[Federal Register Volume 59, Number 38 (Friday, February 25, 1994)]
[Unknown Section]
[Page 0]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 94-4152]
[[Page Unknown]]
[Federal Register: February 25, 1994]
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Part VI
Department of Education
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34 CFR Parts 690 and 691
Federal Pell Grant Program; Presidential Access Scholarship Program;
Proposed 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: Notice of proposed rulemaking.
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SUMMARY: The Secretary proposes to amend the Federal Pell Grant Program
regulations and to establish regulations for the newly enacted
Presidential Access Scholarship Program. These regulations are needed
to implement recently enacted provisions of the Higher Education Act of
1965 (HEA), as amended by the Higher Education Amendments of 1992 (the
1992 Amendments), enacted on July 23, 1992.
The proposed amendments to the Federal Pell Grant Program
regulations incorporate changes in student eligibility requirements and
institutional administration requirements. The program name has also
been changed from the ``Pell Grant Program'' to the ``Federal Pell
Grant Program.''
The proposed regulations for the Presidential Access Scholarship
Program specify the eligibility requirements for students to apply for
and receive an award. These proposed regulations also specify the roles
of institutions of higher education, State officials, and State
agencies in administering the program.
DATES: Comments must be received on or before April 11, 1994.
ADDRESSES: All comments concerning these proposed regulations should be
addressed to Fred H. Sellers, Student Financial Assistance Programs,
Office of Postsecondary Education, U.S. Department of Education, 400
Maryland Avenue SW., room 4018, Regional Office Building 3, Washington,
DC 20202-5447. Telephone (202) 708-4607.
A copy of any comments that concern information collection
requirements should also be sent to the Office of Management and Budget
at the address listed in the Paperwork Reduction Act section of this
preamble.
FOR FURTHER INFORMATION CONTACT: Denise Boulanger, Student Financial
Assistance Programs, Office of Postsecondary Education, U.S. Department
of Education, 400 Maryland Avenue SW., room 4018, Regional Office
Building 3, Washington, DC 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: The purpose of the proposed revisions in the
regulations for the Federal Pell Grant Program (formerly known as the
Pell Grant Program) is to incorporate statutory changes to the HEA, as
amended by the 1992 Amendments. The proposed changes in the Pell Grant
Program would: (1) Rename the program the Federal Pell Grant Program;
(2) eliminate the duration of eligibility limitations; (3) revise the
formula for calculating a Federal Pell Grant payment for a payment
period; (4) limit the eligibility of incarcerated students; (5)
incorporate references to the Federal Need Analysis System's Expected
Family Contribution (EFC) under part F, title IV of the HEA; (6)
eliminate, in certain circumstances, the requirement that the student
present a Student Aid Report (SAR) to the institution in order to be
paid his or her Federal Pell Grant and allow an institution to pay a
student on the basis of a valid institutional student information
report (ISIR), i.e., a report to an institution that includes an
applicant's application information and EFC, generated by the central
processor; and (7) allow less-than-half-time students to receive a
Federal Pell Grant.
The 1992 Amendments included a provision giving the Secretary the
option to allow, on a case-by-case basis, a student pursuing a
baccalaureate degree to receive two Federal Pell Grants within one 12-
month period if the student completed more than an academic year of
coursework and needed funds to attend additional terms beyond the
academic year but within the same award year. The Higher Education
Technical Amendments of 1993, enacted on December 20, 1993, (Pub. L.
103-208) (The 1993 Technical Amendments) expanded the eligibility for a
second Scheduled Award to include students pursuing an associate
degree. The Secretary is requesting comment on how to implement this
provision fairly and equitably.
The Federal Pell Grant Program, a cornerstone of the Federal
student financial aid programs, supports National Education Goal 5
which states that every adult American will be literate and will
possess the knowledge and skills to compete in a global economy and
exercise the rights and responsibilities of citizenship. The program,
reauthorized in section 401 of the 1992 Amendments, will further Goal 5
by helping eligible students obtain marketable skills, achieve higher
levels of education than they might otherwise have pursued, and obtain
the knowledge required to discharge the responsibilities of
citizenship.
Federal Pell Grant Program
Significant Proposed Changes to the Federal Pell Grant Program
Regulations:
Section 690.2 General Definitions
The Secretary proposes to amend the definitions in Sec. 690.2 for
``disbursement schedule'' and ``enrollment status'' to include
references to students enrolled less-than-half-time, ``payment
schedule,'' and to add new definitions of ``academic year,'' ``annual
award,'' ``central processor,'' ``expected family contribution,''
``incarcerated student,'' ``institutional student information report,''
``less-than-half-time student,'' and ``valid institutional student
information report'' to incorporate clarifying eligibility language
included in the 1992 Amendments.
The Secretary believes that the new definition of academic year in
the 1992 Amendments is particularly important because it not only
requires completion of a minimum number of credit hours or clock hours
during an academic year, it also requires that the academic year be a
minimum of 30 weeks of instructional time.
Section 690.3 Payment Period.
The Secretary proposes to amend Sec. 690.3 to define more
accurately payment periods for eligible programs offered in credit
hours, but not in academic terms, if the majority of credit hours
cannot be earned until the program or academic year is completed. Under
the current definition, determining the end of one payment period and
the beginning of another for this type of program has been uncertain
and has resulted in program abuse at some institutions. The addition to
the definition of a payment period was made to prevent a particular
type of program abuse that occurs at an institution without terms that
does not have a clearly defined midpoint in its program or academic
year. Specifically, institutions have arbitrarily established a
midpoint that is inappropriately early. As a result, students received
disbursements in excess of the coursework that the students completed
for the payment period. The Secretary is proposing that for this type
of program, if a student cannot earn half the credits in a program or
academic year by the calendar midpoint of that program or academic
year, the first payment period shall end and the second payment period
shall begin on the later of: (a) the calendar midpoint between the
first and last scheduled days of class of the program or academic year;
or (b) the date, as determined by institution, that the student has
completed half of his or her academic coursework. For example, an
institution offers a program which consists of 24 semester hours. A
student is not considered to have earned any of the semester hours
until he or she finishes the program. The student's second payment
period begins on the later of the date of the calendar midpoint in the
program or the date that the institution determines the student has
completed half of his or her coursework.
Section 690.6 Duration of Eligibility
Currently Secs. 690.6(b) through (d) limit, in most instances, the
eligibility of a Federal Pell Grant recipient to 5 or 6 years,
depending on the length of the recipient's undergraduate program of
study. The 1992 Amendments remove the provisions in section 411(c)(1)
of the HEA that limited the number of years a student was eligible to
receive an award. Therefore, the Secretary proposes to amend this
section of the regulations by removing those limitations.
Section 690.8 Enrollment Status for Students Taking Regular and
Correspondence Courses
The Secretary proposes to amend Sec. 690.8 concerning the
enrollment status of students taking regular and correspondence courses
to include less-than-half-time students.
Section 690.10 Administrative Cost Allowance to Participating Schools
In those instances where an institution enrolls significant numbers
of less-than-full-time or independent students, the Secretary proposes
that the institution use some of its administrative cost allowance
funds to make financial aid services available to those students as
required under section 489(b)(2) of the HEA.
Subpart C--Expected Family Contribution for Students With Special
Conditions
The Secretary proposes to remove subpart C of the current
regulations. In fiscal years 1989-92, the Department of Education
Appropriations Act provided that section 479A of the HEA, which allows
a financial aid administrator to exercise professional judgment
concerning a student's and a student's family's ability to pay for his
or her education, did not apply to the Pell Grant Program. Instead, the
Secretary prescribed ``special conditions'' that, if the student or his
or her family met them, would allow the student to apply for a Pell
Grant using expected year income instead of base year income. The
regulations in subpart C specified those ``special conditions.''
