AwardYear: 1995-1996 EnterChapterNo: 2 EnterChapterTitle: Student Eligibility and Financial Need SectionNumber: 1 SectionTitle: Student Eligibility PageNumbers: 3-38 This section discusses the student-eligibility criteria common to most of the SFA programs. Although there may be variations from program to program, the basic requirements, such as citizenship and satisfactory progress, are the same whether the student is applying for a grant, a loan, or work-study. See the program chapters (4-10) for specific information on requirements that apply to individual programs. In many cases, a student eligibility requirement is linked to an institutional requirement. For instance, a student must be making satisfactory academic progress to receive aid; so, a school must have a satisfactory progress policy in order to monitor this requirement. Many of these institutional requirements are mentioned in this chapter but are discussed in detail in Chapter 3. CITIZENSHIP In order to receive aid from the SFA programs, a student must be one of the following: 1. A U.S. citizen or national. The term "national" includes not only all U.S. citizens, but also citizens of American Samoa or Swain's Island. 2. A permanent resident of the U.S. A permanent resident of the United States must either demonstrate eligibility as evidenced by a comment on the SAR *1* that the INS match has been successful, or provide further documentation from the Immigration and Naturalization Service (INS). 3. Certain residents of the Pacific Islands. Citizens of the Marshall Islands and the Federated States of Micronesia (the former Trust Territories) are eligible for Federal Pell Grants, Federal Supplemental Educational Opportunity Grants, and Federal Work-Study funds only. On October 1, 1994, Palau became the third Freely Associated State along with Micronesia and the Marshall Islands. Citizens of Palau are still eligible for Federal Pell Grants, Federal Supplemental Educational Opportunity Grants, and Federal Work-Study funds after that date. See Appendix A for further information. 4. Other eligible noncitizens. An individual who can provide documentation from INS that he or she is in the United States for other than a temporary purpose with the intention of becoming a citizen or permanent resident. This category includes refugees, persons granted asylum, Cuban-Haitian entrants, temporary residents under the Immigration Reform and Control Act of 1986, and others. (For a detailed discussion of the different categories of eligible noncitizens and INS documentation, see Appendix A.) [[Attendance at foreign schools]] Individuals in the above four categories may receive aid at eligible schools in the United States under the SFA programs. These individuals may also receive Federal Family Education Loans (FFELs) at FFEL-participating foreign schools. *2* [[Match with INS records]] The Department collects the Alien Registration Numbers for permanent residents and other eligible noncitizens through the student application process. (An Alien Registration Number is assigned to each legal alien by INS.) This information, along with other identifying data, is then compared with INS records through a computer match. If a student's data matches the information in INS records, a comment is printed on the SAR and the electronic ISIR; the comment code is provided in the record description of the ISIR. The report then serves as documentation of the student's permanent- resident or eligible-noncitizen status. This is called "Primary Confirmation." [[Secondary Confirmation]] If the school has conflicting information about the student's citizenship status or if INS was unable to confirm eligibility for a student who claims to be an eligible noncitizen, the school must collect other documentation. This is called "Secondary Confirmation" and is discussed in Appendix A. Note especially that the INS Verification Number must now be provided in block 6 of the Secondary Confirmation Request Form (G-845S). If an INS match is attempted but the student's data is not confirmed, a 13-digit INS Verification Number will be assigned to the student and printed in the FAA Information area of the SAR. All secondary confirmation requests sent to INS without Verification Numbers will be returned unprocessed with one exception: If the school is performing Secondary Confirmation because technical processing difficulties prevented a computer check from occurring, the student will receive SAR comment 145, and no INS Verification Number will be printed. In that case, the school must write at the top of the G-845S form (preferably in red) "Comment 145 Present, Application Processed on ________ (processing date from SAR)." If on the other hand, the student's data did not go through the match because he or she failed to provide an Alien Registration Number on the application, the student will likewise not receive a Verification Number. However, in this case, the SAR should be resubmitted with the Alien Registration Number so that the computer match may be attempted. [[Changes in citizenship status during and award year]] If a student becomes a citizen or eligible noncitizen at any time during the award year, the student may be paid Pell Grant or campus-based funds as if he or she had been eligible during the entire award year. For example, if a student attending school during the 1995-96 award year is granted permanent-resident status (and is still enrolled) in May 1996, the student can receive Pell Grant and campus-based funds as if he or she had been eligible during all terms that the school considers part of that award year (July 1, 1995 to June 30, 1996). Similarly, the loan amount for a Federal Family Education Loan or Direct Loan borrower who becomes a citizen or an eligible noncitizen during a period of enrollment may be the same amount the borrower would have received if he or she had been eligible during the full period of enrollment. For example, a first-year student has sufficient need for a full $2,625 Stafford Loan but is not eligible due to his or her citizenship status. This student enrolls in a two-year program in which he or she begins classes in July 1995 and advances to second-year status in May 1996. If this student becomes a citizen or eligible noncitizen before May 1996, he or she can receive the full $2,625 for the first year and another loan for the second year, provided that he or she continues to meet eligibility requirements and has not exceeded applicable borrowing limits. If the same student does not become a citizen or eligible noncitizen until reaching second-year status (after May 1996), he or she cannot receive a loan for the first year but can receive the full amount for which he or she is eligible as a second-year student. Note that because a period of enrollment (the period for which the loan is made as determined by the school) must coincide with academic terms such as academic year, semester, trimester, quarter, or other academic period as defined by the school, the period of enrollment cannot be adjusted to cover any part of the first year. A school is required to check a student's eligibility for aid based on citizenship status when aid is first disbursed for the award year (period of enrollment for a Direct Loan or FFEL loan). If a student loses his or her citizenship or eligible noncitizenship status during an award year (or period of enrollment), the school does not need to take any action. This is true even if the student applies for and receives aid for a second academic year during the same award year (or period of enrollment). ENROLLMENT AS A REGULAR STUDENT IN AN ELIGIBLE PROGRAM With limited exceptions to be discussed later, to receive funds under the SFA programs, a student must be enrolled as a regular student in an eligible program. A regular student is enrolled for the purpose of obtaining a degree or certificate offered by the institution. The regulatory definition of an eligible program is based on requirements found in the statutory definitions for an eligible institution. There is an important distinction between the definition of an eligible program and the definition of an eligible institution. Some programs at an eligible school may not meet the requirements for an eligible program due to the length of the course, the admission requirements, or other factors, although the school as a whole meets the definition of an eligible institution and participates in the SFA programs. It is important that you carefully study the material in Chapter Three on program eligibility because program eligibility affects whether the student may receive aid. Three aspects of the definition of an eligible program are especially important: the educational credentials the program awards, its length, and, for "short courses," compliance with certain qualitative factors regarding graduation and placement percentages. These qualitative factors are discussed in Chapter Three. [[Educational credentials]] Regarding educational credentials awarded, with the exception of the exemptions for preparatory work and teaching certificates discussed on the next page, an eligible program must either lead to a certificate, degree, or other recognized educational credential or be at least a two-academic-year program that is acceptable for full credit toward a bachelor's degree. These requirements also apply to programs of study abroad that have been approved for credit by eligible institutions. Of course, to receive aid, a student in such a program must be enrolled as a regular student at the eligible institution that approved the course. At a proprietary institution of higher education or a postsecondary vocational institution, the program must lead to a certificate or degree and provide training to prepare students