Pell Grant Eligibility Changes
- Students with an SAI equal to or greater than 14,790 (twice the maximum Pell Grant) are ineligible to receive a Pell Grant.
- Students who receive grants or scholarships from non-federal sources (institutional, state, or private) that cover their entire cost of attendance (COA) are ineligible to receive a Pell Grant, even if otherwise eligible for the program. Non-federal aid can be reduced to below the COA to preserve Pell Grant eligibility.
- Foreign income is now included in the adjusted gross income (AGI) used to calculate Pell Grant eligibility on the FAFSA, making this an automated process.
Federal Direct Loan Changes
- Requires institutions to prorate annual loan amounts in direct proportion to the percent of full-time status the student is enrolled.
- The steps to apply the schedule of reductions are as follows:
- Step 1: Determine the student's basic eligibility for a Direct Loan in terms of general student eligibility criteria, grade level, enrollment status, intent to enroll, applicable annual loan limit, etc.
- Step 2: Apply the formula: (number of credits enrolled for academic year/number of credit hours considered full time for the academic year) x 100 = annual loan limit percentage.
- Step 3: Calculate the amount of the academic year loan limit that the term represents. For example, in a two-semester academic year, a single term represents half of the annual loan limit.
- Step 4: Apply the formula by term: (number of credit hours enrolled for the term/number of credit hours considered FT for that term) x 100 = annual loan limit percentage.
- Step 5: Apply the Step 4 percentage to the Step 3 result to calculate the loan amount for each term/payment period within the full academic year loan period. Note that this is not a single-term loan period calculation.
Loan Proration Examples
- Step 1: Annual loan limit (maximum eligibility) = $3,500 sub; $2,000 unsub
- Step 2: (24/24) x 100 = 100% for the year
- Step 3: 2 terms = 50% academic year loan limit per term
- Step 4: (15/12) x 100 = 125% Fall
- (9/12) x 100 = 75% Spring
- Full annual loan limit = $5,500 ($3,500 sub and $2,000 unsub)
- Maximum 50% of annual loan limit per term
- Cannot award more than 50% of the full annual loan limit in the first term. Additional 25% is added to the spring term.
- Step 5: $1,750 x 100 = $1,750 Sub Fall
- $1,000 x 100 = $1,000 Unsub Fall
- $1,750 x 100 = $1,750 Sub Spring
- $1,000 x 100 = $1,000 Unsub Spring
The spring amount is not reduced because full time is considered 24 credits over two terms. The student is less than full time in the spring term, but the previously completed “extra” credits in the fall brings the student up to full time for the spring.
- Step 1: Annual loan limit (maximum eligibility) = $3,500 sub; $2,000 unsub
- Step 2: (24/24) x 100 = 100% for the year
- Step 3: 2 terms = 50% academic year loan limit per term
- Step 4: (9/12) x 100 = 75% Fall
- (15/12) x 100 = 125% Spring
- Full annual loan limit = $5,500 ($3,500 sub and $2,000 unsub)
- Maximum 50% of annual loan limit per term
- Step 5: $1,750 x 75% = $1,313 Fall Sub
- $1,000 x 75% = $750 Fall Unsub
- $1,750 x 125% = $2,187 Spring Sub
- $1,000 x 125% = $1,250 Spring Unsub
This is Scenario 1 reversed (flipped enrollment). Based on the student's enrollment, the fall disbursement is reduced, and the spring disbursement is increased. The school must package and evaluate for less-than-full-time enrollment at the time of disbursement. The student is not enrolled full-time for the fall term, and therefore, the schedule of reductions must be applied. When the student is evaluated at the time of the spring disbursement, the student has enrolled in enough credits to be considered full time for the year, and therefore, receives the full remaining eligibility for the annual loan limit, making the disbursements not substantially equal.
Students cannot receive more than 50 percent of their annual loan limit in the first term of the academic year. Because the student’s enrollment is at 125 percent for the second term in this scenario, the student can receive more than 50 percent of their annual loan eligibility in that term. The extra 25 percent is not applied retroactively to the fall disbursement. This is different from Scenario 1 where the student was enrolled at 125 percent for the first term. In that scenario, the student was required to wait until the second term disbursement to receive funds for the additional enrollment.
- Step 1: Annual loan limit (maximum eligibility) = $3,500 sub; $2,000 unsub
- Step 2: (24/24) x 100 = 100% for the year
- Step 3: 2 terms = 50% academic year loan limit per term
- Step 4: (9/12) x 100 = 75% Fall
- (15/12) x 100 = 125% Spring
- Full annual loan limit = $5,500 ($3,500 sub and $2,000 unsub)
- Maximum 50% annual loan limit per term
- Step 5: $1,750 x 75% = $1,313 Fall Sub
- $1,000 x 75% = $750 Fall Unsub
- $1,750 x 125% = $2,187 Spring Sub
- $1,000 x 125% = $1,250 Spring Unsub
The student cannot receive the full annual loan limit in one term.
- Step 1: Annual loan limit (maximum eligibility) = $3,500 sub; $2,000 unsub
- Step 2: (12/24) x 100 = 50% for the year
- Step 3: 2 terms = 50% academic year loan limit per term
- Step 4: (9/12) x 100 = 75% Fall
- (3/12) x 100 = 25% Spring (less than half time)
- Full annual loan limit = $5,500 ($3,500 sub and $2,000 unsub)
- Maximum 50% annual loan limit per term
- Step 5: $1,750 x 75% = $1,313 Fall Sub
- $1,000 x 75% = $750 Fall Unsub
- $0 Spring Sub
- $0 Spring Unsub
This student can receive 75 percent of half the annual loan limit for the fall term. The student is enrolled less than half time for the spring semester and is therefore ineligible for a spring disbursement. All eligibility criteria must be assessed before applying the schedule of reductions. In this case, the student does not meet eligibility criteria for a loan disbursement in the spring because they are enrolled less than half time.
- Step 1: Annual loan limit (maximum eligibility) = $3,500 sub; $2,000 unsub
- Step 2: (24/24) x 100 = 100% for the year
- Step 3: 2 terms = 50% academic year loan limit per term
- Step 4: (12/12) x 100 = 100% Fall
- Step 5: $1,750 x 100% = $1,750 Fall Sub
- $1,000 x 100% = $1,000 Fall Unsub
Calculations must restart at spring disbursement to account for the dropped fall credits and apply the reduction to the spring term.
- Step 1: Annual loan limit (maximum eligibility) = $3,500 sub; $2,000 unsub
- Step 2: (18/24) x 100 = 75% for the year
- Step 3: 2 terms = 50% academic year loan limit per term
- Step 4: (6/12) x 100 = 50% Fall
- (12/12) x 100 = 100% Spring
- Full annual loan limit = $5,500 ($3,500 sub and $2,000 unsub)
- Maximum 50% annual loan limit per term
- Step 5: $1,750 x 50% = $875 Fall Sub
- $1,000 x 50% = $500 Fall Unsub
- The student already received $1,750 in sub and $1,000 in unsub.
- $875 - $1,750 = - $ 875 (must be deducted from spring sub)
- $500 - $1,000 = - $500 (must be deducted from spring unsub)
- $1,750 x 100% = $1,750 - $875 = $875 Spring Sub
- $1,000 x 100% = $1,000 - $500 = $500 Spring Unsub
This student dropped to 50% for the fall term after disbursement and was therefore overawarded for the fall. They enrolled full time for the spring, but the overaward from the fall must be deducted from the spring to account for a less-than-full-time enrollment for the academic year. The spring disbursement is therefore reduced to 50% of the maximum award for that term.