; (B) has not completed an undergraduate baccalaureate course of study; and (C) is enrolled as an undergraduate student in an eligible program (as defined in section 481(b)) on at least a half-time basis. (3) Governor The term Governor means the chief executive of an outlying area. (4) Outlying area The term outlying area means the Northern Mariana Islands, American Samoa, the United States Virgin Islands, Guam, and the Freely Associated States. . III Federal Pell Grant improvements 301. Federal Pell Grant improvements (a) Amendments to current pell grant program Section 401 of the Higher Education Act of 1965 ( 20 U.S.C. 1070a ) is amended— (1) in subsection (c)(5)— (A) by striking shall not exceed 12 semesters, or the equivalent of 12 semesters, as determined by the Secretary by regulation and inserting shall not exceed 7 years and 6 months ; and (B) by striking only that same fraction of such semester or equivalent and inserting only that same fraction of such year ; (2) in subsection (e), by striking Any disbursement allowed to be made by crediting the student’s account shall be limited to tuition and fees and, in the case of institutionally owned housing, room, and board. The student may elect to have the institution provide other such goods and services by crediting the student’s account. and inserting Payments under this section may be used by the student for living and nontuition expenses.