for gainful employment in a recognized occupation. (For the Pell Grant Program, an exception is granted for English as a Second Language [ESL] training. See Chapter Three for an extensive discussion of this and other program eligibility issues.) TWO EXCEPTIONS TO THE "ELIGIBLE PROGRAM" REQUIREMENT There are two cases where a student does not have to be enrolled in an eligible program to receive a FFEL or Direct Loan. Preparatory Coursework: Students who are not enrolled in degree or certificate programs are eligible for Federal Family Education Loans or Direct Loans for a period of up to one year if they are taking courses that are necessary for the student to enroll in an eligible program. These courses must be part of an eligible program otherwise offered by the school, although the student does not have to be enrolled in that program. For instance, a student who has already received a B.S. degree might need an additional 12 hours of specialized undergraduate biology and chemistry coursework to enroll in a graduate program. If a student is enrolled at least half time in these prerequisite courses and the courses are part of an eligible program, the student is eligible for loans for one consecutive 12-month period beginning on the first day of the loan period for which the student is enrolled. (The loan limits for first-year undergraduates apply. However, if the 12 month period represents more than one academic year, the student may receive multiple loans.) Teacher Certification: Another exception involving the FFEL, the Direct Loan, the Perkins Loan, and the Federal Work-Study programs allows eligibility for students who are enrolled at least half time in required teacher-certification programs, even though the teacher-certification program does not lead to a degree or certificate awarded by the school (e.g., the certificate may instead be granted by the state). The program must be required for elementary or secondary teacher certification or recertification in the state where the student plans to teach, or the state in which the student is completing the program. This exception is not intended to cover optional courses that the teacher elects to take for professional recognition or advancement or courses that the school recommends but are not required for certification. The school should document that the courses are required by the state for teacher certification. For purposes of the FFEL and Direct Loan programs, students are considered fifth-year undergraduates; therefore, the loan limit is $5,500, plus an additional $5,000 in unsubsidized loans if the student is classified as independent. [[Minimum program length]] The minimum length required for an eligible program varies with the type of institution. Special requirements for programs of less than 600 hours have recently been incorporated in the regulations. See Chapter 3. Program length not only determines a program's eligibility; it also affects the amount of aid that can be awarded to students in the program. For example, the amount of a student's Federal Pell Grant, Stafford Loan, or Direct Loan is reduced if the program is less than an academic year. (See Chapters Four and Ten.) ABILITY TO BENEFIT To receive aid from the SFA programs, a student must be academically qualified for study at the postsecondary level. A student with a high school diploma or its recognized equivalent is considered academically qualified for SFA purposes. The SFA regulations identify several recognized equivalents to a high school diploma. A General Education Development Certificate (GED) or a State Certificate is a recognized equivalent of a high school diploma. In addition, a school may admit into programs that are at least at the associate-degree level a limited number of students who do not have high school diplomas but who have excelled academically in high school and have met the school's admissions standards. Similarly, a student's postsecondary school academic transcript is considered the equivalent of a high school diploma if the student has completed a program that is at least two years in length and is acceptable for full credit toward a baccalaureate degree. [[Alternatives to high school diploma]] An SFA applicant who does not have a high school diploma or recognized equivalent can be determined to be academically qualified if he or she passes an independently administered test that has been approved by the Department or a process that has been both prescribed by the state in which the school is located *3* and approved by the Department. [[WORK IN PROGRESS]] On August 16, 1994, the Department published a Notice of Proposed Rulemaking to add regulations governing the approval and administration of tests. Until these regulations become final, schools should continue to follow the guidance provided in the Federal Register notice of December 30, 1992 and "Dear Colleague" letters. [[Independent administration]] The Federal Register of December 30, 1992 contains a list of approved tests, as well as testing requirements. This list was supplemented by Dear Colleague letter GEN 93-21, dated August 13, 1993. An approved test must be administered and graded by an individual or organization that has no current or prior fiscal interest in the school, other than an "arms-length" arrangement to administer the examination. Thus, the test may not be given or scored by a current or former employee, consultant, or student of the school, an owner or member of the board of directors, a person with a financial interest in the school, or a relative of any of these individuals. An exception is made for testing or assessment centers at egree-granting schools as long as these centers are independent of the admissions process and were in existence as of December 19, 1990. Generally, the school will arrange with one or more parties to administer approved tests to those students who do not have high school degrees or recognized equivalents. The Federal Register notice contains recommendations for sources of independent test administrators: - High school guidance counselors; - Qualified professional educators; - Regional and area Armed Forces Commands staff who are experts in education, training, and human resource development; - Test and measurement experts; or - Human resource development professionals. The use of a public or nonprofit center that offers assessment or testing services, provided the center operates independently of the postsecondary school, is also suggested. [[Approved tests]] A list of the tests that have been approved by the Department is shown on pages 2-10 and 2-11. A school may use more than one of the tests shown on the list. Note that this list does not include state tests that have been approved by the Department. The Department has approved all state tests that are required for all students entering a state's public postsecondary schools and assess the basic verbal and quantitative skills of these students. (If a state test meets the criteria for approval, all schools in the state may use it even if they are not public.) State examinations that do not meet these criteria may be submitted to the Department for review under the normal test-approval procedures. [[Selection of a test]] When selecting a test, the school should consider the following: Relevance of test to the educational program. Are the skills and abilities assessed important for the successful completion of the student's planned program of study? Level of difficulty of the test. Is the overall level of difficulty appropriate to the population of prospective students being assessed and to the coursework required in the program? Native language. If the student's program will be taught in a language other than English, the student should be permitted to take the test in that language. Tests for handicapped students. Students with physical handicaps should receive appropriate assistance in test-taking, in accordance with the guidelines developed by the American Educational Research Association, the American Psychological Association, and the National Council of Measurement in Education. All tests must be administered in accordance with the procedures specified by the test publisher. This includes, but is not limited to, time limits for completion, rules on how often and within what time frame the test may be re-administered, whether the test may be given verbally, and so on. If a test has multiple parts, ALL parts must be used in order for the test to be valid. In evaluating test results, the passing score cannot be more than one standard deviation below the mean for that examination for that type of program/curriculum. Test publishers routinely provide such information in their manuals. **[A chart containing "Tests Approved by the Department" from page 2-10 and 2-11 is currently unavailable for viewing. Please refer ence these pages in the Handbook for further information.]