However, the Department of Education Appropriations Act for fiscal year
1993 does not exempt the Federal Pell Grant Program from section 479A
for award year 1993-94. Consequently, financial aid administrators may
exercise professional judgment concerning a student's ability to pay
for his or her education when determining the student's eligibility for
a Federal Pell Grant. Based on that judgment, a financial aid
administrator may make adjustments to data elements submitted by the
student on his or her application, recalculate the expected family
contribution (EFC), and pay the student based on the new EFC. The
special conditions contained in subpart C of the current regulations
will, therefore, no longer be necessary for award year 1993-94.
Section 690.61 Submission Process and Deadline Date for Student Aid
Report or Institutional Student Information Report
The 1992 Amendments authorize and require a financial aid
administrator to pay a student his or her Federal Pell Grant based on
an output document produced by the central processor and sent directly
to the institution. Therefore, the Secretary proposes to allow an
institution to pay a student a Federal Pell Grant not only when the
student presents a valid Student Aid Report (SAR) but, under certain
circumstances, when the institution obtains a ``valid institutional
student information report'' from the central processor.
Section 690.62 Calculation of a Federal Pell Grant
The 1992 Amendments increase the amount of the minimum grant from
$200 to $400. The Secretary proposes to amend the language in
Sec. 690.92 to reflect this change and to provide that a student
eligible for a grant equal to or greater than $200, but less than $400,
shall be awarded $400. In addition, the 1992 Amendments eliminate the
Secretary's authority to adjust Federal Pell Grant awards due to
insufficient appropriations. Therefore, the Secretary proposes to
remove Sec. 690.62(c), which provides for adjustments for less-than-
full funding.
Section 690.63 Calculation of a Federal Pell Grant for a Payment
Period
The 1992 Amendments add new statutory language defining an
``academic year.'' The new definition no longer defines the minimum
academic year for a program using only one measure of length. Instead,
the new definition uses two minimum measures that must be met, and
these measures are, in many circumstances, different from the ones used
under the old definition. The new definition requires that an academic
year be a minimum of 30 weeks of instructional time in which a full-
time student is expected to complete at least (1) 24 semester or
trimester hours; (2) 36 quarter hours at an institution that measures
program length in credit hours; or (3) 900 clock hours at an
institution that measures program length in clock hours.
The 1993 Technical Amendments further amended section 481 of the
HEA definition of academic year to provide that the Secretary may
reduce, for good cause on a case-by-case basis, the 30-week minimum to
not less than 26 weeks of instructional time in the case of an
institution of higher education that provides a 2-year or 4-year
program of instruction for which it awards an associate or
baccalaureate degree. The Secretary is requesting comment on how to
implement this provision in another notice of proposed rulemaking for
subparts A and B of the Student Assistance General Provisions
regulations (34 CFR part 668) which will be published in the Federal
Register in the near future.
While the Secretary is amending the definition of ``academic year''
to comply with section 481 of the HEA, it is also necessary for the
Secretary to amend Sec. 690.63 to incorporate the new definition of
academic year, as defined in section 481 of the HEA, into the Federal
Pell Grant payment calculations. To implement this change for purposes
of Federal Pell Grant award calculations, each institution must define
its academic year for each of its programs in terms of the number of
credit hours or clock hours offered and the number of weeks of
instructional time during which those hours are provided. That
definition must satisfy the new statutory definition of an academic
year, i.e., at least 24 semester or trimester hours, 36 quarter hours,
or 900 clock hours, and at least 30 weeks of instructional time. The
institution may, of course, use the same definition of academic year
for each of its programs. In addition, an institution must determine if
its traditional definition of an academic year--2 semesters or
trimesters, or 3 quarters at an institution that measures program
length in credit hours, or at least 900 clock hours at an institution
that measures program length in clock hours--meets or exceeds 30 weeks
of instructional time as incorporated in the new statutory definition
of academic year.
Institutions with standard academic terms have traditionally
defined an academic year as the period of time in which a full-time
student is expected to complete two semesters or trimesters in the fall
and spring or three quarters in the fall, winter, and spring. These
institutions have not generally included additional or special terms
that it may offer, such as in the summer, as part of the academic year.
Therefore, the Secretary believes that many institutions with
semesters, trimesters, or quarters can satisfy the academic year
requirement in their regularly scheduled fall and spring semesters or
trimesters or fall, winter, and spring quarters.
The following discussions provide descriptions of the procedures
for calculating the amount of a student's payment for a payment period.
The Secretary recognizes that these procedures may be considered
complex and welcomes specific comment on any ways to simplify or better
present them that do not compromise program integrity or implementation
of the new definition of academic year.
Programs Using Standard Terms With at Least 30 Weeks of Instructional
Time as Described in Sec. 690.63(a)(1) With Awards Calculated Under
Sec. 690.63(b)
A student at a term institution may currently complete the credit-
hour requirements for an academic year in two semesters or trimesters,
fall and spring, or three quarters, fall, winter, and spring. Those
terms may total at least 30 weeks of instructional time and the
institution may require a student to enroll for at least 12 credit
hours for any term in the award year to be considered full-time.
Moreover, the institution may not offer the student's program with
multiple start dates or overlapping terms. If all conditions apply, the
institution continues to calculate the Federal Pell Grant payment in a
payment period, for all terms, in the same manner as that payment is
currently calculated. For example, an institution has fall and spring
semesters that when combined provide 24 semester hours of credit, 12
hours per semester for a full-time student, in 30 weeks of
instructional time. Therefore, a full-time student is paid up to one-
half of his or her Scheduled Award for each of the fall and spring
semesters. Further, 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.
Programs Using Standard Terms With Less Than 30 Weeks of Instructional
Time as Described in Sec. 690.63(a)(2) With Awards Calculated Under
Sec. 690.63(c)
A student at a term institution that measures its program in credit
hours may currently complete the credit-hour requirements for an
academic year in two semesters or trimesters, fall and spring, or three
quarters, fall, winter, and spring. However, the weeks in these terms
may total less than 30 weeks of instructional time, and the institution
may require a student to attend at least 12 hours for any term in the
award year to be considered full-time. Moreover, the institution may
not offer the student's program with multiple start dates or
overlapping terms. Under these conditions, the institution must prorate
the Federal Pell Grant award for a term based on the number of weeks of
instructional time in the two semesters or trimesters or three quarters
that it takes to complete the credit-hour requirements for an academic
year compared to the number of weeks of instructional time required to
complete the institution's academic year as defined by the institution
consistent with section 481 of the HEA. A payment for a payment period,
for all terms, is then determined from a student's award. For example,
an institution has two semesters, fall and spring, in which a student
attends 12 hours each semester to be considered a full-time student.
The two semesters have 28 weeks of instructional time. The institution
defines its academic year as 24 semester hours and 30 weeks of
instructional time. The institution must determine a full-time
student's award for the two semesters by multiplying the student's
Scheduled Award by 28 weeks of instructional time, the instructional
time in the fall and spring semesters, divided by the 30 weeks of
instructional time in the institution's academic year consistent with
section 481 of the HEA. The student will be eligible to be paid one-
half of his or her award as calculated by this formula for any term in
the award year. Further, the student will be eligible to be paid one-
half of his or her award as calculated by this formula, if he or she
has enough remaining eligibility, for the summer term.
