; and (B) completes a Free Application for Federal Student Aid or demonstrates eligibility for a Federal Pell Grant through institutional financial aid eligibility forms. (4) Headcount The term headcount means the unduplicated number of students enrolled over a 12-month period, which shall be defined and calculated in the manner determined most appropriate by the Secretary. (5) Net State operating support The term net State operating support means an amount that is equal to the amount of State funds and local government appropriations used to support public higher education annual operating expenses and financial aid programs in the State, calculated in accordance with subparagraphs (A) and (B). (A) Calculation A State’s net State operating support shall, for a fiscal year, be an amount that is equal to the difference resulting from the gross amount of State funds appropriated and disbursed by the State and expended by the recipient institutions in the fiscal year for public higher education operating expenses in the State, minus— (i) such appropriations that are returned to the State; (ii) State-appropriated funds derived from Federal sources, including funds provided under this part; (iii) local government funds not appropriated for operating support for public higher education; (iv) amounts that are portions of multi-year appropriations to be distributed over multiple years that are not to be spent for the year for which the calculation is being made; (v) tuition charges remitted to the State to offset State appropriations; (vi) State funding for students in non-credit continuing or adult education courses and non-credit extension courses; (vii) sums appropriated to private nonprofit institutions of higher education, or to proprietary institutions of higher education, for capital outlay or operating expenses