** [[Provision of GED program]] In addition to assuring that students who do not have high school diplomas or recognized equivalents successfully pass ability-to-benefit tests, the school must make a GED-preparatory program available to such students. The course does not have to be provided by the school itself, and the school is not required to pay for the costs of the program. However, the school must locate a program that is reasonably accessible to its students. For example, the school should locate a program that is offered at a place that is convenient for its students and take reasonable steps to ensure that the scheduling of the student's program permits participation. The law states that the GED program must be proven successful. A school may consider that all programs conducted by its state and local secondary schools meet this criteria. In addition, a program qualifies if the school has socumentation that statistically demonstrates the success of the program. A student without a high school diploma or recognized equivalent is not required to enroll in a GED program; however, a school can make this a requirement for admission. Although a student may not receive any SFA funds for study in all or part of a GED program, he or she remains eligible for SFA funds for enrollment in full-credit, nonremedial courses. (Participation in the GED program is not considered to be simultaneous enrollment in a high school program.) A student enrolled solely in remedial coursework, however, is not eligible for SFA funds. See the following discussion on enrollment in remedial courses. [[Duration of student test results]] A student who has taken an approved, independently administered test within the last 12 months may submit the official notification of the test score to the school to demonstrate his or her ability to benefit. If the school accepts the results of a previously administered test, it must obtain documentation that the test and test administration meet the federal requirements. If a student withdraws from school and then reenrolls more than 12 months after taking the test, he or she must take a new test. REMEDIAL COURSEWORK FOR STUDY AT THE POSTSECONDARY LEVEL Remedial coursework prepares a student for study at the postsecondary level. If a student is enrolled solely in a remedial program, the student is not considered to be in an eligible program and thus is not eligible for SFA funds. Additionally, if a student's acceptance into the eligible program is contingent upon the completion of the remedial work, the student cannot be considered to be enrolled in the eligible program until the remedial work is completed. The one exception to this rule, for the FFEL and Direct Loan programs only, is enrollment in preparatory coursework, which may be remedial in nature. (See page 2-7.) If the student is enrolled in a regular program that includes a limited amount of remedial coursework, payment for that coursework is permitted as long as the work is at least at the high-school level (as determined by the state legal authority, the school's accrediting agency, or the state agency recognized for the approval of public postsecondary vocational education). [[Determining enrollment status]] A problem may arise in determining the enrollment status for a student who is taking remedial coursework because the school may be giving no academic credit or only reduced academic credit for the coursework. To include noncredit remedial hours in the student's enrollment status for financial aid payments, the school must determine the number of hours of study the remedial course requires (both classroom and homework hours) and compare that number with the hours required for similar nonremedial courses. The school should then use the same number of credits for the remedial course as for a nonremedial course that requires a comparable number of classroom and homework hours. (Clock-hour schools should use the number of classroom hours attended in the remedial program.) To determine a student's enrollment status, the credits or clock hours assigned to the noncredit remedial course are simply added to the credits or clock hours of regular coursework. This affects whether the student is paid as a full-time, three-quarter time, half-time, or less-than-half-time student in the Pell Grant Program and whether the student is considered to be enrolled at least half time for the FFEL and Direct Loan programs. When calculating the student's cost of attendance, be sure to include the tuition paid for noncredit remedial work. [[Limit on remedial coursework]] A school may not take into account more than one academic year's worth of noncredit remedial coursework for a student (30 semester or trimester hours, 45 quarter credit hours, or 900 clock hours). ESL courses do not count against these limits. [[High School coursework/simultaneous enrollment excluded]] Noncredit remedial hours cannot be included in a student's enrollment status or cost of attendance if the remedial course is part of a program that leads to a high school diploma or its recognized equivalent, even if that course is required for completion of the postsecondary program. In other words, students may never receive funds for GED or high-school training, even if the course is offered at a postsecondary school. It is also prohibited for a student to receive SFA funds while he or she is simultaneously enrolled in an elementary or secondary school. Thus, a high-school student who is taking vocational training in the afternoon or weekends is not eligible for SFA funds, even if his or her entire program at the postsecondary school is postsecondary in nature. In addition, noncredit remedial courses cannot be included unless they would adequately prepare the student for postsecondary study after one year's time. ENROLLMENT STATUS Half-time enrollment is not a requirement to receive aid under the Federal Pell Grant Program or the campus-based programs. See Chapter Four for information on the effect of enrollment status on students' awards under the Pell Grant Program. See Chapters 5 through 8. The FFEL and Direct Loan programs do require a student to be enrolled at least half time to receive aid. A half-time student must be taking at least one-half the workload of a full-time student. [[Final Rule 4/29/94]] As specified in the April 29, 1994 regulations, the full-time load is defined by the school. This measurement may differ from the one used for other purposes at the school, such as for purposes of the registrar's office. The school's full-time definition for a program must be used for all students enrolled in that program and for all SFA purposes. For undergraduate students, but not for graduate students, the school's financial aid office must define full-time status to meet at least the following minimums: - twelve semester hours or twelve quarter hours per academic term in a term-based educational program; - twenty-four semester hours or 36 quarter credit hours per academic year for an nonterm educational program using credit hours. (The prorated equivalent must be used for programs of less than one academic year.); - twenty-four clock hours per week for an educational program using clock hours; - for a student who is taking a combination of courses offered in semester credit, quarter credit, and/or clock hours, prorated percentages of the minimums for credit- and clock-hour measurement equal to at least one; - a series of courses or seminars that equal 12 semester or quarter hours over a maximum of 18 weeks; or - the work portion of a cooperative education program in which the amount of work performed is equivalent to the academic workload of a full-time student. **[The graphic example from page 2-15 is currently unavailable for for viewing. Please reference that page in the Handbook for further information.]** A student taking only correspondence study is never considered to be enrolled more than half time. Note that a student's enrollment status is also important for deferment purposes. Direct Loan borrowers and new FFEL borrowers after July 1, 1993 are eligible for deferments as half-time students even if they do not receive additional loans during the deferment period. Previously, a student who had FFEL Program loans that had entered repayment could qualify for an in-school deferment only if he or she were enrolled full time or enrolled half time or three-quarter time and again borrowing an FFEL loan for the period covered by the deferment. (Students who first borrowed prior to the Amendments of 1986 had more stringent requirements for deferment.) See Chapter Ten, Section Two for more information. SATISFACTORY PROGRESS The regulations for satisfactory progress were initially published in October 1983 and amended on December 1, 1987, April 29, 1994, and November 29, 1994. In order for the school to monitor the statutory requirement that a student be making satisfactory progress, the regulations require schools to develop and apply a consistent and reasonable standard of academic progress, which must contain elements specified in the regulations. [[Consistency within categories of students]] The school's satisfactory progress policy for students receiving aid under the SFA programs must be at least as strict as the policy used for students who do not receive SFA aid. The policy must be applied consistently to all students within identifiable categories of students (such as full-time or part-time, graduate or undergraduate), and must conform to the standards of the school's accrediting agency if the school is accredited by a nationally recognized accrediting agency that has established satisfactory progress standards. [[Qualitative measurements]] The school's academic progress policy must include a qualitative measure of the student's progress, such as a required cumulative grade point average. The school may determine its own requirements, as long as it at least meets the minimum required by law and regulations. The law specifies that by the end of the second academic year, the student must, in general, have either a "C" average or its equivalent or have academic standing consistent with the requirement for graduation from the program. If a school does not use letter grades, a school's satisfactory progress policy should define the "equivalent of a 'C' average." Also, if a school permits less than a "C" average, it must be able to document that the average it uses is consistent with graduation requirements. In addition, schools may use a graduated grade point requirement, rather than a single fixed standard throughout the program. For instance, a school might set