Other Programs Using Terms and Credit Hours as Described in
Sec. 690.63(a)(3) With Awards Calculated Under Sec. 690.63(d)
These provisions apply to institutions that use terms, measure
progress in credit hours, and do not meet the provisions of Sec. 690.63
(a)(1) and (b) or Sec. 690.63 (a)(2) and (c). In addition, the
Secretary proposes to provide that institutions that meet the
requirements under Sec. 690.63 (a)(1) or (a)(2) to use the formulas in
Sec. 690.63 (b) or (c) may also use the formula in (d). The Secretary
believes that providing this option ensures that these institutions
will have the flexibility to handle any special circumstances that may
arise. If the terms are standard terms (i.e., semesters, trimesters, or
quarters), the institution must determine a student's enrollment status
and, based on that enrollment status, determine the student's award
from the Payment Schedule or one of the Disbursement Schedules (annual
award). Then, a student's payment for a payment period is determined by
multiplying the annual award by the number of weeks of instructional
time in the term divided by the number of weeks of instructional time
in the institution's academic year. For example, an institution uses
quarters and credit hours and those quarters begin each week throughout
the year. A full-time student is required to enroll for at least 12
credit hours per quarter. Each quarter provides 8 weeks of
instructional time. The institution defines its academic year as 36
quarter hours and 30 weeks of instructional time. A student's payment
for a payment period is calculated by: (1) Determining his or her
enrollment status; (2) based on that enrollment status, selecting his
or her annual award from the proper Payment or Disbursement Schedule;
and (3) multiplying the annual award by the fraction of the number of
weeks of instructional time in the term (8 weeks) divided by the number
of weeks of instructional time in the academic year (30 weeks). The
student's payment for a payment period would be 8/30 of the annual
award.
For programs at institutions using terms and credit hours, other
than semesters, trimesters, and quarters, the institution must first
determine a student's enrollment status before an award can be
calculated. If the terms are not semesters, trimesters, or quarters,
full-time enrollment status is determined by: (1) Dividing the number
of weeks of instructional time in the term by the number of weeks of
instructional time in the academic year; and (2) multiplying the credit
hours in the academic year by the number obtained in item 1. Once the
institution determines the number of credit hours for full-time
enrollment status in a term and determines what portion of full-time
equals three-quarter-time, half-time, or less-than-half-time enrollment
status, the institution must compare the number of hours the student is
enrolled to the number of hours required for full-time, three-quarter-
time, half-time, or less-than-half-time. Once enrollment status is
determined, the institution selects the appropriate Payment or
Disbursement Schedule to determine the student's annual award. The
institution then divides the number of weeks of instructional time in
the payment period by the number of weeks of instructional time in the
institution's academic year and calculates the student's payment for a
payment period by multiplying the annual award by results of the
fraction. For example, an institution has 4 nonstandard terms.
The first and fourth terms provide 4 weeks of instructional time,
the second term provides 8 weeks of instructional time, and the third
term provides 6 weeks of instructional time. The institution defines
its academic year as 30 credit hours and 30 weeks of instructional
time. A student enrolls for 6 credits during the first and fourth terms
of 4 weeks each, 12 credits for the second term of 8 weeks, and 6
credits during the third term of 6 weeks. To calculate the student's
enrollment status in the first and fourth terms, the institution
divides the number of weeks of instructional time in each term (4) by
the number of weeks of instructional time in the academic year (30).
The institution then multiplies the credit hours in its academic year
(30) by the fraction (\4/30\) to determine the student's enrollment
status ((30 (\4/30\))=4). The student must be enrolled for 4 credits to
be considered full time. Since the student is enrolled full time for 6
hours in the first term, the student's annual award is determined from
the Payment Schedule. To determine the payments for the first and
fourth terms, the institution divides the number of weeks in the terms
(4) by the number of weeks in the academic year (30). The institution
then multiplies the annual award by the results of that fraction (\4/
30\=.133). The enrollment status and payments for the other payment
periods are determined in the same manner.
Programs Using Clock Hours or Credit Hours Without Terms as Described
in Sec. 690.63(a)(4) With Awards Calculated Under Sec. 690.63(e)
At an institution that offers its programs using credit hours
without terms or clock hours, the institution calculates a student's
Federal Pell Grant for a payment period by: (1) Determining the
student's Scheduled Federal Pell Grant from the Payment Schedule; (2)
multiplying the student's Scheduled Award by the following fraction:
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 academic year divided by the number of weeks of
instructional time for a full-time student to complete the clock or
credit hours in the institution's academic year; and (3) multiplying
the amount determined in step 2 by the following fraction: the number
of credit or clock hours in the payment period divided by the number of
credit or clock hours in the institution's academic year.
For example, a student enrolls in a 1,200 clock-hour program at an
institution that defines its academic year as 900 clock hours and 30
weeks of instructional time. Each payment period is 450 clock hours,
and a full-time student completes the clock hours in the payment period
in 12 weeks of instructional time. To determine the student's payment
for a payment period, the institution must determine the student's
Scheduled Award using the Payment Schedule. The institution then must
multiply the student's Scheduled Award by the number of weeks of
instructional time that it takes a full-time student to complete the
clock hours in the academic year divided by the number of weeks of
instructional time in the academic year (24/30 = .8). The institution
multiplies that amount by the number of clock hours in the payment
period divided by the number of clock hours in the academic year (450/
900 = .5).
Section Sec. 690.65 Transfer Student: Attendance at More Than One
Institution During an Award Year
Because the 1992 Amendments authorize and require a financial aid
administrator to pay a student his or her Federal Pell Grant based on
receipt of a valid institutional student information report produced by
the central processor that is sent directly to the institution, the
Secretary proposes to amend Sec. 690.65 to incorporate the use of the
institutional student information report into the procedures for paying
transfer students. The use of an institutional student information
report to, in some instances, pay a student a Federal Pell Grant
eliminates the SAR as the only document from which a student can be
paid.
Section 690.75 Determination of Eligibility for Payment
The 1992 Amendments allow a student attending an institution on a
less-than-half-time basis to receive a Federal Pell Grant. Prior to the
1992 Amendments, a less-than-half-time student was only eligible under
certain restricted conditions. Therefore, the Secretary proposes to
amend the regulations to incorporate less-than-half-time students into
the requirements for determining the eligibility of a student for
payment.
The Secretary proposes to limit the eligibility of an incarcerated
student for a Federal Pell Grant as required under amended section
401(b)(8) of the HEA. A student incarcerated under a sentence of death
or life without eligibility for parole or release would not be eligible
to receive a Federal Pell Grant. In addition, the HEA provides that for
an incarcerated student to receive a Federal Pell Grant, the State in
which the student is incarcerated must demonstrate to the Secretary
that it uses Federal Pell Grants to supplement, not supplant, the
postsecondary assistance provided incarcerated students in fiscal year
1988. The Secretary has determined that this provision applies only to
students who are incarcerated by a State. Federally incarcerated
students are not covered by this provision. Under the proposed
regulations, the Secretary requires a State to submit an annual report
to demonstrate its continuing financial commitment to assisting
incarcerated students to receive postsecondary education assistance.
In a May 7, 1993 letter to the Governor of each State, the
Secretary provided a form for the 1993-94 award year. Using the form,
each State can provide the information necessary to determine if that
State is currently using Federal Pell Grant funds to supplement and not
supplant State postsecondary assistance provided to incarcerated
students in fiscal year 1988. The form for the 1993-94 award year did
not require, as do the proposed regulations, that a State provide the
data by individual categories. The Secretary believes that the
categories assist a State in determining sources of postsecondary
assistance provided to incarcerated students, and the State must
consider these categories to arrive at a total amount. The Secretary
also believes that providing the information by individual categories
will assure that the information is more accurate while imposing
minimal additional burden on the State. However, the Secretary is
requesting comment on whether providing the data by individual
categories imposes an additional burden on States and, if so, whether
commenters believe that the benefits of more accurate information may
outweigh the additional burden.
