1. (a) Allocation Methodology. Except as provided in §22.235 of this subchapter (relating to Allocation of Funds- TEOG Pathway), an institution's share of available funds for the Program shall be determined in three stages. An institution's general allocation will be the sum of the output of each of the stages.

   1. (1) Renewal Grants. Each eligible institution's renewal grants component of the allocation is calculated by multiplying:

      1. (A) The sum of:

         1. (i) The number of Initial Year Grant recipients at the institution in the Prior-Prior Year (i.e., two fiscal years before the year for which the allocation is being made), multiplied by the percentage of Initial Year Grant recipients at the institution in the year prior to Prior-Prior Year who received a Renewal Grant in the Prior-Prior Year; and
         2. (ii) The number of Renewal Grant recipients at the institution in the Prior-Prior Year, multiplied by the percentage of Renewal Grant recipients at the institution in the year prior to Prior-Prior Year who received a Renewal Grant in the Prior-Prior Year; and

      2. (B) The lesser of:

         1. (i) The institution's average TEXAS Grant amount in the Prior-Prior Year; or
         2. (ii) The Target Grant Amount for the fiscal year for which allocations are occurring.

   2. (2) Initial Grants- Top 25 percent. Each eligible institution's initial grants component of the allocation for students graduating in the Top 25 percent of their class is calculated by multiplying:

      1. (A) The number of students who were reported in the Prior-Prior Year as:

         1. (i) enrolled as entering undergraduate students;
         2. (ii) Residents of Texas, as defined in §22.1 of this chapter (relating to Definitions);
         3. (iii) enrolled at least three-quarter-time;
         4. (iv) having graduated in the top 25 percent of the student's high school graduating class in one of the two school years preceding the Prior-Prior Year; and
         5. (v) having a Student Aid Index at or below the Priority Student Aid Index Level, as defined in §22.226 of this subchapter (relating to Definitions); and
      2. (B) One hundred twenty-five percent (125%) of the Target Grant Amount for the fiscal year for which allocations are occurring.

   3. (3) Remaining Initial Grants. Available funds remaining after calculating the first two components of each institution's allocation shall be distributed proportionally. An institution's proportion of the remaining allocation is based on the sum of the number of students who were reported in the Prior-Prior Year as:

      1. (A) enrolled as undergraduate students who had not yet received a baccalaureate degree;
      2. (B) residents of Texas, as defined in §22.1 of this chapter;
      3. (C) enrolled at least three-quarter time;
      4. (D) having a Student Aid Index at or below the Priority Student Aid Index Level, as defined in §22.226 of this subchapter (relating to Definitions); and

      5. (E) either:

         1. (i) a first-time enrolling freshman, excluding students described by subsection (a)(2)(A) of this section; or
         2. (ii) an undergraduate transfer student who completed an associate degree within the prior twelve months to enrolling, excluding students described by §22.235(a)(1) of this subchapter (relating to Allocation of Funds- TEOG Pathway).
2. (b) If appropriated funds for the Program are insufficient to allocate the full amounts calculated in subsections (a)(1) or (a)(2) of this section, available funds for that portion of the calculation will be distributed proportionally, with each institution's share of the allocation being the amount calculated for that component of the allocation calculation divided by the sum of all participating institutions' calculated amount for that component of the allocation calculation.
3. (c) Two-Year Allocation. Beginning with Fiscal Year 2028, allocations for both years of the state appropriations' biennium will be completed at the same time. The three most recent certified Financial Aid Database submissions will be utilized to forecast the data used in the calculation of the allocation for the second year of the biennium. Institutions will receive notification of their allocations for both years of the biennium at the same time.
4. (d) Data Sources. For the purposes of subsection (a) of this section, the Coordinating Board shall use each institution's certified Financial Aid Database submissions for the applicable year(s) as the data source for its calculations, except that the Coordinating Board shall use the institution's CBM00B university admissions report submissions to identify the students meeting the criterion described in subsection (a)(2)(A)(iv) of this section.
5. (e) Notice and Data Review. The Coordinating Board will conduct a preliminary data review, the results of which will be shared with all participating institutions for comment and verification prior to the publication of final allocations. Institutions will be given ten working days, beginning the day of the data review notice's distribution and excluding State holidays, to confirm that the data review report accurately reflects the data they submitted or to advise the Coordinating Board of any inaccuracies.

6. (f) Reductions in Funding.

   1. (1) If annual funding for the program is reduced after the start of a fiscal year, the Coordinating Board may take steps to help distribute the impact of reduced funding across all participating institutions by an across-the-board percentage decrease in all institutions' allocations.
   2. (2) If annual funding is reduced prior to the start of a fiscal year, the Coordinating Board may recalculate the allocations according to the allocation methodology outlined in this rule for the affected fiscal year based on available dollars.

Source Note:The provisions of this §22.236 adopted to be effective November 28, 2005, 30 TexReg 7870; amended to be effective May 21, 2008, 33 TexReg 3952; amended to be effective February 26, 2013, 38 TexReg 1161; amended to be effective February 26, 2014, 39 TexReg 1143; amended to be effective November 26, 2014, 39 TexReg 9204; amended to be effective June 6, 2016, 41 TexReg 4006; amended to be effective August 27, 2018, 43 TexReg 5510; amended to be effective May 15, 2025, 50 TexReg 2790; amended to be effective May 13, 2026, 51 TexReg 3108.