a minimum grade average of 1.75 (using a scale of 0.0 to 4.0) at the end of two academic years in a four-year degree program. Even though the school requires at least a 2.0 average for graduation, it can permit a lower standard after two years if its policy requires progression toward those graduation requirements. [[Quantitative progress]] A grade point average alone is not a sufficient measure of progress. For instance, a student might enroll for 12 credits a semester but withdraw from two classes that he or she was failing. The student might have an "A" average in the two remaining classes but still not be progressing towards graduation at an acceptable pace. To accurately measure the student's progress in the program, the satisfactory progress policy must have a quantitative measure (the number or percentage of courses, credit hours, or clock hours completed), as well as a qualitative measure (the grade point average in those courses completed). [[Maximum time frames and increments]] [[Final Rule 11/29/94]] To quantify academic progress, a school must set a maximum time frame in which a student is expected to finish the program. The November 29, 1994 regulations specify that for an undergraduate program, the maximum time frame may not exceed 150 percent of the published length of the program measured in academic years, terms, credit hours attempted, or clock hours completed, as appropriate. For instance, if the published length of an academic program is 120 credit hours, the maximum time frame established by the school could not exceed 180 attempted credit hours (120 times 1.5). To ensure that a student is making sufficient progress throughout the course of study, the school must divide the program into equal evaluation periods called increments. An increment may not be longer than half the program or one academic year, whichever is less. In other words, in a 700-hour program, an increment could not exceed 350 hours. In a 2000-hour program, an increment could not exceed 900 hours, if the school used a 900-hour academic year definition. Increments are also expected to coincide with payment periods. Once the school defines the length of each increment, at the end of each increment, it must compare the number of hours the student attempted with the number of hours the student successfully completed to see whether the student is progressing at a rate that will allow him or her to finish the program within the maximum time frame. **[The graphic example from page 2-17 is currently unavailable for viewing. Please reference that page in the Handbook for further information.]** [[Students with other than full-time enrollment status]] In the preceding example, the school has established a minimum percentage of hours the student must complete each academic year. By setting a percentage, rather than a fixed number of hours or credits that must be completed each academic year, it is very easy to adjust for changes in a student's enrollment status from one period to the next or to develop different standards varying with enrollment status. For instance, if in the second academic year, George had enrolled for only 15 credit hours, his progress would have been measured as follows: 80% x 45 credit hours attempted (30 in first year; 15 in second) = 36 credits If George had successfully completed 9 of the 15 credits attempted in the second year, he would be considered to be making satisfactory progress (27 completed in the first year, plus 9 in the second equals 36 credits, the minimum which must be completed to achieve an 80 percent completion ratio). [[Graduated completion percentages]] As was the case for the qualitative standards, a school may use a graduated completion percentage for each year. For instance, a school might use a more lenient completion standard in the student's first academic year, but gradually increase the completion standard during the course of study to ensure that the student will complete the program requirements within the maximum time frame. **[The graphic example from page 2-18 is currently unavailable for viewing. Please reference that page in the Handbook for further information.]** [[Time frames at clock-hour schools]] At some clock-hour schools, a student is given "credit" for every hour attended and thus the hours attempted are always equal to the hours earned. This is commonly the case at beauty or barber schools. In such cases, the quantitative standard must be based on calendar time (in weeks or months). For instance, if a school offers a 900-clock-hour program that normally takes 8 months to complete, it could set a maximum time frame of 12 months for completion of the program. Thus a student would have to complete the first 450 hours of the program within 6 months to be considered to be making satisfactory progress. On the other hand, some clock hour schools structure their programs with individual subject courses that a student attempts and can either pass or fail based upon the student's performance. In other words, even though the student has attended the clock hours for a given subject, he or she may not get credit for those hours of attendance because of the grade attained. (This is similar to credit hour schools where credits may be withheld despite the hours having been attempted and attended.) In such cases, examination of the clock hours successfully completed as a percentage of the hours attempted, as was discussed earlier, is appropriate. [[Additional elements of a progress policy]] The regulations further state that the school's satisfactory progress policy must explain how withdrawals, grades of "incomplete," courses which are repeated, and noncredit remedial coursework affect the determination of the student's progress. A school must also have procedures for the student to appeal a determination that he or she is not making satisfactory progress and provide specific procedures for the student to reestablish that he or she is maintaining satisfactory progress. [[Standards must be cumulative]] The quantitative and qualitative standards must be cumulative and must include all periods of the student's enrollment, even those for which the student did not receive aid from the SFA programs. Bear in mind that other than the minimum qualitative standard of a "C" average by the end of the second academic year (or an average consistent with graduation standards) and the minimum quantitative standard of no more than 1.5 times the normal published time frame, the Department does not regulate a school's standards of satisfactory progress; instead, it merely stipulates what the components of the policy must be. [[Waivers for special circumstances]] If a student does not meet the school's standards of satisfactory progress, he or she may not receive further aid from the SFA programs, unless the school uses its discretion to waive the satisfactory-progress requirement. The statute gives specific examples of cases in which the school might choose to waive the standards for a student. Some examples are an injury to the student, an illness of the student, or the death of a relative of the student. Schools that permit waivers of satisfactory-progress standards must have written procedures explaining when a student's special circumstances merit the waiving of the satisfactory-progress standards. [[Reinstatement of aid]] If a student is deemed not to be making satisfactory progress but later meets the standards, his or her eligibility for SFA funds is reinstated. A student may be paid for the payment period in which he or she regains satisfactory progress, but not for any payment periods in which the student did not meet the standards. For FFELs and Direct Loans, a loan period may not include any periods in which the student did not meet the standards. LOAN DEFAULTS AND GRANT OVERPAYMENTS In general, a person is not eligible for SFA funds if he or she is in default on an SFA loan or owes a repayment on an SFA grant. (This also applies to a parent seeking a PLUS loan (either under FFEL or the Direct Loan Program). For the parent to receive a PLUS loan, neither the parent nor the student may be in default or owe a refund on SFA funds.) In addition, the student may not have pro perty subject to a judgment lien for a debt owed to the United States. For example, if the IRS had placed a lien on the student's property, failure to pay this lien or to make satisfactory arrangements for repayment would make the student ineligible for SFA funds. The General Provisions regulations contain several exceptions to these blanket rules, as noted in the following discussion of overpayments. Overpayments [[Eliminating Pell Grant overpayments]] If a student receives a Federal Pell Grant overpayment, he or she may continue to receive SFA funds if the overpayment can be eliminated by reducing the subsequent Pell Grant payments in the same award year. If the overpayment was the result of the school's error and the school cannot eliminate the overpayment in the same award year, the school may continue to pay the student SFA funds if the student agrees in writing to repay the Pell overpayment within six months. If the overpayment resulted from the student's error, the student cannot receive additional SFA funds until he or she repays the overpayment in full. (See Chapter Four, Section Six for more information on Pell Grant overpayments.) [[Overpayment hold file]] If a school is unable to recover a Pell Grant or FSEOG overpayment due from the student, the school must report the overpayment to the Department. Reporting this information will result in the student's future FAFSAs being flagged for resolution when they are received by the Central Processing System. The action taken depends on when the overpayment occurred. Pell Grant overpayment