Section 690.77 Initial Disbursement of a Federal Pell Grant in an
Award Year Without a Valid SAR or Valid Institutional Student
Information Report
The Secretary has proposed an amendment to Sec. 690.77 to allow an
institution to make an initial Federal Pell Grant disbursement before
receiving a valid SAR or valid institutional student information report
sent to the institution from the central processor. The Secretary is
proposing this amendment to include payment of an initial disbursement
before receiving the valid institutional student information report
provided for in the amendment to section 401(f) of the HEA.
Notwithstanding the proposed amendment, the Secretary is also
considering removing Sec. 690.77 due to the rapid delivery of
institutional student information reports to institutions, the
increased use of the Department's electronic programs in the Federal
application processing system, and the growing number of mandated
Federal requirements, such as matching applicant information with other
Federal agency data bases. The Secretary specifically requests comment
concerning the possible deletion of this section.
Section 690.80 Recalculation of a Federal Pell Grant Award
Because there is no longer statutory authority requiring the use of
the provision in subpart C, the Secretary proposes to amend Sec. 690.80
to remove the references to sections in subpart C. Those sections
provided for a student to apply for a Federal Pell Grant using expected
year income instead of base year income if the student or his or her
family met special conditions.
Section 690.82 Maintenance and Retention of Records
The Secretary proposes to amend the recordkeeping requirements in
the regulations to require an institution to maintain the SARs or
institutional student information reports only for those students who
receive Federal Pell Grants. Currently, an institution is required to
keep SARs on file for every student who submits one to the institution,
regardless of whether the student receives assistance from the
institution. The Secretary believes that the current recordkeeping
requirement in Sec. 690.82 is unnecessary if the student did not
receive a Federal Pell Grant. All other recordkeeping requirements of
other title IV HEA programs would still apply.
Presidential Access Scholarship Program
The proposed regulations for the Presidential Access Scholarship
(PAS) Program would implement the PAS Program as enacted under title
IV, part A, subpart 2, chapter 3 of the amended HEA. Funds for the PAS
Program were not appropriated for fiscal year 1993 (the 1993-94 award
year) or 1994 (the 1994-95 award year). As indicated in the Conference
Report for the 1992 Amendments to the HEA, the purposes of the PAS
Program are to (1) encourage students to finish high school and attend
college and (2) to upgrade the course of study completed by high school
graduates who are from low or moderate-income families. The PAS Program
supports National Education Goal 2, which calls for the high school
graduation rate in the United States to reach at least 90 percent;
National Education Goal 3, which calls for students to learn to use
their minds well so they will be prepared for responsible citizenship,
further learning, and productive employment in our modern economy; and
National Education Goal 5, which calls for every adult American to be
literate and possess the knowledge and skills to compete in a global
economy and exercise the rights and responsibilities of citizenship.
One of the eligibility requirements for a student to qualify for a
PAS award is based directly on his or her eligibility for a Federal
Pell Grant award. The Secretary has developed a functional delivery
system for providing Federal Pell Grant funds to a student through his
or her institution. Because the amount of the PAS award is based on the
amount of a student's Federal Pell Grant and the PAS can easily be
incorporated into the Federal Pell Grant delivery system, the Secretary
believes that this system is the best method for providing a student
with his or her PAS award. The Secretary, therefore, is proposing
regulations describing the requirements for a participating
institution's administration of the program. The proposed regulations
for the PAS Program duplicate, or are as similar as possible to, the
Federal Pell Grant Program regulations. The Secretary believes that
coordinating the administrative requirements of the PAS Program with
the Federal Pell Grant Program will assist participating institutions
in administering both programs, reduce the amount of additional
institutional administrative burden and paperwork, and simplify the
process for students to apply for assistance under these programs.
The proposed PAS regulations that clarify or amplify the statutory
requirements are explained below.
Subpart B--Application Procedures and Eligibility Requirements
Section 406C(b) of the HEA specifies that an eligible student shall
submit an application to the Secretary. Section 691.12 of the proposed
regulations requires that the student apply for a PAS at the same time
the student applies for a Federal Pell Grant. The Secretary believes
that because a student is eligible to receive a PAS only if he or she
is eligible to receive a Federal Pell Grant, it is a matter of
administrative convenience for a student, his or her institution, and
the Secretary if a single application is submitted for both programs.
Sections 406C and 406E of the HEA specify the eligibility
requirements for students to apply for, receive, and continue to
receive a PAS. The proposed regulations have incorporated these
requirements in Secs. 691.15, 691.16, and 691.17. These sections
include the following requirements: (1) The student be scheduled to
graduate from high school or be a high school graduate, or the
recipient of the equivalent of a high school diploma as recognized by a
State, within 3 years of being accepted for enrollment or enrolling at
an institution of higher education; (2) the student have taken certain
specified college preparatory coursework in high school and achieved a
minimum 2.5 grade point average in the final two years of high school;
(3) the student have participated, with limited exceptions, in a
federally sponsored or federally approved early-intervention program or
have graduated in the top 10 percent of his or her high school class;
and (4) to continue to receive an award, the student must remain
eligible for a Federal Pell Grant and be maintaining satisfactory
academic progress at his or her institution.
It should be noted that the definition of eligible early-
intervention program at Sec. 691.2 includes the National Early
Intervention Scholarship and Partnership Program as authorized by
section 404A of the HEA. Regulations for this program have not yet been
promulgated. When they are, however, they will be incorporated into
these regulations.
The Secretary believes that if an applicant who did not graduate in
the top 10 percent of his or her high school class was unable to
participate in an early intervention program where the applicant
resides due to unusual or exceptional circumstances, the applicant
should not be prevented from participating in the PAS Program.
Therefore, Sec. 691.16 implements a waiver for those students not
graduating in the top 10 percent of their class. However, an applicant
who simply chooses not to participate in an early intervention program
should not receive PAS Program funds. The Secretary believes that this
interpretation is consistent with the statute. The requirement that an
applicant take certain specified college preparatory classes cannot be
waived under the statute. The regulations mirror this requirement but
also permit an applicant who was unable to take the required high
school coursework where he or she resides to complete that coursework
at another high school or community college. The applicant must be able
to demonstrate that he or she has completed the required coursework
before the applicant receives a PAS award.
Subpart F--Determination of Awards
Subpart F of the proposed regulations includes instructions for
determining the amount of an award for any academic year and for a
specific payment period. This determination is based on the amount of
the Federal Pell Grant a student is eligible to receive. Procedures are
proposed for receiving a valid SAR or valid institutional student
information report and for calculating an award when the payment period
crosses over 2 award years. In addition, the Secretary proposes to
establish institutional requirements regarding transfer students,
correspondence students, and exceptions to the maximum PAS award when a
student is eligible for more than one Scheduled Federal Pell Grant
within an award year.
