This past March, the Common Origination and Disbursement (COD) System implemented changes to restore Pell Grant eligibility for students who received a Pell Grant at a now-closed school. With the COD System changes now in place, COD will begin to identify students who received a Pell Grant for attendance at a now-closed school and who were not reported to NSLDS as having “graduated” from that school. Affected students will have their Pell Lifetime Eligibility Used Amount adjusted to remove the portion of the LEU attributable to the students’ attendance at a closed school. The Pell Grant LEU adjustment will be equivalent to the Pell Grant Eligibility Used (EU) at the closed school for each award year for which the student received Pell Grant funds.
When Pell Grant Closed School Restoration adjustments are made, schools will receive information about the adjustments in several ways:
- Email Notification – FSA will send an email alerting schools that a Closed School Pell Restoration list is available on the COD Web Site’s File Share Communications page. The list will show all students who had their Pell Grant LEU adjusted and are associated with the school if, generally –
- The student received any Title IV aid at the school during one or more of the five most recent award years; or
- The school’s Federal School Code was included on the student’s highest ISIR transaction for the most recent of the last three FAFSA processing years for which the student submitted a FAFSA.
- COD Web Site’s Pell LEU History Page Information – Schools will be able to view Pell Grant LEU Closed School Restoration adjustments on the COD Web Site’s Pell LEU History Page. Pell Grant LEU adjustments made due to closed school restoration will be noted as “Closed School Restoration” in the Adjustment Type field.
- Search Functionality – Schools can search for a specific student’s Pell Grant LEU Adjustment under the Escalation Type Search screen on the COD Web Site by entering the student’s SSN and Date of Birth.
- COD Warning Edit 221 (Pell LEU Restoration Due to Closed School) – We will return COD Warning Edit 221 when a student has received a Pell Grant LEU Closed School Restoration Adjustment. This COD Warning Edit 221 will be returned at the Student level <SSN> during origination or maintenance for any award type for a student who meets all of the following criteria:
- Has a Pell LEU Closed School Restoration Adjustment of greater than 0;
- Has an existing Pell Grant award for an active award year on the COD System or a Pell Grant award is being submitted for the student; and
- Is not a graduate student (does not have an existing Direct Loan with a Grade Level of 6 or 7 on the COD System or a Direct Loan with a Grade Level of 6 or 7 is not being submitted for the student)
- NSLDS Postscreening/Institutional Student Information Records (ISIRs) – The COD System will send NSLDS the adjusted LEU for all students who have had a Pell Grant LEU Closed School Restoration. NSLDS postscreening will be triggered if the new Pell Grant LEU meets certain conditions that impact the student’s Pell Grant eligibility (for example, a Pell Grant LEU of more than 500% changes to a Pell Grant LEU of 500% or less). In such instances, an updated ISIR and Student Aid Reports (SAR) will be generated. For more information on postscreening when the Pell Grant LEU changes, refer to the 2017-2018 ISIR Guide.
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Some schools are incorrectly adjusting Pell Grant information due to a Pell Grant overpayment. Incorrect adjustments to Pell Grant information for overpayments may result in a student receiving more Pell Grant funds than he or she is eligible to receive. ED has indicated that this will be one of the items they are looking at in upcoming program reviews at colleges and third party servicers that process disbursement information.
ED put schools on blast last year, telling them to review their procedures to ensure compliance. In addition, ED is telling schools they should review the Pell Grant overpayment cases referred to the Department and verify that the adjustments were correctly reported to the COD System. If corrections are needed, schools must make them as soon as possible. http://bit.ly/2cLj53y
Knowing how to resolve an overpayment of Pell can be confusing. Basically, a school is liable for repaying Pell to the Department if the overpayment occurred because it failed to follow the necessary procedures. If the school is liable it shouldn’t report the overpayment to NSLDS. Instead, it must make the appropriate adjustments to the Pell Grant information on COD within 15 days of becoming aware of the need to adjust the Pell Grant, and then return the funds through G5.
Conversely, a student will be liable if a school was in compliance with all disbursement and reporting requirements when it made the award. In this case, the school should report the overpayment to NSLDS so they can pursue collection. They instruct schools to make the appropriate adjustments to the Pell Grant information reported to COD, and return the funds through G5. However, the amount of the adjustment to the Pell Grant information depends on what portion of the overpayment is collected by the school and what portion of the overpayment is being referred to the Department for collection. Confused yet?
ED provided a table summarizing Pell Grant overpayment reporting requirements to NSLDS, the COD System, and G5 to help school administrators understand the processes for handling and reporting Pell Grant overpayments.
Program Reviews are coming!
2017-2018 Award Year Pell Grant Increased
Celebrity Fed, Jeff Baker announced that the maximum Pell Grant for the 2017-2018 award year will be $5,920.00, an increase of $105.00 from the 2016-2017 maximum Pell Grant award amount. According to the oddly short announcement posted on the IFAP website on September 30, 2016, FSA plans to publish the Pell Grant Payment and Disbursement Schedules by the middle of October and implement system, web and software modifications that will reflect the 2017-2018 awards thereafter.
The Federal Pell Grant regulations provide for an Administrative Cost Allowance (ACA) payment of $5 to schools for each student who receives a Pell Grant at that school for an award year. These funds may only be used to defray the costs of administering the Pell Grant, SEOG, Work-Study, or Perkins Loan programs. ACA payments are made directly to the school’s Federal bank account.
The second Pell Grant ACA payments for the 2015-2016 Award Year began on August 24, 2016. http://bit.ly/2brPG3K
The third and final ACA payments for the 2014-2015 Award Year also began August 24, 2016. http://bit.ly/2cjXswB
Schools have likely already received these payments and those which have not, will see these payments deposited directly into their bank accounts during the next few weeks. Please be sure to check your Federal bank account on a regular basis to confirm these deposits, and to then transfer the funds into your general bank account.