records reported to the Department prior to approximately 1986 are in the Department's Overpayment Hold File. (FSEOG overpayments were not recorded prior to 1986.) When a student for whom an overpayment was reported prior to 1986 applies, he or she will receive a SAR with no EFC calculated and with a comment explaining that a repayment is owed and that the student should contact the Department of Education. Records reported to the Department for Federal Pell Grant and FSEOG overpayments after approximately 1986 are tracked in the NSLDS. The student will receive an EFC with a comment regarding the steps to be taken to resolve the overaward. In addition, a "C" will be printed next to the EFC, indicating that the financial aid administrator must resolve the issue before payment is made. [[FSEOG, SSIG, and Perkins overpayments]] A student who receives a FSEOG, SSIG, or Federal Perkins overpayment may continue to receive SFA funds if the overpayment can be eliminated by adjusting subsequent financial aid payments, other than Pell Grants, within the same academic year. For instance, if the student's combined aid from the Pell Grant, FSEOG, and Perkins Loan programs exceed his or her financial need, the student can co ntinue to receive SFA funds if the later disbursements of the FSEOG or Perkins Loan for that academic year can be reduced by the amount of the overpayment. If a reduction of these later disbursements is insufficient to eliminate the overpayment, the school must eliminate it by canceling subsequent disbursements and returning to the program accounts all or part of the disbursements already made. This may include having the student repay funds that were disbursed directly to him or her. If the student is required the repay funds, he or she cannot receive additional SFA funds until the full overpayment has been repaid. (See Chapter Five, Section Two for more information on FSEOG and Perkins overpayments.) Loan Defaults [[Defaulted but repaid in full]] If a student has defaulted but has repaid the loan in full, the student is eligible for all SFA funds. This is also the case if the student and the holder of the loan agree on a compromise settlement and the borrower pays that compromised amount. It is not relevant whether repayment was completed voluntarily or otherwise (that is, through IRS offset or wage garnishment). Note that a school may consider that the student's prior default on a loan indicates an unwillingness to repay future loans and thus deny Perkins Loan funds even if the student has repaid the defaulted loan in full. [[Satisfactory arrangements for repayment]] If a student is in default on a Federal Perkins Loan (including NDSL), a FISL, Federal Stafford, Federal Direct Loan, Federal SLS *4*, ICL, Federal Consolidation Loan, or Federal Direct Consolidation Loan or on a Federal PLUS loan or Federal Direct PLUS Loan he or she received as a parent, the student may continue to receive SFA funds if he or she has made satisfactory repayment arrangements with the holder of the loan. Before a school may pay a student who is in default, it must receive a written statement from the holder of the loan stating that the student has made satisfactory repayment arrangements. For FFEL loans, ICLs, Direct Loans, NDSLs, and Perkins Loans assigned to the Department of Education, a student is considered to have made "satisfactory arrangements for repayment" after making six consecutive full, voluntary payments on time. Although the student is again eligible for aid at that juncture, the loan cannot be rehabilitated under the Direct Loan Program or the FFEL Program (assuming the lender agrees) until 12 consecutive full, voluntary payments have been made on time. At that point, the student also becomes eligible for in-school deferment on the loan. (See Chapter Ten, Section Six for more information on loan rehabilitation provisions.) A defaulted Direct Loan will automatically be rehabilitated after 12 consecutive full, voluntary payments have been made on time. With respect to an ICL, an NDSL, or a Perkins Loan that has not been assigned to the Department, the school still collecting the loan has discretion in determining what constitutes satisfactory repayment arrangements. For loans in this category, the letter confirming satisfactory arrangements should be obtained directly from the school that made the loan. [[Loans discharged in bankruptcy]] Students who have discharged loans in bankruptcy are eligible for grants, work-study, and loans. Prior to October 22, 1994, students who had defaulted loans discharged could not receive loan funds unless they reaffirmed the discharged debt and made satisfactory repayment arrangements. However, as a result of changes made by the Bankruptcy Reform Act of 1994, these students are no longer required to reaffirm the loans before receiving new loans. [[Loans canceled for total and permanent disability]] Beginning July 1, 1995, a borrower whose loan was canceled due to total and permanent disability may receive all SFA funds. If the student wishes to borrow another SFA loan, the student must obtain a certification from his or her doctor that the disability condition has improved and that the student has the ability to engage in substantial gainful activity or school attendance. The student must also sign a statement indicating that he or she is aware that his or her new SFA loan cannot be canceled in the future on the basis of any present impairment, unless that condition substantially deteriorates to the extent that the definition of total and permanent disability is met. Previously, to borrow again under the same loan program, the borrower was required to obtain the doctor's certification, sign the aforementioned statement, reaffirm the previous loan amount, and make satisfactory repayment arrangements. Note that these provisions apply only if the student wishes to receive the same type of loan as the one that was canceled. [[Certification required]] The student must certify that he or she is not in default on an SFA loan or does not owe an overpayment on an SFA grant. A "Certification Statement on Refunds and Default" is printed on Part 1 of the SAR. However, the school may choose to collect the certification on other documents. If the school chooses to collect this statement on another document, the school should be sure that the document additionally requires the student's SSN. The law requires that the student include this information with the certification, but the line is omitted on the SAR because the student's SSN is already printed on the SAR. Although the NSLDS makes it easier for an institution to verify a student's eligibility, a school is required to resolve any conflicts between the NSLDS information and other information it has received from the student. For example, if the NSLDS indicates that a student is not in default but the school has documentation indicating that the student is in default, the school may not pay the student or certify a loan application until the conflict is resolved. **[The chart "Effect of Loan Status on Student Aid Eligibility" from page 2-23 is currently unavailable for viewing. Please reference that page in the Handbook for further information.]** [[Default matches]] Previously, the Department conducted two matches to determine whether an applicant had defaulted on a federal student loan: 1. the Title IV Default Match, which contained information on all defaulted federal student loans assigned to the Department as well as overpayments on grants, and 2. a Guaranty Agency Default Match, which contained data on defaulted federal student loans held by guaranty agencies. For the 1995-96 award year, the NSLDS replaces them. The NSLDS is a new database established under contract with the Department to collect student loan information from guaranty agencies, lenders, schools, and the Department's Title IV Default file. Information about all students who have previously borrowed under the SFA loan programs will be maintained in the data base and updated on at least a monthly basis with information provided by both guaranty agencies and schools. The NSLDS page will appear in Part 1 of every SAR, directly after the FAA Information page. Both the Guaranty Agency and the Title IV Default match flags and comments have been replaced by the NSLDS flag and comments. It is anticipated that this new matching program will provide more timely and complete information than was previously possible. An applicant who is found to be in default and who has not made satisfactory arrangements to repay the loan or who owes a Federal Pell Grant or a FSEOG overpayment will receive a comment on the NSLDS page of the SAR directing the applicant to contact the Department or appropriate guaranty agency. In the case of a defaulted loan that is held by a guaranty agency, the name and telephone number of the guaranty agency holding the loan will appear on the NSLDS page. If a student makes satisfactory arrangements to repay a defaulted loan (see "Default with Satisfactory Arrangement" in the chart), the Department or the guaranty agency will send the student documentation of the resolution. The student must submit this documentation to the school to reestablish eligibility for SFA funds. Other Hold Files [[Verification hold file]] If a student has unresolved issues from a previous verification, his or her records will be placed in the Department's Verification Hold File. A student whose application is in the "Hold File" will receive a SAR with no EFC calculated. The SAR will instruct the student on how to resolve the issue. Either comment 8 or 18 will appear. [[Drug abuse hold file]] The Anti-Drug Abuse Act of 1988 gives courts the authority to suspend eligibility for federal student aid when sentencing