Subpart G--Institutional Administration
Subpart G of the proposed regulations establishes requirements
under which institutions must administer the PAS Program. As proposed,
in order to participate in the PAS Program, an institution would be
required to include the PAS Program in its agreement with the Secretary
under 34 CFR 668.12. To implement this requirement, the Secretary
intends to propose amending 34 CFR 668.1(c) to include the PAS Program
in a separate notice of proposed rulemaking amending subparts A and B
of the Student Assistance General Provisions regulations. As a result,
all the relevant provisions of 34 CFR part 668 would apply to the PAS
Program. If the institution withdraws or is terminated from the
program, provisions will be proposed that prescribe how an institution
must disburse funds to a student. Also, this proposed subpart would
provide guidance on fiscal accounting procedures, retention of records,
and submission of reports. As in the Federal Pell Grant Program, the
Secretary specifically is requesting comment concerning the need for
proposed Sec. 691.77 and also concerning the proposed administrative
burden on institutions to administer the program.
Subpart H--Administrative Responsibilities of a State
Because section 406F(a) of the HEA requires that a State enter into
an agreement with the Secretary in order for students residing in that
State to receive a PAS, proposed Sec. 691.90 describes the contents of
the agreement. In addition, proposed Sec. 691.91 establishes the
records a State must maintain and the length of time a State must keep
those records.
Executive Order 12866
These proposed 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 the regulatory action.
The potential costs associated with the proposed 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
collection requirements, if any, are identified and explained elsewhere
in this preamble under the heading Paperwork Reduction Act of 1980.
In assessing the potential cost and benefits--both quantitative and
qualitative--of these proposed regulations, the Secretary has
determined that the benefits of the proposed regulations justify the
costs.
The Secretary has also determined that this regulatory action does
not unduly interfere with State governments in the exercise of their
governmental functions.
To assist the Department in complying with the specific
requirements of Executive Order 12866, the Secretary invites comment on
whether there may be further opportunities to reduce any potential
costs or increase potential benefits resulting from these proposed
regulations without impeding the effective and efficient administration
of the program.
Regulatory Flexibility Act Certification
The Secretary certifies that these proposed regulations would not
have a significant economic impact on a substantial number of small
entities. States entering into an agreement with the Secretary are not
defined as ``small entities'' in the Regulatory Flexibility Act. The
small entities that would be affected by these proposed regulations are
small institutions of higher education. However, these proposed
regulations would not have a significant economic impact on the small
institutions affected because, although certain reporting and
recordkeeping requirements are imposed on participating institutions,
these requirements are modeled on existing student financial assistance
programs requirements already imposed on these institutions under title
IV of the Higher Education Act of 1965, as amended. Therefore, the
Secretary has determined that these provisions will have minimal impact
on the small institutions of higher education.
Paperwork Reduction Act of 1980
Sections 690.13, 690.75, 690.77, 690.82, 691.7, 691.9, 691.12,
691.61, 691.73, 691.79, 691.81, 691.82, 691.83, 691.90, and 691.91
contain information collection requirements for the Federal Pell Grant
Program and the PAS Program. As required by the Paperwork Reduction Act
of 1980, the 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 proposed 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 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.
Presidential Access Scholarship Program
Annual public reporting and recordkeeping burden for this
collection of information is estimated to average: (1) 3 hours per
response for 57 States and Territories; (2) 1 hour per response for
390,000 applicants; and (3) 3 hours per response for 10,000
institutions. The total hours for States, applicants, and institutions
are 420,171 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.
Invitation To Comment: Interested persons are invited to submit
comments and recommendations regarding these proposed regulations.
All comments submitted in response to these proposed regulations
will be available for public inspection, during and after the comment
period, in room 4018, Regional Office Building 3, 7th and D Streets
SW., Washington, DC, between the hours of 8:30 a.m. and 4 p.m., Monday
through Friday of each week except Federal holidays.
To assist the Department in complying with the specific
requirements of Executive Order 12291 and the Paperwork Reduction Act
of 1980 and their overall requirement of reducing regulatory burden,
the Secretary invites comment on whether there might be further
opportunities to reduce any regulatory burdens found in these proposed
regulations.
Assessment of Impact
The Secretary particularly requests comments on whether the
proposed regulations in this document would 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
34 CFR Part 690
Administrative practice and procedure, Colleges and universities,
Education, Grant programs--education, Reporting and recordkeeping
requirements, Student aid.
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: February 17, 1994.
Richard W. Riley,
Secretary of Education.
The Secretary proposes to amend 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, 690.12,
subpart F, 690.62, 690.64, 690.65, 690.66, 690.71, 690.72, 690.73,
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) Section 690.12(a);
(j) Subpart F heading;
(k) Section 690.62(a);
(l) Section 690.64 heading, (a)(2), and (b);
(m) Section 690.65(d) introductory text, (d)(1), (d)(3), and (e)
(three times);
(n) Section 690.66(b)(1) introductory text, (b)(1)(i), (b)(1)(ii),
(c)(1) introductory text, (c)(1)(i), (c)(1)(ii), and (c)(5);
(o) Section 690.71;
(p) Section 690.72(a);
(q) Section 690.73(b)(2), (b)(3), and (b)(4);
(r) Section 690.75(a) introductory text, (a)(3)(i), (a)(3)(ii),
(c), and (d) (twice);
(s) Section 690.78(c) introductory text;
(t) Section 690.79(a)(1) and (a)(2);
(u) Section 690.81(a)(2) and (b) (twice); and
(v) 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. Section 690.2 paragraph (b) is amended by adding in alphabetical
order the term ``Federal Pell Grant Program'' and removing the terms
``Academic year'' and ``Pell Grant Program''.
6. Section 690.2 paragraph (c) is amended by removing the
definition of ``Pell Grant Index''; by adding, in alphabetical order,
new definitions of ``Academic year'', ``Annual award'', ``Central
processor'', ``Expected family contribution'', ``Incarcerated
student'', ``Institutional student information report'', ``Less-than-
half-time student'', and ``Valid institutional student information
report''; and by revising the definitions of ``Disbursement Schedule'',
paragraph (1) under ``Enrollment status'', and ``Payment Schedule'' to
read as follows:
Sec. 690.2 General Definitions
* * * * *
(c) * * *
Academic year: An academic year as defined in section 481 of the
HEA.
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 data, transmits an institutional
student information report to each institution designated by the
applicant, and submits reports to the Secretary on the correctness of
the central processor's computations of the amount of the expected
family contribution and the accuracy of the answers to questions on the
application form for the previous academic year.
* * * * *
Disbursement Schedule: A table showing the grant amounts 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 Higher Education Act of 1965
(HEA), as amended; and
(2) A student's attendance costs as defined in title IV, part F of
the HEA.
* * * * *
Enrollment status: (1) 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 an applicant and his
or her spouse and family are expected to pay toward the student's cost
of attendance.
* * * * *
Incarcerated student: A student serving a criminal sentence in a
Federal, State, or local penitentiary, prison, jail, reformatory, work
farm, or other similar correctional institution. A student who is in a
``half-way house'' or ``home detention'' or is sentenced to serve only
weekends is not considered incarcerated.
* * * * *
Institutional student information report: A paper document or an
institutional paper printout from a computer-generated electronic
record that the central processor transmits to the 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 a
less-than-half-time academic work load--as determined by the
institution--that amounts to 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 a given award 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; and
(2) The student's cost of attendance as defined in part F of title
IV.
* * * * *
Valid institutional student information report: An institutional
student information report--
(1) 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;
(2) That is signed by the applicant; and
(3) That, if corrections are made, is signed--
(i) By the applicant's spouse; and
(ii) If the applicant is dependent, by one of his or her parents.
