Maintained for Historical Purposes

This resource is being maintained for historical purposes only and is not currently applicable.

Introduction

AwardYear: 1997-98
SectionNumber: I
SectionTitle: Introduction
PageNumbers: 1-10

I. INTRODUCTION


This guide will assist financial aid administrators (FAAs) in
interpreting student information, whether the information appears in
a Student Aid Report (SAR), which is a paper output document that
is sent to the student; or in an Institutional Student Information
Record (ISIR), which is an electronic report that is sent to the
institution.

The term ISIR refers to all processed student information records that
are sent directly to institutions by the Central Processing System
(CPS). SARs and ISIRs contain the same processed student
information in different formats.

ISIRs may be records sent to an institution through the Electronic
Data Exchange (EDE), the Department's electronic service that
allows institutions to send and receive electronic applications,
corrections, and payment data with the CPS. ISIRs may also be
full-data records on magnetic tape or cartridge that are mailed out on
a schedule by the CPS to institutions participating in the Applicant
Data Service. 1997-98 Action Letter #3 (GEN-96-19) provided a
draft ISIR layout for institutions and state agencies, and 1997-98
Action Letter #4 (GEN-96-20) provided participation agreements for
both EDE and the Applicant Data Service. The complete Technical
Reference, which includes the most updated ISIR record layout, is
completed and will be mailed out soon. Please note that since the
1996-97 processing cycle, institutions and state agencies may receive
ISIRs either through EDE or through the Applicant Data Service, but
not through both.

This Guide to 1997-98 SARs and ISIRs explains codes and flags that
appear as FAA information on the SAR and ISIR. Each code and
flag described in the guide--rejects, database matches, comment
codes, and so forth--has the same meaning whether it appears on a
SAR or an ISIR. The format for presenting the codes may vary
slightly for each type of output.


1997-98 MAJOR DELIVERY SYSTEM CHANGES

FAFSA Express. This software allows a student to enter application
data using a computer with a modem, and transmit the completed
FAFSA data directly to the CPS using an 800 number. The FAFSA
Express software was first distributed in October 1995, and we
continue to enhance the program in each successive year. FAFSA
Express can be used at locations that request it, such as high schools,
colleges, Educational Opportunity Centers (EOCs), or public
libraries. Students can also request FAFSA Express by calling
1-800-801-0576 or can download the software from the Department's
Web page at:

http://www.ed.gov/offices/OPE/index.html

Complete FAFSA instructions are available as on-line help, and the
software contains internal edits that prevent common errors and
avoid rejection of the student's data. After completing the
application, the student prints a Signature/Certification page, signs,
has a parent sign if appropriate, and mails the page to a FAFSA
Processor to complete the application process. See 1997-98 Action
Letter #5 (GEN-96-22) for updated information about FAFSA
Express. The 1997-98 version of the software will be available in
December 1996.

When a student transmits a FAFSA Express application but does not
mail in a signed Signature/Certification page, the CPS processes the
record but sends the student a two-part SAR with Reject 16 to
indicate the student has not signed the application. Note that
beginning in 1997-98, schools listed on the FAFSA Express
application and state agencies will receive ISIRs with Reject 16.

Certifications. A SAR with Reject 16 instructs the student to sign
Part 2 (a parent must also sign if the student is dependent) and return
the SAR to the FAFSA processor. Part 2 of this type of SAR
includes the Statement of Educational Purpose and the Certification
Statement on Overpayments and Defaults, since the student did not
sign these statements on the Signature Page.

Additional enhancements that were made to the FAFSA Express
program are detailed in 1997-98 Action Letter #5 (GEN-96-22).


Redesigned SAR

The Student Aid Report (Part 2) was redesigned in 1997-98 to
facilitate imaging and scanning. The mockup included at the end of
this Action Letter shows the new format. Specifics of the formats
of Part 1 and Part 2 will be discussed later.

The SAR Information Acknowledgement has not changed in
format. As in 1996-97, the SAR Information Acknowledgement
can be used like any two-part SAR or ISIR for purposes of
awarding student aid. If students need to correct data appearing on
the SAR Information Acknowledgement, the corrections can be
transmitted electronically by an institution. Alternatively, the
student may request a duplicate of that record (always a two-part
SAR) and send corrections through the paper system.

Examples of the 1997-98 SAR and the 1997-98 SAR Information
Acknowledgement appear in Appendix F of this guide.

New Reject for Invalid Date of Birth

We added one new reject in the Central Processing System for
situations in which the student reported a date of birth that was
equal to the current year. Because the National Student Loan Data
System (NSLDS) and the Social Security Administration must have
a correct date of birth to conduct the database matches, we decided
it was necessary to require that the student correct this situation.
This will be Reject 4.