an individual convicted of possession or distribution of a controlled substance. Students who apply for federal student aid receive the following warning on their SARs: "As is more fully set forth in Section 5301 of the Anti-Drug Abuse Act of 1988, if you are convicted of drug distribution or possession, your eligibility for Title IV student financial aid is subject to suspension or termination." A student who has been denied aid will be placed on the Department's Drug Abuse Hold File upon direction from the Department of Justice. The student will receive a SAR with no EFC calculated and a comment student wishes to contest the finding. (Also note that under the Anti-Drug Abuse Act, schools that receive campus-based funds are required to certify on a form provided by the Department that they will provide a drug-free workplace. This is an institutional eligibility requirement, and is therefore discussed in Chapter Three, Section Two.) POSSESSION OF A VALID SOCIAL SECURITY NUMBER [[HEA '92]] The Higher Education Amendments of 1992 require that all students provide a Social Security Number (SSN) to be eligible to receive SFA funds. Effective for the first time in 1994-95, matches are being conducted between the Social Security Administration and the Central Processing System to verify the correctness of the student's number and the correspondence of the name and date of birth to that number. Previously, the CPS checked only to see if the SSN the student reported was within a valid range of Social Security Numbers that had been issued. In contrast to data matches such as that for the student's immigration and Selective Service status, no comment appears if the match confirms the correctness of the student's SSN. Please note that, as is the case with all student data, if the school uncovers conflicting information, it must resolve those conflicts before paying the student, even if no comment appears on the SAR. [[Discrepancy on date of birth]] If a student's name and SSN match but the Social Security Administration shows a different date of birth, the student will receive a comment, and the school should resolve the discrepancy. (Often it will be because the student has reported the current year as his or her year of birth.) No further action is required through the CPS. [[Discrepancy on SSN]] If the SSN does not match, the student will initially receive reject code "S" and comment 24, instructing the student to verify or correct the SSN. If the student confirms that the SSN is correct and can provide evidence to the financial aid administrator, the student may verify the number on the SAR, and an EFC will then be calculated. Note that subsequent corrections or resubmissions of other SAR data do not go back through the Social Security Administration match, once the student verifies that the SSN is indeed correct. [[Discrepancy on name]] If the SSN and the date of birth match but there is a discrepancy in the student's name, the student will receive a SAR with a "C" flag and comment 61, telling the student to either correct the appropriate items or contact the Social Security Administration to resolve the problem. This is most likely to happen when a student has used a nickname or when a student has failed to inform the Social Security Administration of a name change (usually as a result of marriage). Upon receipt of documentation from the student that the submitted SSN is correct, the school may disburse funds. The application does not need to be resubmitted to the processor on this basis. Comment 61 will print only on the original transaction; it will not print on subsequent SARs. [[No match conducted]] If no match was conducted, the CPS will check to see whether the reported SSN is within a valid range. If the SSN is within a valid range, the student will receive either comment 59 (if the student's record was not sent to the Social Security Administration because he or she did not provide a last name) or comment 58 and a "C" flag (if the Social Security Administration could not perform the match). For cases in which the SSN is within a valid range, no resubmission is required, as long as the institution maintains documentation of the accuracy of the SSN. However, if the student did not provide a last name, the student should submit a correction to supply the name. If the student must resubmit the SAR (either to supply a name or to correct other data), the data will be transmitted to the Social Security Administration, and the aid administrator must be careful to examine the results of the match when they are received from the CPS. If the SSN is not within a valid range, the student will receive a rejected SAR and comment 23 (stating that it appears that the SSN is not valid). The student must then verify or correct the SSN and resubmit the SAR. The student's application will then pass through the SSN match. The school may make an initial disbursement of aid before the new SAR is received if the student submits documentation to the financial aid administrator verifying the number. [[Subsequent changes to SSN]] Correction Applications have been virtually eliminated for 1995-96. There are only two rare cases when they may be necessary: 1. A student may attempt to change an SSN that was matched by the Social Security Administration. These cases usually arise when spouses or siblings with similar names use each other's SSNs by mistake. In such a case, both applicants would have the same CPS identification number, which comprises the SSN and the first two letters of the applicant's last name. This will cause problems for both applicants in the CPS and in the Pell disbursement system. If this occurs, the student using the wrong SSN must complete and submit a Correction Application to change the SSN. 2. A student's application may manage to successfully pass the SSN match even though there is a problem with the applicant's SSN. In such a case, the student will not be able to correct the SSN on his or her SAR (and the aid administrator cannot correct it electronically) because the SSN has .already been confirmed. The student must use a Correction Application to correct the SSN. A financial aid administrator who needs a 1995-96 Correction Application should contact the Department's Application and Pell Processing Systems Division and ask for the Correction Application Coordinator. The telephone number is 1-202/260-9988. The Department will determine whether a Correction Application is necessary in each case. If a Correction Application is necessary, it can be mailed to the school or to the student, as requested. [[Exception for students from certain Pacific Islands]] Students from the Republic of the Marshall Islands, the Federated States of Micronesia, and the Republic of Palau who do not have SSNs should send their FAFSAs to the following address rather than to the address listed on the FAFSAs or on the envelopes provided with the FAFSAs: Federal Student Aid Programs P.O. Box 4057 Iowa City, IA 52243 It is preferable that the school "bundle" such applications and send them as a group. These applications will be assigned a special identifying number in lieu of an SSN and then sent to the CPS for regular processing. The application will initially fail the SSN match and be rejected, but it will be intercepted by the FAFSA processor and resubmitted. A letter will also accompany the student's SAR explaining the assigned number and the SSN verification process. Correction Applications have been virtually eliminated for 1995-96; therefore, if the student's application is rejected for other reasons, the student should make corrections on his or her SAR. REGISTRATION WITH SELECTIVE SERVICE If a person is required to be registered with the Selective Service System, he must have, in fact, registered before he can receive aid from the SFA programs. With the exceptions noted below, all males between the ages of 18 through 25 are required to register with the Selective Service System. This includes all students with permanent resident and other eligible noncitizenship statuses. [[Exceptions to registration included on the Statement of Registration Status]] The most common exceptions to the registration requirement are included on the Statement of Registration Status. These exceptions are- 1. a female person *5*; 2. a male currently in the armed services on active duty (does not apply to members of the Reserve and National Guard who are not on active duty); 3. a male who is not yet 18 at the time he completes the application (an update is not required during the year, even if the student turns 18 after completing the application); 4. a male born before 1960; and 5. a citizen of the Federated States of Micronesia, the Marshall Islands or the Republic of Palau. [[Exceptions not included on the Statement of Registration Status]] There are certain less common situations where the requirement for registration is also waived. Please note that these constitute allowable exceptions only if the student was not required to have already registered prior to meeting one of these criteria and if the student qualifies for an exception for the entire time he is 18 through 25. The exceptions are- 1. students who are unable to register due to being hospitalized, incarcerated, or institutionalized; 2. students who are enrolled in an officer procurement program at The Citadel, North Georgia College, Norwich University, or Virginia Military Institute; 3. students who are commissioned officers of the Public Health Service on active duty or members of the Reserve of the Public Health Service; and 4. students who are commissioned officers of the National Oceanic and Atmospheric Administration. Since schools will rarely have students in the above categories, in order to conserve space on the Statement of Registration Status, the Department has not included these exceptions on the form signed by students. Instead, students meeting one or more of these criteria are exempted through reference in the regulations. Whenever a student is not required to provide a Statement of Registration Status on this basis, the school must document the student's status in his or her folder. If the student is not clearly exempt from the requirement to register, the school should ask the student for a Status Information Letter from Selective Service documenting the exemption. [[Registration for students not already registered]] The Department takes several steps to ensure that students register with the Selective Service System when required. To make it easier to register, a student may check Item 103 on either the FAFSA or the SAR, giving permission to the Department of Education to register the student with Selective Service if the student is eligible.