* * * * *
7. Section 690.3 is amended by revising (b) introductory text,
(b)(1), and (b)(2), removing (b)(3), and redesignating (b)(4) as
(b)(3):
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) (A) The first payment period is the period of time in which the
student completes the first half of his or her academic year or the
first half of his or her program (in credit or clock hours); and
(B) The second payment period is the period of time in which the
student completes the second half of the academic year or the second
half of his or her program (in credit or clock hours); or
(ii) At an institution measuring progress in credit hours, if a
student cannot earn half the credits in the academic year or program
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--
(A) The calendar midpoint between the first and last scheduled days
of class of the program or academic year; or
(B) The date, as determined by institution, that the student has
completed half of his or her academic coursework.
(2) For a student whose program is more than one academic year in
credit or clock hours, the payment periods must be calculated under
paragraph (b)(1) of this section unless the remaining portion of the
program is less than an academic year. If the remaining portion of the
program is less than an academic year, each payment period must be the
period of time in which a student first completes--
(i) One-half of the academic year as determined under the
provisions in (b)(1); or
(ii) The remaining hours in the student's program.
* * * * *
8. Section 690.6 is amended by removing paragraphs (c), (d), and
(e), and by amending paragraph (b) by adding a second sentence 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)
9. 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
Number of course load
credit Number of in credit
Under Sec. 691.8 hours credit hours hours to Enrollment status
regular correspondence determine
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.
----------------------------------------------------------------------------------------------------------------
1Any combination of regular and correspondence work that is greater than 0, but less than 6 hours.
10. 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)
11. Section 690.13 is amended by revising the first sentence to
read as follows:
Sec. 690.13 Notification of expected family contribution.
The Secretary sends a ``Student Aid Report'' (SAR) to each eligible
applicant and an institutional student information report to each
institution designated by the applicant. * * *
Subpart C--[Removed and Reserved]
12. Subpart C is removed and reserved.
13. 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 report.
(a) Submission process. (1) Except as provided in paragraph (a)(2)
of this section, an institution may make a disbursement of a Federal
Pell Grant to a student only if--
(i) The student has submitted a valid SAR to the institution; or
(ii) The institution--
(A) Has obtained a valid institutional student information report
for that student; and
(B) Participates in the Secretary's electronic programs (Recipient
Data Exchange, Electronic Data Exchange, or ``Floppy Disk'' Exchange)
to report Federal Pell Grant disbursements; and
(C) Uses that institutional student information report to determine
the student's eligibility to receive his or her Federal Pell Grant.
(2) An institution may make one disbursement of a student's Federal
Pell Grant without a valid SAR or valid institutional student
information report if it follows the procedures described in
Sec. 690.77.
(3) An institution is entitled to rely on valid SAR information or
valid institutional student information report information except under
the conditions set forth in 34 CFR 668.14(f) and 668.60.
(b) Student Aid Report or institutional student information report
deadline. (1) Except as noted 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 receive a valid institutional student information
report by June 30 of that award year.
(2) Except as noted 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 receive a valid institutional student information report while the
student is still enrolled and eligible for payment at that institution.
(Authority: 20 U.S.C 1070a)
14. Section 690.62 is amended by revising the heading of the
section, 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 Scheduled
Federal Pell Grant is less than $200. However, a student who is
eligible for a Federal Pell Grant that is equal to or greater than
$200, but less than or equal to $400, shall be awarded a Federal Pell
Grant of $400.
15. 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 paragraph (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 multiple start dates or 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 multiple start dates or 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.
(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 institution'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) Either--
(i)(A) Multiplying his or her annual award determined under
paragraph (c)(2) of this section by the following fraction as
applicable:
At an institution using semesters or trimesters--
TP25FE94.010
; or
At an institution using quarters--
TP25FE94.011
; and
(B) Dividing the amount determined under paragraph (c)(3)(i)(A) of
this section by two at institutions using semesters or trimesters or
three at institutions using quarters; or
(ii) Dividing the student's annual award determined under paragraph
(c)(2) 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 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 institution's academic year.
(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 (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 weeks of instructional time in the term by
the number of weeks of instructional time in the institution's academic
year;
(B) Multiplying the fraction determined under paragraph
(d)(1)(ii)(A) by the number of credit hours in the institution'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 calculating the
proportion of 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;
(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:
TP25FE94.012
; 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 Scheduled Award by--
TP25FE94.013
; and
(3) Multiplying the amount determined under paragraph (e)(2) of
this section by--
TP25FE94.014
(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 institution's academic year.
(g) Notwithstanding paragraphs (b), (c), (d), (e), and (f) of this
section--
(1) 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; and
(2) An incarcerated student's Federal Pell Grant shall not exceed
the sum of the amount of tuition and fees normally assessed for that
course of study by the institution plus the actual cost of books and
supplies.
(h) For purposes of this section, an institution must define its
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 section 481(d) of the HEA.
16. 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 grant 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 disbursements
(Recipient Data Exchange, Electronic Data Exchange, or ``Floppy Disk''
Exchange) and the second institution has obtained a valid institutional
student information report, in which case the institution shall use the
information from the valid institutional student information report 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.)
* * * * *
(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.
* * * * *
(f) A transfer student shall repay any amount received in an award
year that exceeds his or her Scheduled Federal Pell Grant.
Sec. 690.73 [Amended]
17. Section 690.73(b)(1) is amended by adding after the word
``institution'' the words ``or for whom the institution received a
valid institutional student information report''.
18. Section 690.75 is amended by revising paragraphs (a)(2), and
(b), and by adding new paragraphs (f), (g), and (h) 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 institutional student information
report 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.
* * * * *
(f) If the student is an incarcerated student, the student is
eligible to receive a Federal Pell Grant if--
(1) (i) The State in which the student is incarcerated has
submitted, and the Secretary has approved, a report as described in
Sec. 690.75(g); or
(ii) The student is a federally incarcerated student in any state;
and
(2) The student is not under sentence of death or under sentence of
life imprisonment without eligibility for parole or release.
(g) For an eligible incarcerated student to receive funds during an
award year, the State in which the student is incarcerated must file a
report annually on a form approved by the Secretary. The report
confirms that the State expended as much on postsecondary educational
assistance for incarcerated students during the Federal fiscal year
prior to the year in which an incarcerated student is otherwise
eligible to receive a Federal Pell Grant as was expended by the State
for incarcerated students in Federal fiscal year 1988. For purposes of
this report, States must provide information about State postsecondary
educational expenditures for incarcerated students for the Federal
fiscal year prior to the year in which the student is eligible and
Federal fiscal year 1988. The report must include fiscal information
about the following--
(1) Appropriated funds, including funds appropriated to State
Departments of Correction or other State agencies, expended for
postsecondary education assistance to incarcerated students;
(2) Tuition waivers for postsecondary incarcerated students;
(3) Tuition reimbursements for postsecondary incarcerated students;
(4) State postsecondary educational assistance programs where the
funds are expended for incarcerated students (except the Federal
portion of any grant under the State Student Incentive Grant Program,
and any other Federal postsecondary assistance);
(5) Special school district funding for postsecondary education for
incarcerated students; and
(6) Any other funds expended on postsecondary educational
assistance for incarcerated students, excluding any Federal assistance.
(h) For each payment period during which an incarcerated student is
otherwise eligible, the institution may make payments to the student
only if the State has submitted its annual report and the Secretary
approved that report prior to the payment period during which the
student is eligible to be paid. The institution shall not make payments
to an incarcerated student for payment periods during which the student
was enrolled and eligible but the State's annual report was not
submitted and approved by the Secretary.
19. Section 690.77 is revised to read as follows:
Sec. 690.77 Initial disbursement of a Federal Pell Grant in an award
year without a valid SAR or valid institutional student information
report.
