The	Special	Rule	in	Section	401(c)	of	the	HEA	allows	certain	students	whose	parents	or	guardians	died	while	serving	on
active	duty	in	the	U.S.	Armed	Forces	or	while	serving	as	public	safety	officers	to	receive	the	maximum	Pell	Grant	award,
regardless	of	their	calculated	SAI.	However,	all	other	Title	IV	aid	for	these	students	must	be	based	on	their	calculated	SAI.
See	Volume	7,	Chapter	1	for	the	specific	eligibility	requirements	that	must	be	met	for	a	student	to	receive	the	maximum
Pell	Grant	amount	under	the	Special	Rule,	and	guidance	on	identifying	eligible	students.
Substituting	for	the	SAI
A	school	may	substitute	certain	types	of	aid	for	the	student9s	SAI.	Forms	of	aid	that	may	replace	the	student9s	SAI	include
Direct	Unsubsidized	Loans,	TEACH	Grants,	Direct	PLUS	Loans,	state	loans,	private	education	loans,	or	any	other	non-need-
based	loans.	Note	that	annual	loan	limits	for	Direct	Unsubsidized	Loans	still	apply,	and	the	total	aid	received	(including
amounts	used	to	replace	the	SAI)	cannot	exceed	the	COA.
Volume	3,	Chapter	3,	Example	3:	Pell	Grant	Special	Rule	Packaging
A	full-time	independent	third-year	undergraduate	student	meets	the	eligibility	criteria	under	the	Special	Rule	(as
described	in	Volume	7,	Chapter	1)	to	receive	the	maximum	Pell	Grant	award.	The	student	has	a	COA	of	$15,000
and	an	SAI	of	9,000	for	the	award	year.	The	packaging	process	begins	with	the	maximum	Pell	Grant	award	of
$7,500*.	Although	the	Pell	Grant	amount	exceeds	the	student9s	financial	need	of	$6,000	(as	determined	by
subtracting	the	SAI	of	9,000	from	the	$15,000	COA),	no	overaward	is	created	because	the	student	qualifies	for	the
maximum	Pell	Grant	award	under	the	Special	Rule.
The	student	has	no	eligibility	for	additional	need-based	aid,	but	the	school	awards	a	Direct	Unsubsidized	Loan	in
the	amount	of	$7,500	to	fully	cover	the	student9s	COA:
$15,000	COA
-7,500	Pell	Grant
-7,500	Direct	Unsubsidized	Loan
$0	remaining	costs
*The	$7,500	maximum	Pell	Grant	award	is	a	fictitious	amount	used	for	illustrative	purposes	only.	It	is	not	intended
to	represent	the	actual	maximum	Pell	Grant	award	for	any	particular	award	year.
Regulatory	Citations
34	CFR	685.200(e)
34	CFR	686.21(d)
Note:	Although	the	cited	regulations	refer	to	the	expected	family	contribution,	these	provisions	continue	to	apply
for	purposes	of	substituting	certain	types	of	aid	for	the	SAI.
Volume	3,	Chapter	3,	Example	4:	Replacing	the	SAI	With	Unsubsidized	Loan	Funds:	Dependent	Student
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