*6* As required by the HEA, the Department matches student aid applications with registration records from Selective Service. If the student's SAR displays comment 29, "Your registration or your exemption status has been confirmed by Selective Service," the school may consider that the student's registration has been confirmed, and the student is not required to complete the Statement of Registration Status. [[Records match]] If, on the other hand, Selective Service was unable to confirm the applicant's registration or a match was not conducted for technical reasons, one of the following five comments will appear: 1. Comment 14: The student received aid in a previous year and may not have registered. (See Appendix C for the text of all five comments.) 2. Comment 30: The Selective Service reports that the student is not registered. 3. Comment 32: The Selective Service was unable to conduct a match. 4. Comment 33: The student did not provide enough information for registration or was over the age for registration. 5. Comment 37: The Selective Service was unable to complete the student's registration. In all five cases, the school must withhold all SFA funds and may not certify the student's loan application until the problem is resolved. Note that whenever these comments appear, a "C" will appear next to the student's EFC to alert the aid administrator that there is an eligibility problem that needs to be resolved before disbursements may be made. [[Documentation required for students identified during the records match]] Unless the aid administrator has documentation that a student who receives one of these comments is exempt from registration, the student must present his Selective Service Registration Acknowledgement or Verification postcard or letter of registration confirmation to the financial aid administrator as documentation of being properly registered; otherwise the student is not eligible for SFA funds. If the student does not have any of these documents, he must reconcile the conflict with the Selective Service. If the conflict is resolved in the student's favor, the student will receive a letter from Selective Service documenting that the student is registered or is exempt from registration. Selective Service does not provide letters for females because they are not required to register. [[Students who are beyond the permissible age to register]] In recent years, a number of students have been denied aid because they failed to register with the Selective Service before their 26th birthday. (The Selective Service will register only males age 18 through 25, leaving older students with no way to remedy their earlier failure to register.) The Military Selective Service Act was amended to require a school to pay an otherwise eligible student who is 26 or older and did not register when required if the student demonstrates that he did not knowingly and willfully fail to register. The Department of Education's regulations also allow such students to receive aid if the student served on active duty with the Armed Forces. This is because it is presumed that a person who has actually served in the Armed Forces is not trying to avoid registering for duty. For these students, the financial aid administrator should obtain a copy of the student's DD Form 214, "Certificate of Release or Discharge from Active Duty," showing military service with other than the reserve forces, Delayed Entry pool, and the National Guard. For those students who have not served on active duty, the financial aid administrator must determine whether the student knowingly and willfully failed to register. In other words, did the student know of the registration requirements and, nevertheless, choose not to register? The procedures that a financial aid administrator uses in making the determination follow. The aid administrator's decision is final and cannot be appealed to the U.S. Department of Education. Unless the aid administrator can document that the student meets one of the allowable exemptions to registration or has served on active duty in the Armed Forces, the first step is for the student to write to the Selective Service System for a Status Information Letter concerning his failure to register. The student should provide as complete a description about his situation as possible: where he was living during the period, whether he was incarcerated or institutionalized, his citizenship status during the period, if applicable, and so on. In January 1995, the Selective Service began using revised versions of the Status Information Letters. Copies of the revised letters are included in Appendix B. Each of these letters has a code in the lower left-hand corner that indicates the type of letter. The revised letter types and codes are: [[General exemption]] - E1-E7 Letters with one of these codes indicate that the student was not required to register or was exempt for the entire time he could have registered (age 18 through 25). [[DOB before 1960]] - NR A student will receive this letter if he was born before 1960 and is therefore not required to register. [[Required to register, no record of attempt]] - RR The student will receive this letter if he indicates that he attempted to register but Selective Service has no record that he did register.. [[Military service: noncontinuous]] - NM The student will receive this letter if he was on active duty with the Armed Forces but only for a portion of the time when he could have registered (age 18 through 25) and was, therefore, required to register but did not. [[Required compliance letter sent]] - RL The student will receive this letter if he was required to register, the Selective Service has no record that he registered, and Selective Service records indicate he was sent one or more letters requesting his compliance with the registration requirement during the period he was required to be registered. [[Required, no valid exemption]] - RD A letter with this code indicates that the student provided a reason for not registering or documentation indicating that he was exempt and the Selective Service determined that the reason or documentation was not valid; therefore, this code indicates that the student was required to register but did not. If the student receives a "general exemption letter" (codes E1-E7) or "DOB before 1960" letter (code NR), the student is exempt from registration and may receive aid. If the student receives any of the other letters, the school must determine, based on all relevant evidence, whether the student knowingly and willfully failed to register. The letter from Selective Service is part of the relevant evidence. For example, if the student received a letter indicating a compliance letter had been sent (code RL), this would be considered a negative factor in making the determination. On the other hand, if the student received a "Military Service: Noncontinuous" letter (code NM), the aid administrator could determine that the student had not knowingly and willfully avoided registration (see the discussion of military service on page 2-30). Most of the letters state that the final decision about the student's eligibility rests with the agency awarding funds; for the purposes of the SFA programs, the decision is made by the financial aid administrator, who represents the Department. When making the decision as to whether the student had knowingly and willfully failed to register, the financial aid administrator should consider the following factors: - where the student was living during the period when he was ages 18 to 26. For example, if a student was living abroad, it is more plausible that he would not come into contact with the requirement for registration. - whether the student claims that he thought he was registered. Mistakes in recordkeeping can occur. Correspondence indicating an attempt to register could form a basis for determining that the student did not knowingly and willfully fail to register. On the other hand, a letter from Selective Service stating that it had received no response to correspondence sent to the student at a correct address would be considered a negative factor. - why the student was not aware of the widely publicized requirement to register when he was ages 18 through 25. If the school determines that the failure to register was knowing and willful, the student is ineligible for all SFA programs. The school's decision as to whether the student has willfully failed to register CANNOT be appealed to the Department of Education.