(a) Within an award year, an institution may make one disbursement
of a student's Federal Pell Grant before receiving the student's valid
SAR or valid institutional student information report if the
institution--
(1) Receives a student's application information;
(2) Does not have documentation that indicates that the application
information is inaccurate; and
(3) Receives an EFC--
(i) From the Secretary; or
(ii) From an organization that has a contract with the Secretary to
transmit application data to the Secretary.
(b) If an institution receives a student's application information
specified in paragraphs (a)(1) and (a)(3) of this section and his or
her EFC from the Secretary, or his or her EFC as calculated by the
Secretary from an organization that has a contract to transmit
application data to the Secretary, but the institution has
documentation that indicates that the application information is
inaccurate, the institution may make one disbursement of a student's
Federal Pell Grant within an award year before receiving the student's
valid SAR or valid institutional student information report if the
institution--
(1) Resolves the inconsistencies between its documentation and the
student's application information;
(2) Recalculates the student's EFC based on correct information;
(3) Makes the disbursement of the student's Federal Pell Grant for
the first payment period based on the recalculated EFC; and
(4) Reports the changes in the student's application information
and the recalculated EFC to the Secretary within the deadline
established by the Secretary.
(c)(1) If an institution chooses to make a disbursement under
paragraph (a) or (b) of this section, it shall be liable for that
disbursement if the institution does not receive a valid SAR or valid
institutional student information report for the student for that award
year.
(2) If an institution chooses to make a disbursement under
paragraph (b) of this section, the institution and the student shall be
liable for any overpayment caused by an incorrect recalculation of the
student's EFC.
(3) If a student receives an overpayment as a result of a
disbursement made under paragraph (a) or (b) of this section, the
institution shall eliminate the overpayment by following the procedures
described in 34 CFR 668.61(a).
(Authority: 20 U.S.C. 1070a)
20. Section Sec. 690.80 is amended by revising 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 in Sec. 690.12 or
Sec. 690.77.
(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.
* * * * *
21. Section 690.82 is amended by revising paragraphs (a)
introductory text and (a)(1) 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 institutional student information
report 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 institutional student information report;
* * * * *
22. 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 Definitions of 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 Initial disbursement of a PAS in an award year without a
valid SAR or institutional student information report.
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
Clock hour
program
Program of study by correspondence
Recognized equivalent of high school diploma
Secretary
(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:
Award year
Enrolled
Federal Pell Grant Program
Public or private nonprofit institution of higher education
Regular student
State
(c) Other terms used in this part are:
Academic year: An academic year as defined in section 481 of the
HEA.
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 institutional
student information report to each of the institutions designated by
the applicant, and submits reports to the Secretary on the correctness
of the central processor's computations of the amount of the expected
family contribution and the accuracy of the answers to questions on the
application form for the previous academic year.
Disbursement Schedule: A table showing the scholarship amounts for
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, published annually by the Secretary, is based on the
amount of a student's Federal Pell Grant.
Electronic Data Exchange: An electronic exchange system between the
Secretary and an institution under which a student is able to correct
or verify information contained on his or her SAR at the institution he
or she is attending and the institution is able to print out a SAR for
that student that is based on the corrected or verified information.
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.
Eligible institution: An institution as defined in section 481 of
the HEA.
Eligible program: A program as defined in section 481 of the HEA.
Expected family contribution (EFC): The amount a student and his or
her spouse and family are expected to pay toward the student's cost of
attendance.
Full-time student: An enrolled student who is carrying a full-time
academic work load (other than by correspondence)--as determined by the
institution--under a standard applicable to all students enrolled in a
particular program. However, an institution's full-time standard must
equal or exceed one of the following minimum requirements:
(1) 12 semester hours or 12 quarter hours per academic term in an
institution using a semester, trimester, or quarter system;
(2) 24 semester hours or 36 quarter hours per academic year for an
institution using credit hours but not using a semester, trimester, or
quarter system, or the prorated equivalent for a program of less than 1
academic year;
(3) 24 clock hours per week for an institution using clock hours;
(4) In an institution using both credit and clock hours, any
combination of credit and clock hours where the sum of the following
fractions is equal to or greater than one:
TP25FE94.015
(5) A series of courses or seminars which equal 12 semester hours
or 12 quarter hours in a maximum of 18 weeks; or
(6) The work portion of a cooperative education program in which
the amount of work performed is equivalent to the academic workload of
a full-time student.
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.
Institution of higher education (Institution): An institution of
higher education, a proprietary institution of higher education, or a
postsecondary vocational institution as defined in section 481 of the
HEA.
Institutional student information report: A paper document or an
institutional paper printout from a computer-generated electronic
record that the central processor transmits to the institution, which
includes an applicant's--
(1) Personal identifying 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 a
less than half-time academic work load--as determined by the
institution--that amounts to less than half the work load of the
appropriate minimum requirement outlined in the 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.
Scheduled Presidential Access Scholarship: The amount of a PAS that
would be paid to a full-time student for a full academic year.
Student Aid Report (SAR): A report provided to an applicant showing
the amount of his or her expected family contribution.
Student Aid Report (SAR) Payment Document: A part of the SAR that
is provided to the Secretary by an institution showing an applicant's
expected family contribution, cost of attendance, and enrollment status
at that institution.
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 report: An institutional
student information report--
(1) 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;
(2) That is signed by the applicant; and
(3) That if corrections are made, is signed--
(i) By the applicant's spouse; and
(ii) If the applicant is dependent, by one of his or her parents.
Valid Student Aid Report: A Student Aid Report--
(1) On which all of the information used in the calculation of the
applicant's expected family contribution is accurate and complete as of
the date the application is signed; and
(2) For the Electronic Data Exchange, that is signed by the
applicant and, if corrections are made--
(i) Is signed by the applicant's spouse; and
(ii) If the applicant is dependent, is signed by one of his or her
parents.
(Authority: 20 U.S.C. 1070a--31 et seq.)
Sec. 691.3 Definitions of 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 period for an institution that does not have academic
terms:
(1) For the first academic year for a student--
(i) The first payment period is the period of time in which the
student completes the first half of his or her academic year (in credit
hours or clock hours);
(ii) The second payment period is the period of time in which the
student completes the second half of that academic year.
(2) For subsequent academic years, or fractions of academic years,
each payment period must be the period of time in which a student
completes--
(i) One-half of the academic year; or
(ii) The remaining hours in the student's program, whichever is to
be completed first.
(3) For a student whose remaining program is less than an academic
year--
(i) The first payment period must be the period of time in which
the student completes the first half of his or her remaining program
(in credit or clock hours); and
(ii) The second payment period must be the period of time in which
the student completes the second half of his or her remaining program.
(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 institutional student information report
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.
(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
Number of course load
credit Number of in credit
Under Sec. 691.8 hours credit hours hours to Enrollment status
regular correspondence determine
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.
(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.
(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 gradepoint 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 Sec. 668.7(c) of 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. (1) Except as provided in paragraph (a)(2)
of this section, an institution makes a disbursement of a PAS to a
student only if--
(i) (A) The student has submitted a valid Student Aid Report (SAR)
to that institution; or
(B) The institution has obtained a valid institutional student
information report for that student, the institution participates in
the Secretary's electronic programs (Recipient Data Exchange,
Electronic Data Exchange, or ``Floppy Disk'' Exchange) to report
Federal Pell Grant disbursements, and the institution uses that
institutional student information report for the student to receive his
or her PAS; and
(ii) (A) 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
(B) 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).
(2) An institution may make one disbursement of a student's PAS
without a valid SAR or valid institutional student information report
if it follows the procedures described in Sec. 691.77.
