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For Training/Discussion Purposes Only

April 2014

Byron Scott

U.S. Department of Education 1

2014 Spring Conference

April 9, 2014

Calculating and

Disbursing Title IV

Aid for Clock-hour

Schools

Agenda

• Basic definitions

• Payment periods

• Federal Pell Grants

• Federal Direct Loan

• Disbursements

• Satisfactory Academic Progress

2

Academic Year

• Must be defined by school using statutory

guidelines for each academic program

− Must use that definition for all students in the same

program

− Must use that definition for all Title IV purposes

• Program length may be longer or shorter than the

definition of an academic year

• Does not always correspond to a school’s

scheduled academic calendar

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April 2014

Byron Scott


Academic Year

• Academic year is used to:

− Determine payment periods

− Calculate Direct Stafford Loan eligibility

• Sometimes confused with:

− Grade level classification, often set by Registrar

− Award year

4

Clock-hour Academic Year

• Statutory minimum definition for programs that

measure progress in clock hours

− 900 clock hours

− 26 weeks of instructional time

− A week is a 7-day period in which there is at least one day

of instruction or exams

− Need not correspond to a calendar week

5

Academic Year Examples

• 990 clock-hour, 42-week program

− Some academic year options

• 900 clock hours, 26 weeks



• 1,800 clock-hour, 48-week program

− Some academic year options



• 1,200 clock hours, 32 weeks

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April 2014

Byron Scott


Clock-Hour Enrollment Status

• Minimum full-time standard for undergraduate

clock-hour programs is 24 clock hours per week

− A student attending 24 hours per week will complete

900 hours in 37.5 weeks

− If attending 30 hours per week, will complete 900 hours

in 30 weeks

− If attending 35 hours per week, will complete 900 hours

in 26 weeks

• Half-time is half of full-time (minimum 12 hours)

• Must be defined by the school for each eligible

program

7

TERM

Clock Hours and Terms

• How does this work with your term

structures?

− Rule 1—Ignore the fact that you have

terms!!

− Rule 2—Terms do not apply!!

− Rule 3—Regardless of terms, track

progression to the next payment period

using clock hours and weeks of instruction,

not terms!

8

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Payment Periods


April 2014

Byron Scott


Payment Period

• The academic year is divided into payment periods

• Payment periods used for:

− Pell Grant calculations and disbursements

− Direct Loan disbursements

• Calculation of payment periods varies based on the

published length of the program

• A change in award years does not change the

defined payment periods

10

Payment Period

• For clock-hour programs, the payment period is

defined not only in clock hours but also in weeks of

instructional time

− Must know weeks of instructional time in program in

order to properly calculate Pell Grant awards

• A student must successfully complete the clock

hours AND weeks of instructional time in a

payment period to progress to the next payment

period

11

Programs of One Academic Year or Less

• The program is divided into two equal payment

periods

− CANNOT have more than two payment periods in an

academic year

− 1st payment period is the period of time when the student

completes half the number of clock hours and half the

weeks of instructional time in the program

− 2nd payment period is the period of time in which the

student successfully completes the remainder of the

program

− Applies to any program of 900 hours* or less

* Unless academic year is defined as longer than 900 hours

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April 2014

Byron Scott


Payment Period Example

• Culinary Program, 700 clock hours, 32 weeks

− Academic year is 900 hours and 26 weeks

• Program is divided into two equal payment periods

− Payment period 1 - clock hours 1-350 and 18 weeks

elapse

− 2nd payment period is remainder of clock hours and weeks

in program

13


• Programs of one academic year in length

• Medical Assistant program is 900 clock hours with

38 weeks of instructional time

− Academic year is 900 clock hours and 38 weeks

• 1st payment period = Clock hours 1-450 and 19 weeks elapse

• 2nd payment period = Remainder of program – clock hours

451-900 and remaining 19 weeks

14

Program Greater Than One Academic Year

• For the first academic year and any full academic

year after that:

− First payment period is the period of time when the student

completes half the number of clock hours and half the

weeks of instructional time in the academic year

− Second payment period is the period of time in which the

student successfully completes the remainder of the

academic year

• Example – 1,800 clock hour program over 64

weeks with academic year of 900 clock hours and

32 weeks - Program has 4 equal payment periods

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April 2014

Byron Scott



• If the remainder of a program than is more than

half an academic year but less than a full academic

year in length

− 3rd payment period is half the clock hours and half the

weeks of instructional time remaining in the program

− 4th payment period is the time necessary to complete the

remainder of the program

16


• If the remainder of a program than is less than half

an academic year in either weeks or clock hours

− 3rd payment period is the remainder of the academic

program

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Cosmetology Program

• 1,800 clock hours and 48 weeks

• Academic year is 1,200 clock hours and 32 weeks

Year 1:

600 hours/16 weeks and 600 hours/16 weeks

Year 2:

600 hours/16 weeks


April 2014

Byron Scott



19

Practical Nursing Program

• 1,340 clock hours and 72 weeks

• Academic year is 900 clock hours and 26 weeks

Year 1:

450 hours/13 weeks and 450 hours/13 weeks

Year 2:

440 hours/46 weeks

Crossover Payment Periods

• Longstanding definition and policy

− Payment period that includes 6/30 and 7/1

− Established payment periods are determined by number of

clock hours and weeks of instructional time

− Must be assigned to and paid from one award year

• Any aid drawn down for crossover period may pay all costs

associated with the period (even if paying from next award

year)

• May use different award year for Pell than for other Title IV aid

− Must have valid SAR/ISIR for assigned year

20

Payment Period Disbursements

• At least one disbursement must be made in each

payment period

• The full amount due the student for a payment period should

be disbursed to the student before the end of the payment

period

• Disbursements must be made to best meet the

needs of the student

− Institution may not have a practice of delaying disbursement

beyond the 60% point in time to avoid R2T4 calculation

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April 2014

Byron Scott


Re-Entry Students

• A student who ceases attendance and returns

within 180 days is considered to remain in the

same payment period

• A student who ceases attendance and returns after

180 days or begins a different program at the same

school within any time period starts a new payment

period

− All periods of a student’s attendance in a program are

subject to SAP maximum time frame

• Clock-hour students cannot usually be paid for

repeating a failed class

22

Re-entry Students and Maximum Time

• All periods of student’s enrollment count when

assessing progress, even if students don’t receive

Title IV funds

• Example – Student attends 25 weeks of a 40-week

program and withdraws. Student returns 1 year

later and is required to repeat the entire program

− Maximum time frame is 150%, or 60 weeks

− Student has attended 25 weeks, so only 35 weeks remain

toward maximum time frame

− Student is ineligible because he cannot mathematically

complete within maximum time

23

24

Federal Pell Grant Calculations

and Requirements


April 2014

Byron Scott


Five Calculation Steps

1. Determine enrollment status

2. Calculate Pell COA

3. Determine annual award

4. Determine payment periods

5. Calculate payment for each payment period

25

Pell Grant COA

• Is student at least half-time?

• If program is not equal to an academic year,

prorate COA up or down to reflect one full

academic year

− Pell COA always based on cost for full-time student for a

full academic year

26

Step 2 - Pell Grant COA Proration

27

Multiply program COA by the lesser of two

fractions to determine Pell COA

OR

Clock/credit hours in program’s defined academic year

Clock/credit hours to which the costs apply

Weeks of instructional time in program’s defined academic year

Weeks of instructional time in enrollment period to which costs apply


April 2014

Byron Scott


Annual/Scheduled Pell Award

• The maximum amount a student would receive

during a full academic year for a given enrollment

status, EFC and COA

• The annual award for a student in a clock-hour

program is always taken from the full-time payment

schedule, even if the student is attending less than

full-time

− Thus the annual award will always equal the scheduled

award

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Pell Calculation for Payment Period

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Formula 4

Scheduled Award times THE LESSER OF:

Number of clock hours in the payment period

Number of clock hours in program’s academic year

or

Number of weeks of instructional time in the payment period

Number of weeks of instructional time in program’s academic year

Pell Calculation Example 1

• Program less than one academic year

− 650 clock hour, 18 week program

− Academic year defined as 900 clock hours, 26 weeks

− Payment periods defined as 325 clock hours and 9 weeks

− Take lesser of 325/900 = .361 or 9/26 = .346 times the

annual award

• $5,000 X 9/26 = $1,730.77

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April 2014

Byron Scott



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$4,000 X 600 or 16 = $2,000

First Academic Year

1,800 clock hour program over 48 weeks

Academic year definition – 1,200 clock

hours and 32 weeks

1,200 32

Pell award for each payment period


32

$4,000 X 16 or 600 =

Second Academic Year

$2,000 32 1,200

Pell Calculations for Transfer Students

• Determine length of program at your institution

• Determine percentage of Pell received at previous

school during award year

− Subtract result from 100%

• End result remaining Pell eligibility

• Remember – use percentages, not dollars

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April 2014

Byron Scott


Federal Direct Loan

Information

34

Determining Loan Periods

• Loan period may be the same as the period of

enrollment for programs one academic year in

length or less

− Loan periods may cross award years

• Loans must be disbursed equally by payment

period

− The loan period determines the payment periods

35

Determining Loan Periods

• Maximum loan period

− Generally school’s academic year.

