it deposits PAS funds of
all accounts in that bank in which it deposits Federal funds.
(c) Except for funds received for administrative expenses, funds
received by an institution under this part may be used only to pay PAS
funds to students. The funds are held in trust by the institution for
the intended student beneficiaries and may not be used or hypothecated
for any other purpose.
(Authority: 20 U.S.C. 1070a-32)
Sec. 691.82 Maintenance and retention of records.
(a) Each institution shall maintain adequate records (including
those related to verification) that include the fiscal and accounting
records that are required under Sec. 691.81, records required for
audits in 34 CFR 668.23, the SAR or ISIR of each student receiving a
PAS, and records indicating--
(1) The eligibility for a PAS of all enrolled students who have
submitted valid SARs or valid ISIRs to the institution;
(2) The name and social security number of and the amount of the
PAS award paid to each student;
(3) The amount and date of each payment;
(4) The amount and date of any overpayment that has been restored
to the program account;
(5) Each student's enrollment period; and
(6) Documentation of a student's eligibility for any part of a
second Scheduled Federal Pell Grant award in any award year.
(b) Each institution shall retain any completed applications and
any other documents submitted by a student to the institution under
Sec. 690.14(c) if the application information is transmitted to the
Secretary under EDE.
(c) (1) The institution shall make the records listed in paragraph
(a) of this section available for inspection by the Secretary's
authorized representative at any reasonable time in the institution's
offices. It shall keep the records for each award year for 5 years
after that award year has ended.
(2) For any disputed expenditures in any award year for which the
institution cannot provide records, the Secretary determines the final
authorized level of expenditures.
(d) The institution shall keep records involved in any claim or
expenditure questioned by Federal audit until resolution of any audit
questions.
(e) An institution may substitute microform copies or other media
formats acceptable to the Secretary, as published in a notice in the
Federal Register, in lieu of original records in meeting the
requirements of this section.
(Authority: 20 U.S.C. 1070a-32)
Sec. 691.83 Submission of reports.
(a) (1) An institution may receive either a payment from the
Secretary for an award to a PAS recipient or a corresponding reduction
in the amount of Federal funds received in advance for which it is
accountable if--
(i) The institution submits to the Secretary all SAR Payment
Documents (or the equivalent as defined by the Secretary) for that
award in the manner and form prescribed in paragraph (a)(2) of this
section by September 30 following the end of the award year in which
the scholarship is made, and
(ii) The Secretary accepts those SAR Payment Documents.
(2) The Secretary accepts SAR Payment Documents that are submitted
in accordance with procedures established through publication in the
Federal Register and that contain information including that previously
provided by the student and the institution.
(3) An institution that does not comply with the requirements of
this paragraph may receive payment or reduction in accountability only
as provided in paragraph (c) of this section.
(b) An institution shall report to the Secretary any change in
enrollment status, cost of attendance, or other event or condition that
causes a change in the amount of a Federal Pell Grant and a resulting
change in a PAS for which a student qualifies by submitting to the
Secretary an SAR Payment Document reporting a change to the Secretary
by the end of that reporting period that next follows the reporting
period in which the change occurred.
(c)(1) An institution that has timely submitted an SAR Payment
Document for a student in accordance with paragraph (a) of this section
but does not timely submit to the Secretary, or have accepted by the
Secretary, an SAR Payment Document necessary to document the full
amount of the PAS award to which the student is entitled may receive a
payment or reduction in accountability in the full amount of that award
if--
(i) A program review or an audit report produced in accordance with
the standards prescribed in 34 CFR 668.23(c) demonstrated to the
satisfaction of the Secretary that the student was eligible to receive
an amount greater than that reported on the SAR Payment Document timely
submitted to, and accepted by the Secretary; and
(ii) The institution seeks an adjustment to reflect an overpayment
for that award that is at least $100.
(2) An institution that has timely submitted and has accepted an
SAR Payment Document for a student in accordance with this section
shall report a reduction in the amount of a PAS award that the student
received when it determines that an overpayment has occurred, unless
that overpayment is one for which the institution is not liable under
Sec. 690.79(a).
(3) The Secretary pays or recognizes a reduction in accountability
under this paragraph after deducting the amount of any overpayments for
which the institution is liable under Sec. 691.79(a).
(d) In accordance with 34 CFR 668.84, the Secretary may impose a
fine on the institution if the institution fails to comply with the
requirements in paragraph (a), (b), or (c) of this section.
(e)(1) Notwithstanding paragraphs (a), (b), (c)(1) or (2), or (d)
of this section, if an institution demonstrates to the satisfaction of
the Secretary that the institution has provided PAS Program
scholarships in accordance with this part but has not received credit
or payment for those grants, the institution may receive payment or a
reduction in accountability for those grants in accordance with
paragraph (e) of this section.
(2) The institution must demonstrate that it qualifies for a credit
or payment by means of a finding contained in an audit report as
initially submitted to the Department that was conducted after December
31, 1988 and timely submitted in accordance with 34 CFR 668.23(c), with
respect to grants made during the period of that audit.
(3) In determining whether the institution qualifies for a payment
or reduction in accountability, the Secretary takes into account any
liabilities of the institution arising from that audit or any other
source. The Secretary collects those liabilities by offset in
accordance with 34 CFR part 30.
(Authority: 20 U.S.C. 1070a-32, 1094, 1226a-1)
Subpart H--Administrative Responsibilities of a State
Sec. 691.90 Early-intervention agreement.
For a student to receive a PAS, the State agency in the State in
which the student resides shall have entered into a one-time written
agreement with the Secretary, except that a State must submit a
subsequent agreement if the Secretary subsequently requires changes in
this initial agreement. Each State's agreement must be approved by the
Secretary and must include provisions designed to ensure the following:
(a) All secondary school students in the State have equal and easy
access to the coursework described in Sec. 691.16(c) and 406C(a)(2) of
the HEA.
(b) The State agency has procedures in place to verify to the
Secretary that--
(1) A student receiving a PAS has taken the coursework described in
Sec. 691.16(c);
(2) The coursework described in Sec. 691.16 is of a college
preparatory level; and
(3) The State requires all secondary schools in the State to issue
a certificate to each eligible student certifying that the student has
completed the necessary coursework to qualify for a PAS.
(c) The State agency has procedures in place to notify institutions
of higher education of the availability of the PAS so that the
institutions may award additional scholarships in concert with the PAS.
The State agency has procedures to inform junior high school students
enrolled in public or private schools and their families about--
(1) The value of postsecondary education;
(2) The availability of student aid to meet college expenses; and
(3) The availability of a PAS for students from low- and moderate-
income families who take academically demanding courses.
(Approved by the Office of Management and Budget under control
number 1840-0681)
(Authority 20 U.S.C. 1070a-36)
Sec. 691.91 Records a State must maintain.
(a) The State agency shall maintain written procedures and records
to support the information supplied in the early-intervention agreement
in Sec. 691.90 and the Governor's certification of other eligible early
intervention programs.
(b) The State agency shall maintain the written procedures and
records required under this subpart for a period of five calendar years
from the end of the award year to which the records relate.
(Approved by the Office of Management and Budget under control
number 1840-0681)
(Authority: U.S.C. 1070a-36)
[FR Doc. 94-26832 Filed 10-31-94; 8:45 am]
BILLING CODE 4000-01-P
