You’re welcome. I’ve been doing FinAid software for 15+ years, and I’ve yet to see a student get a check from Pell.
Now, if a student drops early, then things can get tricky. The school must refund the unused Pell back to the Feds using a complex formula. Basically, the school has to create a transaction batch that debits the students’ account ledgers (reduces net tuition owned) by the refund formula called ‘R2T4’. There are interactions between Pell, Direct Lending (DL) loads, FFEL loans, VA vouchers and other sources, and student cash payments, and it all can get pretty hairy to figure out who gets what piece of the refund pie. Google for “R2T4” (Return To Title VI) for the regulations. It gives me a migraine just thinking about it...
Anyway, R2T4 is the entirely school’s problem, not the student. All the student gets refunded is whatever excess cash they paid in, and loans work themselves out separately. Any loan disbursements they spent on housing or whatever gets added to whatever principle amount is owned on the loan, and they pay it back per the loan schedule and rules for handling a drop (which can vary).
I knew it was something like that, but of course not the details the way you explain it, so glad someone understands the inner workings. It’s too blanket to say students can misuse that money without consequences....I knew that wasn’t true.