− Can be the length of program if program longer than an

academic year (for example, program is 900 hours over 40

weeks and academic year is defined 26 weeks)

• Minimum loan period – the lesser of:

− The academic year, the student’s program, OR

− The remaining portion of the program, OR

− The remaining portion of an academic year

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April 2014

Byron Scott


Monitoring Annual Loan Limits

• Borrower-based Academic Year (BBAY3)

− Must be used for clock-hour and nonterm programs and

− Moves with student’s attendance and progression in

program

− Student becomes eligible for new annual loan limit after

successful completion of clock hours AND weeks in

academic year

37

Prorating Annual Loan Limits

• Student enrolled in program less than an academic

year in length

• Student enrolled in program that is longer than an

academic year and is in a final period of study that

is less than an academic year

38

Prorating Annual Loan Limits

Final period less than an academic year

Use:

Hours enrolled Hours in academic year

Program less than an academic year

Use lesser of:

Weeks enrolled Weeks in academic

year

or

Hours enrolled Hours in academic year

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April 2014

Byron Scott


BBAY – Clock-Hour Program

40

1,200 Clock-Hour/32 Week Program

900 Clock-Hour/26 Week Academic Year

450 hrs/13 wks 450 hrs/13 wks

1st BBAY

$3,500 annual loan limit

*You must prorate annual loan limit for final

period less than an academic year

$4,500 x 300 / 900 = $1,500 Sub

$2,000 x 300 / 900 = $667 Unsub

300 hrs/6 wks

2nd BBAY

$4,500 annual

loan limit*

Frequency of Annual Loan Limits Example

• Program is 1,800 clock hour overs 72 weeks

• Academic year is defined as 900 clock hours and

36 weeks

• Student completes 900 hours in 30 weeks

• Student not eligible for new annual loan limit until

36 weeks have elapsed

− Student will have completed 1,100 hours at that point

• Second loan prorated

− 700/900 X $4,500 = $3,500

41

Transfers Between Schools

• Upon transfer to second school

− New school certifies loan for remaining balance of annual

loan period for period that covers remaining portion of loan

period at first school

• After remaining balance completed, student

progresses to new loan period and annual loan

limit

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April 2014

Byron Scott


43

Disbursements

Title IV Disbursements

• An institution makes a disbursement of Title IV

program funds on the date that the institution

credits a student’s account at the school or pays

the student directly with –

− Funds received from the Department

− Institutional funds used in advance of receiving funds from

the Department

• Schools must disclose the methods and frequency

of disbursements of Title IV aid

44

Disbursement Reporting to COD

• Report the actual disbursement date and amount

− Report as early as 7 days before actual (true) date of

disbursement

− Report no later than 15 days of crediting the student’s

account

• Disbursement date reported to COD must be the

actual date of disbursement to the student account

− Direct Loans – interest begins to accrue on the actual

disbursement date reported by the school

− See Electronic Announcement January 29, 2014

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April 2014

Byron Scott


Disbursing by Payment Period

• Student must successfully complete the required

clock hours and weeks in a payment period before

receiving disbursements for a subsequent payment

period

• Excused absences may be included when

determining clock hours completed under certain

circumstances

46

Excused Absences

• Absences must be ones that the student does not

have to make up

• School must have written policy that permits

excused absences

• Number of excused absences may not exceed the

lesser of:

− Allowed excused absences per accrediting agency or state

authorizing agency

− 10% of the clock hours in the payment period

47

48

Satisfactory Academic Progress


April 2014

Byron Scott


Maximum Time Frame

• For undergraduate programs, must be no longer

than 150% of published length of educational

program

− For clock-hour programs, as measured in cumulative

clock hours required to complete and expressed in

calendar time

− A clock-hour program cannot establish the maximum

time in credits attempted

49

Maximum Time Example

• Program is 1,200 clock hours

• Students attend 30 hours per week

• Program scheduled to last 40 weeks

• 40 X 150% = 60 weeks maximum time frame

− A student must complete 20 hours per week in order to

complete 1,200 hours in 60 weeks

50

SAP Evaluation Points

• Schools may monitor progress by selecting 1 of 3

options for all students in a program

1. At the point where the student’s scheduled clock hours

for the payment period have elapsed, regardless of

whether the student attended them

2. At the point when the student has attended the

scheduled clock hours

3. At the point when the student successfully completes

the scheduled clock hours for that payment period

51


April 2014

Byron Scott


Option 1 Pace Evaluation

• School reviews SAP based on attended hours

• Students scheduled to attend 30 hours per week

• At 450 scheduled hours the student has

successfully completed 300 hours

• Both hours and weeks must be checked

− Hours calculation – 300/450 = 67%

− Weeks calculation – 10/15 = 67%

52


• School reviews SAP based on attended hours


• The student attended 450 hours at the time 600

hours were scheduled




53


• School reviews SAP based on successfully

completed hours


• The student successfully completed 450 hours at

the time 600 hours were scheduled




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April 2014

Byron Scott


55

Training Evaluation

To ensure quality training, we ask all participants to complete an online evaluation for each session

• Go to https://s.zoomerang.com/s/ByronScott

− Evaluation form is specific to Byron Scott

• Feedback is a tool to help us improve our training and to listen to our customers

Please provide any comments regarding this training or the trainer to:

Jo Ann Borel, Title IV Training Supervisor

[email protected]

409-579-3776

56

Contact Information

57

Your Chicago regional trainers

Byron Scott, Training Officer

[email protected]

312-730-1534

Angela Smith, Training Officer

[email protected]

312-730-1552

https://s.zoomerang.com/s/ByronScott

mailto:[email protected]



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