*7* BORROWING IN EXCESS OF LOAN LIMITS A student who inadvertently borrows more than the annual loan limits under the SFA loan programs loses his or her eligibility for further SFA assistance until the excess funds have been repaid in full. Borrowing more than the cumulative loan limits results in in eligibility for further SFA funds until the student's relevant cumulative loan limit once again exceeds the amount he or she has borrowed. Borrowing in excess of annual limits should be relatively rare because the school that certified the loan should have verified compliance before certifying. However, the student may have exceeded the allowable annual limit if he or she borrowed from multiple schools and the aid administrator did not receive the financial aid transcripts before certifying the new loan, if the student used different names when borrowing, or if the student failed to disclose the names of other schools he or she had attended. Cumulative limits could be exceeded for the same reasons or because of confusion over amounts borrowed versus amounts outstanding. If a student inadvertently borrows in excess of the loan limits, he or she may regain eligibility for SFA funds by repaying the excess amount. The charts on the next two pages show the maximum annual and cumulative loan and grant limits. Note that for PLUS loans and Direct PLUS loans, the annual loan limit for parents equals the student's cost of attendance minus any other financial aid the student receives. There is no other borrowing limit under this program. **[The charts on annual and aggregate loan limits from pages 2-34 and 2-35 are currently unavailable for viewing. Please reference these pages in the Handbook for further information.]** MEMBERS OF A RELIGIOUS ORDER Because members of a religious order are not considered to have financial need, such a student may not receive a subsidized FFELP loan, a Direct Subsidized Loan, a Federal Pell Grant, or campus-based aid if he or she is a member of a religious community, society, or order that directs the student's course of study or provides subsistence support to the student. Members of religious orders are eligible for unsubsidized FFELP loans and Direct Loans. INCARCERATED STUDENTS If a student is incarcerated, he or she is ineligible for an SFA loan. Incarcerated students are eligible for FSEOG and FWS. The Violent Crime Control and Law Enforcement Act of 1994 recently amended the HEA to state that a Federal Pell Grant may not be awarded to any individual who is incarcerated in any federal or state penal institution. This amendment is effective for periods of enrollment beginning on or after September 13, 1994. For 1995-96, the student is eligible for a Pell Grant only if he or she is incarcerated in a local penal institution.*8* CORRESPONDENCE AND TELECOMMUNICATION COURSES Students enrolled in correspondence courses are ineligible for aid from the SFA programs unless the courses are part of a program leading to an associate, bachelor, or graduate degree. Students in courses of instruction offered in whole or in part through telecommunications are not considered to be enrolled in correspondence courses if the telecommunications program leads to an associate, bachelor, or graduate degree from that school and telecommunications and correspondence courses at the school total less than 50 percent of the courses offered. See Chapter Three, Section One for more information on telecommunications courses. STUDENT CERTIFICATIONS AND STATEMENTS In order to receive aid from the SFA programs, a student must sign certain statements, most of which relate to the various eligibility requirements that have been discussed elsewhere in this chapter. These statements are combined into a single block and printed for the school's convenience on the back of Part 1 of the SAR. However, the school may instead decide to collect the statements elsewhere. If the school collects them on a form of its own design, the form must include the student's Social Security Number. (The SSN is not needed on the statement as it appears on the SAR because the student's SSN appears elsewhere on the form.) An institution may not require a student to submit a SAR only for the purpose of collecting these statements; that is, if a school has a valid federal output document for which it must make payment, it cannot require the student to submit a SAR. The following are the required statements: 1. Statement of Registration Status, 2. Statement of Educational Purpose, and 3. Certification on Refunds and Default. Although the Statement of Updated Information has been removed from the SAR, three items still may need to be updated if they change, unless those changes were the result of a change in the marital status of the student. A student's dependency status must be updated if it changes any time during the award year. If a student is selected for verification, he or she must also update household size (items 46 or 51) and number in postsecondary education (items 47 or 52) if they change after the SAR has been submitted. Changes in household size and number in postsecondary education that are the result of a change in the dependent applicant's parents' marital status should be reported. Remember also that because Correction Applications are not being used, corrections or updates that change the applicant's dependency status are now made on the SAR. [[Statement of Registration Status]] If a student's registration status is confirmed through the match with the Selective Service, he is not required to sign a Statement of Registration Status. Completion of the Statement of Registration Status is also not required if the school knows that the student meets one of the exceptions to required registration, such as being born before 1960 or being female. However, since some schools wish to certify loan applications before the matches are completed, they routinely have all students complete the statement. The school may also use the statement as documentation in a case in which the student qualified for an exception to the registration requirement. The student must check off the criterion that applies to his or her circumstances and sign in the place below. [[Statement of Educational Purpose]] In the Statement of Educational Purpose, the student certifies that he or she will use any SFA funds received only for educational expenses. In the case of the FFEL Program, the statement must be filed with the lender. For this reason, the Statement of Education al Purpose is included on the loan application. For the Federal Pell Grant, campus-based, and Direct Loan programs, the statement must be filed with the school the student is attending. Completion is required once every award year. [[Certification on Refunds and Default]] The Certification on Refunds and Default is no longer combined with the Statement of Educational Purpose. It now appears above the Statement of Educational Purpose on Part 1 of the SAR. This certification states that the student does not owe a repayment on any SFA grant and either is not in default on any SFA loan or has made satisfactory repayment arrangements on any defaulted SFA loan in his or her name. This certification also states that the student has not borrowed in excess of the loan limits under the SFA programs at any school. The school may rely on this statement only until confirmation is received from the financial aid transcripts. Remember that a student who is in default or owes a repayment is generally not eligible for SFA funds (the exceptions were discussed earlier in this chapter under Loan Defaults and Grant Overpayments). The school must keep the signed statement(s) on file for the duration of the record retention period. (See Chapter Three, Section Eight.) SPECIFIC PROGRAM REQUIREMENTS In addition to these general requirements, some programs have additional eligibility rules. For instance, the Pell Grant Program requires that the school receive a valid federal output document or valid electronic record while the student is still enrolled and eligible for payment. The specific program requirements for each program are discussed in Chapters Four through Ten. *1* Except where noted, the term SAR means either a Student Aid Report or any other official output document (that is, Institutional Student Information Report [ISIR] or electronic ISIR). Because some ISIRs do not contain the certification statements that a student may be required to sign, these statements must be separately obtained. *2* In the case of parents who want to take out a Federal PLUS loan for a dependent undergraduate student, both the parent(s) and the student must meet the general requirements for a citizen or eligible noncitizen (that is, categories 1-4 above). *3* In the case of a school with branch campuses, the process must have been approved by the state in which the branch the student is attending is located. *4* Federal SLS Loans include Auxiliary Loans to Assist Students and PLUS Loans to students, former names of SLS loans. *5* Whether a person is a male or female is a matter for medical determination. If a school needs to determine whether a student is male or female for Selective Service purposes, the school should tell the student to write to Selective Service for a Status Inf ormation Letter. *6* The student can be registered with Selective Service as early as 30 days before his 18th birthday; if the student is too young Selective Service will hold the registration under the student is within 30 days of his 18th birthday. Students 26 and older can not be registered. *7* However, if the student is claiming that he is in compliance with the registration requirements (i.e., that he is registered or is exempt from registration), the denial of aid by the school can be appealed to the Department). *8* Students incarcerated by jurisdictions that are defined as a state in the HEA and that have no state government, such as the District of Columbia, are considered incarcerated in a state penal institution and are thus not eligible to receive Federal Pell Grants. |