Declining and Returning Pell under the Consolidated Appropriations Act, 2012

admin ., Federal Student Aid Programs

All financial aid professionals that administer Pell can collectively agree, the rules laid out by the Department of Education change at a mind-boggling pace.  Every time that schools start to feel confident about how Pell is calculated, to whom, and for how long, something changes.  Year round Pell was eliminated before it was truly started.  Funding has increased, decreased, increased again, and with the election before us, we can only wonder how it will be affected again.

As administrators of Pell, we know this grant serves the population with the greatest need—one that otherwise may not be able to attend our institutions without it.  With each change, we try and revise our packaging procedures and inform our student body accordingly to serve them the best we know how.  With all of the changes made to Pell with the Consolidated Appropriations Act, 2012, I believe we can all appreciate the updates made by the Dear Colleague Letter published September 4, 2012.

The most significant change made by the Consolidated Appropriations Act, 2012, was the limit of only 12 semesters that students may receive Pell over their lifetime.  However, the Dear Colleague Letter provides additional guidance as to how students can take control over what terms they receive Pell so that they can better utilize these funds.  It mimics how veterans can choose when institutions may bill Veterans Affairs for their benefits.  For example, many students at community colleges with plans to transfer to institutions with higher tuition rates will choose to not use their benefits while enrolled at the less expensive institution.  Likewise, Pell Grant eligible students may submit to their institution a signed written statement confirming that they do not want to receive Pell funds.  If a student has already received Pell funds, but have decided that they do not want to utilize their entitlement that term, they must bring the funds back to the institution, along with their signed written statement of decline, and the institution will return the funds on their behalf.

However, with this student flexibility comes enormous accountability.  Students must initiate the decline or return if they do not wish to receive funds.  Otherwise, the disbursement will count against their maximum eligible semesters.  In addition, financial aid administrators must keep the signed written statements for confirmation and auditing purposes.  Institutions will also be required to make any adjustments necessary on the student’s record within COD.

Though this guidance may increase the burden on administrators, it is an excellent move in allowing students the opportunity to make intentional financial decisions towards funding their education in light of the decrease to Pell Grant eligibility, which, as financial administrators, should be one of our primary goals.

For further details and guidance, please see Dear Colleague Letter DCL ID: 1218.

Written by: Brittany Barker, HEAG consultant,