(3) An institution may rely on valid SAR information or
institutional student information report information except under
conditions set forth in 34 CFR 668.14(f) and 668.60.
(b) Student Aid Report or institutional student information report
deadline.
(1) Except as noted in 34 CFR 668.60, to receive a PAS for an award
year, a student shall submit to his or her institution the relevant
parts of the SAR or the institution shall receive a valid institutional
student information report by June 30 of that award year.
(2) Except as noted in 34 CFR 668.60, for a student to receive a
PAS for an award year, the student shall submit to his or her
institution the relevant parts of the SAR or the institution shall
receive a valid institutional student information report while the
student is still enrolled and eligible for payment at that institution.
(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
(c)(1) If an eligible program uses academic terms and offers a
series of minisessions that occur in 2 award years, the combined
sessions must be treated as one term. A student may not receive more
that one term's award for completing any combination of these
minisessions.
(2) For each minisession, an institution that uses academic terms
in an eligible program shall determine the student's enrollment status
for the entire term. That enrollment status must be based on--
(i) The total number of credits for which the student enrolled in
all sessions if that number is known when the award is calculated; or
(ii) A projected number of credits based on the credits enrolled
for in the first session, if the number of credits to be taken in
subsequent sessions is unknown when the award is calculated.
(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 (Recipient Data Exchange, Electronic Data Exchange,
or ``Floppy Disk'' Exchange) to report Federal Pell Grant disbursements
and the second institution obtains a valid institutional student
information report, in which case the institution shall use the
information from the institutional student information report to
determine the student's PAS.
(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.
A student enrolled in an eligible program of study by
correspondence must be paid according to the following procedures:
(a) The institution shall determine the length of each
correspondence program it offers by preparing a written schedule for
submission of lessons, reflecting a work load of at least 12 hours of
preparation per week.
(b)(1) For an institution, if there is not a required period of
residential training in the program, a student's PAS for an academic
year is calculated by--
(i) Determining the student's PAS award based on Sec. 691.62; and
(ii) Multiplying the Scheduled PAS by one-half.
(2) An academic year must consist of two payment periods. The first
payment period must be the period of time in which the student
completes the first half of his or her academic year. The second
payment period must be the period of time in which the student
completes the second half of the academic year.
(3) For the first payment period, the institution shall pay the
student one-half of the amount calculated in paragraph (b)(1)(ii) of
this section after he or she has submitted 25 percent of the lessons or
otherwise completed 25 percent of the work scheduled for the academic
year or for the program if the program is less than an academic year.
(4) The institution shall make the final payment for the second
payment period after the student has submitted 75 percent of the
lessons or otherwise completed 75 percent of the work scheduled for the
academic year or for the program.
(c) (1) For an institution, if there is a required period of
residential training in the program, a student's PAS for an academic
year is calculated by--
(i) Determining the student's PAS award according to Sec. 691.62,
and;
(ii) Multiplying the Scheduled PAS by one-half.
(2) The nonresidential portion of an academic year must consist of
two payment periods. The first payment period must be the period of
time in which the student completes the first half of his or her
academic year or the nonresidential portion of the program if it is
less than an academic year. The second payment period must be the
period of time in which the student completes the second half of the
academic year or nonresidential portion of the program.
(3) For the first payment period, the institution shall pay the
student one-half of the amount calculated in paragraph (c)(1)(ii) of
this section after he or she has submitted 25 percent of the
nonresidential lessons or otherwise completed 25 percent of the work
scheduled for the academic year or for the program if the program is
less than an academic year.
(4) The institution shall make the final payment (for the
nonresidential portion of the program) for the second payment period
after the student has submitted 75 percent of the nonresidential
lessons or otherwise completed 75 percent of the work scheduled for the
academic year or for the program.
(5) A student's PAS disbursement for the residential portion of the
program is calculated according to the procedures in Sec. 691.63(c) for
a student enrolled in a regular course of study at an institution that
measures progress by clock hours.
(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.
(a) Termination by the Secretary. The Secretary may terminate the
agreement with an institution by giving the institution--
(1) Thirty days written notice; or
(2) Less than 30 days written notice if a shorter notice is
necessary to prevent the likelihood of a substantial loss of funds to
the Federal government or to students.
(b) Information required. An institution shall provide the
following information to the Secretary if the Secretary terminates the
agreement:
(1) The name and enrollment status of each eligible student who
submitted a valid SAR to the institution or for whom the institution
obtained a valid institutional student information report before the
termination date.
(2) The amount of funds the institution paid to PAS recipients for
the award year in which the agreement is terminated.
(3) The amount due to each student eligible to receive a PAS
through the end of the award year.
(4) An accounting of PAS expenditures to the date of termination.
(c) Termination by the institution. An institution may terminate
the agreement by giving the Secretary written notice. The termination
becomes effective on June 30 of that award year. The institution shall
carry out the agreement for the remainder of that award year.
(d) Termination because of a change in ownership which results in a
change of control. The agreement automatically terminates when an
institution changes ownership that results in a change of control. The
Secretary may enter into an agreement with the new owner if the
institution complies with requirements set forth in subpart B of the
Student Assistance General Provisions, 34 CFR part 668.
(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 institutional student information
report for the 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 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 Initial disbursement of a PAS in an award year without a
valid SAR or institutional student information report.
(a) Within an award year, an institution may make one disbursement
of a student's PAS before receiving the student's valid SAR or valid
institutional student information report if the institution--
(1) Receives a student's application information;
(2) Does not have documentation that indicates that the application
information is inaccurate; and
(3) Receives an EFC--
(i) From the Secretary; or
(ii) From an organization that has a contract with the Secretary to
transmit application data to the Secretary.
(b) If an institution receives a student's application information
specified in paragraphs (a)(1) and (a)(3) of this section and the
student's EFC from the Secretary, or the student's EFC produced by the
Secretary from an organization that has a contract to transmit
application data to the Secretary, but the institution has
documentation that indicates that the application information is
inaccurate, the institution may make one disbursement of a student's
PAS within an award year before receiving the student's valid SAR or
valid institutional student information report if the institution--
(1) Resolves the inconsistencies between its documentation and the
student's application information;
(2) Recalculates the student's EFC and Federal Pell Grant based on
correct information;
(3) Makes the disbursement of the student's PAS for the first
payment period based on the recalculated EFC and Federal Pell Grant;
and
(4) Reports the changes in the student's application information
and the recalculated EFC to the Secretary within the deadline
established by the Secretary.
(c)(1) If an institution chooses to make a disbursement under
paragraph (a) or (b) of this section, it shall be liable for that
disbursement if it does not receive a valid SAR or valid institutional
student information report for the student for that award year.
(2) If an institution chooses to make a disbursement under
paragraph (b) of this section, the institution and the student shall be
liable for any overpayment caused by an incorrect recalculation of the
student's EFC.
(3) If a student receives an overpayment as a result of a
disbursement made under paragraph (a) or (b) of this section, the
institution shall eliminate the overpayment by following the procedures
described in 34 CFR 690.77.
(Authority: 20 U.S.C. 1070a-32)
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.
(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 valid institutional student
information report 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 institutional student information report
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; and
(5) Each student's enrollment period.
(b)(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.
(c) The institution shall keep records involved in any claim or
expenditure questioned by Federal audit until resolution of any audit
questions.
(d) An institution may substitute microform copies 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 a 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.
(Authority 20 U.S.C. 1070a-32)
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.
(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.
(Authority: U.S.C. 1070a-36)
[FR Doc. 94-4152 Filed 2-24-94; 8:45 am]
BILLING CODE 4000-01-P