Social Security Administration (SSA) Match

We revised the current Reject S to Reject 18, which is a
nonverifiable reject. (See Appendix A for more information on
reject reasons and codes.) The reject applies only in situations
when the reported Social Security Number does not exist in the
SSA database. If the SSN reported does belong to the student, then
the student needs to follow up with SSA to ensure that the SSA
database is updated with correct information. Then the student can
submit the SSN again as a SAR or ISIR correction, and the CPS will
match again with SSA. To have the database updated, the student
must contact a Social Security Administration office. The SSA has
indicated that their database is updated on a daily basis with
information received from local and regional offices.

If a student receives Reject 18 and realizes that the reported SSN
was incorrect, the student may submit a SAR, or electronic
correction via the school, to have the new (current) SSN matched
again with the SSA and eliminate the reject. Comment 24 advises
the student to correct item 8, but a financial aid administrator should
keep in mind that in this situation, the original identifiers for the
student (the original SSN and first two letters of the student's last
name) will not change in the CPS.

Assume Citizenship, if Confirmed by SSA

We have made another change to the 1997-98 delivery system
associated with the SSN match. If a student leaves the citizenship
question blank on the FAFSA (question 15), but the SSA confirms
that the student U.S. citizen, we will not reject the record for blank
citizenship (Reject 17). The CPS makes this assumption only when
the SSA match flag is "4," indicating a "complete" match, which
means the student's SSN, name, date of birth, and U.S. citizenship
were all confirmed.

SSA Re-Match for Corrections

Beginning in 1997-98, we will send a student's record for a new
match with SSA if the student makes corrections to the SSN, the
first or last name, or the date of birth. A new match flag will be
generated and reported in the FAA Information section. Once
confirmation of all the SSA match elements has been obtained
(i.e., SSN, name, and date of birth all match and U.S. citizenship is
confirmed), the SSN Match Flag and SSA Citizenship Flag will be
carried forward to the student's 1998-99 Renewal Application, and
the SSA match will not have to be performed each year that the
student applies for aid. If a student whose match data have been
confirmed subsequently attempts to change his or her SSN, the
system does not accept the change and generates a comment
(comment code #13) advising the student to contact the financial
aid administrator for assistance.

When SSA and INS Flags Conflict

Previously, if a student's record was sent to the INS match, the
match results would be provided along with any match results from
the SSA citizenship match. The SSA does not automatically update
its database information when a person becomes a naturalized
citizen, and it is up to the student to update his or her citizenship
information in the SSA database. Therefore, conflicting match
flags between INS and SSA may exist. However, in 1997-98, we
will suppress the SSA match flag for INS match records.

SSA Match Results on Correction Transactions

Finally, in 1997-98, we will provide the SSA match results as well
as the associated comments and comment codes on all transactions.
In 1996-97, the comments and flags appeared on the first
transaction but did not carry forward on subsequent transactions.
This change will ensure that FAAs are aware of the complete results
of the match on any transaction.

Edit for Worksheet #3 Income

During the 1996-97 school year, we revised the way that the system
edits the data reported in FAFSA questions 64 and 76 (the amounts
from Worksheet #3 on page 12 of the FAFSA instruction book).
These amounts represent taxable portions of grants and
scholarships, work-study income, educational and living allowances
paid under the National Community Service and Trust Act, and
amounts paid as child support, all of which are excluded from the
EFC calculation. At the beginning of the 1996-97 school year, the
CPS made an assumption that when the amount reported as
Worksheet #3 income was equal to, or greater than, the student's or
parent's total income (AGI plus earned income plus untaxed
income) the amount was incorrect and the CPS set that amount to
"zero." In many cases, this edit worked as it was supposed to
work and correctly targeted data that was misreported.

However, in certain situations, the entire income earned by some
students, particularly independent students, was derived from
college work-study and the amount reported on Worksheet #3 was,
in fact, equal to their total income. During the 1996-97 cycle, we
revised the CPS edit that is performed on initial submissions to
allow a student to verify the amount in questions 64 and/or 76 by
re-reporting the same amount when submitting a correction. If the
amount reported was equal to or less than the total income, the CPS
would not assume zero on the corrected transaction.

For 1997-98, the edit for Worksheet #3 will remain the same as the
revised 1996-97 edit for students. However, for parents' income,
the CPS will assume "zero" on the first transaction if the amount
reported in question 76 is greater than 90% of the parents' total
reported income in FAFSA Section F. The assumption for question
76 will also be suppressed if the amount is verified as equal to or
less than total income.

