Chapter	4
Calculating	Annual	Awards	Using	Pell	Grant	Formulas
Fractions	and	Rounding
Use	the	following	rules	on	fractions	and	rounding	along	with	Pell	Formulas	1-5	(discussed	later)	to	properly	calculate	and
award	Pell	Grants.
Fractions
When	using	fractions,	be	careful	to	multiply	first,	and	then	divide	to	avoid	an	incorrect	result.	For	example,	the	correct
way	to	prorate	a	$2,150	Scheduled	Award	for	a	payment	period	that	is	a	nonstandard	term	of	10	weeks	of	instructional
time,	for	a	program	that	has	30	weeks	of	instructional	time	is	to	multiply	the	Scheduled	Award	by	the	number	of	weeks	of
instructional	time	in	the	term,	then	divide	by	the	number	of	weeks	of	instructional	time	in	the	academic	year	or	($2,150	x
10)	÷	30	=	$716.67.
In	this	case,	if	you	were	to	first	divide	the	fraction	consisting	of	the	weeks	in	the	payment	period	over	the	weeks	in	the
academic	year	to	get	a	decimal	(10	÷	30	=	0.333333...)	and	then	round	the	decimal	either	down	(0.33)	or	up	(0.34),
multiplying	that	decimal	by	the	Scheduled	Award	amount	would	result	in	a	number	that9s	too	low	(0.33	x	$2,150	=
$709.50)	or	too	high	(0.34	x	$2,150	=	$731.00).
Rounding
The	Common	Origination	and	Disbursement	System	(COD)	accepts	cents	and	whole	dollar	amounts	in	payment	amounts
for	Pell.	If	your	school	disburses	in	whole	dollar	amounts,	you	may	round	up	if	the	decimal	is	0.50	or	higher,	or	round	down
if	it's	less	than	0.50.	When	rounding	for	a	student	expected	to	be	enrolled	for	more	than	one	payment	period	in	the	award
year,	alternate	rounding	up	and	down,	unless	a	different	Pell	award	amount	is	calculated	for	the	following	term	(for
example,	when	a	student9s	enrollment	intensity	changes).	In	this	case,	the	alternate	rounding	restarts	and	you	may	round
up	for	two	consecutive	terms.	Your	policy	on	rounding	must	be	applied	equally	to	all	students.
As	an	example,	consider	a	student	who	is	enrolled	full	time	in	a	program	offered	in	a	traditional	academic	calendar
consisting	of	fall	and	spring	semesters.	The	student's	full-time	Scheduled	Award	is	$7,005.	Under	Pell	Formula	1	(as
described	later	in	this	chapter),	the	student's	full-time	payment	for	each	of	the	two	terms	(fall	and	spring)	is	$3,502.50.
Using	the	rounding	rule	stated	above,	you	would	round	the	student's	fall	payment	up	to	$3,503,	and	round	the	spring
payment	down	to	$3,502.
Finally,	when	calculating	eligibility	using	Pell	Formula	2	or	3,	you	may	round	the	annual	award	to	the	nearest	whole	dollar
before	determining	the	disbursement	amounts	for	each	term.	See	<
Volume	7,	Chapter	4,	Example	9=	for	a	demonstration
of	this	rounding	rule.
Pell	Formula	1:	Credit-Hour	Programs	Using	Standard	Terms	With	At	Least	30	Weeks	of	Instructional	Time
To	use	Pell	Formula	1,	the	program	must:
Measure	academic	progress	in	credit	hours;
Be	offered	in	semesters,	trimesters,	or	quarters;
Define	full-time	enrollment	for	each	term	in	the	award	year	as	at	least	12	credit	hours;	and
Use	an	academic	calendar	providing	at	least	30	weeks	of	instructional	time	that	meets	either	of	the	following	sets	of
requirements:
Important:	These	rounding	rules	do	not	apply	if	the	amount	disbursed	would	exceed	the	student9s	Pell	Grant
eligibility	for	the	award	year	or	place	the	student9s	Lifetime	Eligibility	Used	over	600%.
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