Federal Pell Grant – Lifetime Eligibility Usage

This year has seen more congressional changes to federal student aid since 1979. One of the biggest would be the imposing of a ceiling cap or Lifetime Eligibility Usage (LEU) on the federal government’s lagest grant program; Pell. I, currently oversee the verification, administration and reconciliation of more than $30 million dollars in Pell per year for an undergraduate population of around 13,000 students.

Significant Annual Changes

Prior to 2008-2009 academic year, no statutory limitation to Pell. The basic requirement is be a first time matriculated (in pursuit of a degree) enrolled undergraduate student. Having also been deemed eligible through the Free Application for Federal Student Aid (FAFSA) for need based aid (based on household income and size).

2008-2009 and thereafter, a statutory limitation of 9 years (or it’s part-time equivalent) was put into place. Again, being a matriculated enrolled undergraduate student you can now only receive eighteen semesters (or it’s part-time equivalent) of Pell. Meeting need based aid requirements, as well. *No prior students were grandfathered into this new regulatory change.

Effective July 1st, 2012 with the passing of The Consolidated Appropriations Act, 2012 (Public Law 112-74) reduced the maximum time frame for which a first time matriculated enrolled undergraduate student is eligible to receive a Federal Pell Grant to 6 years (or it’s part-time equivalent) for the 2012-2013 award year. Meeting need based aid requirements, as well. The six years have been broken down into percentages or no more than 600% with a full semester equated as 50%, three quarter time as 37.5%, half-time as 25% and less than half-time as 12.5%. The major difference here is the lack of a grandfather clause, so every student who ever received PELL, including Education Opportunity Grants (precursor to Pell) and has not yet earned a first bachelors degree will be subject to the new 600%. Those in excess are made ineligible, immediately. Federal Student Aid had to uncover years of archival data to be managed by the Common Origination Database (COD) in order to fully implement the changes Congress had authorized. I, believe that federal student aid needed to see where the fat could be trimmed in order to protect these vital programs for future students. But, with regulations sparking in December and going into affect in July, I feel that it was not enough time for students to make informed decision about what to do about their educational future.

The Pell maximums have not been threaten and have made it unscathed for another academic year, no short in part to the implementation of the Pell LEU. Direct Stafford loan interest rates have also been preserved at 3.4 percent for undergraduate subsidized loans and at 6.8% for unsubsidized. The graduate subsidized loan has been eliminated for at least 2 years, along with all six month grace periods.

I believe in reviewing of programs to see if they can be made more effective. The strengthening of satisfactory academic progress (SAP) is an important key to the overall solution of putting these programs on a more certain fiscally sustainable path for the future.

NEXT POST – Satisfactory Academic Progress (SAP)

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