New Edits for Earned Income Credit

In 1996-97, we moved the "Earned Income Credit" from the
untaxed income worksheet in the instruction book (Worksheet #2)
to the form itself, as new questions 59 and 71. Analysis of
1996-97 data reported in these fields indicated that the amounts
reported on the FAFSA reflected amounts of earned income credit
that were not consistent with family size and income. The CPS will
perform several edits in 1997-98 to compare the earned income
credit reported with family size and income level. If these items
appear inconsistent, we will highlight the data and provide comments
to the student regarding the inconsistencies (SAR/ISIR comments
166-169 and 176-179).

NSLDS Financial Aid History

For 1997-98, we have added several new flags to provide more detail
about the results of matching a student's record with the National
Student Loan Data System (NSLDS). The new NSLDS Financial
Aid History page mockup (see Appendix C and F) shows the type
and extent of information that will be provided when data from the
NSLDS is passed through for a student's SAR and ISIR.

Information at the top of the Financial Aid History page indicates
whether the student has an overpayment, a defaulted loan, or an
active bankruptcy. The CPS will print either "Y" or "N" as an
indicator, rather than printing only the "Y." Previously a "blank"
meant that an overpayment, default, or bankruptcy did not exist.

The "Aggregate Amount" shown for FFELP/Direct Loans has been
expanded to indicate the "Amount Pending Disbursement," which is
defined as the loan amount minus the outstanding loan balance,
minus any amount cancelled, if applicable.

The Perkins Loan amounts reported will be cumulative amounts
only, and no longer report whether loans were disbursed prior to
1987.

In the next section, up to six of the student's most recent
FFELP/Direct loans will be reported, and if more loans exist in
NSLDS, this section will include a message stating "Access NSLDS
for additional loan records."

The last section reports up to six defaulted loans, and again a
message will appear to "Access NSLDS for more records" if these
exist.

The columns for the "most recent loans" and the "defaulted loans"
now give identical information for each loan that is shown, i.e.,
amount, begin date, end date, GA code, school code, and region
code. The column previously headed "Servicer Code" is now headed
"Current Holder" and will provide either the servicer code or the
lender code, depending upon the type of loan.

New NSLDS Match Flag

In 1997-98, one new flag has been added for the NSLDS Match.
This is a match flag of "7," signifying that the student's SSN was
found in NSLDS but either the name or the date of birth did not
match. Because the student's identity was not reliably confirmed, the
NSLDS data will not be passed to the CPS. This match flag will
trigger a "C" flag and comment 138 on the SAR and ISIR, and
resolution is required.

NSLDS Results Flag

Four flags that give specific details about the results of the NSLDS
match will appear in the FAA Information sections on the SAR, the
SAR Information Acknowledgement, and the hardcopy ISIR in
1997-98. These flags are not new, but previously appeared only in
the ISIR record layout and not on the output documents.

The results flags are as follows:

A flag of "1" means that the reported SSN was matched and
confirmed with the NSLDS; NSLDS data were sent to the CPS and
will appear on the SAR and ISIR. Schools are responsible for using
this information when determining eligibility for Title IV aid.

A flag of "2" means that the student's SSN was found in the NSLDS
but the match could not be confirmed using either the name or date
of birth. This result will generate comment code #138, informing the
student and school that the problem must be resolved before Title IV
aid can be paid. See Dear Colleague Letter (GEN-96-13) Q&A #26
for further discussion of this issue.

A flag of "3" means that the reported SSN was not found in the
NSLDS; a school can assume that the student had not received any
previous Title IV loans or Pell Grant funds unless the school is aware
of conflicting information.

A flag of "4" means that the reported SSN was found and confirmed
in the NSLDS, but there were no relevant data to return to the CPS.
For example, the only data in the NSLDS were a prior year's Pell
disbursement or one or more loans that had been fully repaid or
discharged.

The chart in Appendix B shows the relationship of these results flags
with the NSLDS match flags, and provides information if resolution
is required.

NSLDS Transaction Number

For 1997-98, we added a new flag to help financial aid
administrators identify when something has changed in a student's
NSLDS financial aid history, and should be reviewed. For example,
on the first CPS transaction (01), the NSLDS transaction number will
be "01." When a CPS 02 transaction is processed, the record is
matched again with NSLDS. If the NSLDS information for that
student is unchanged, the NSLDS transaction number will continue
to be reported as "01." If a further transaction is processed and a
CPS 03 transaction created, current NSLDS information is compared
with the previous transaction. If these data are different than the data
reported on the earlier transaction, the NSLDS transaction number
will be set to "03."

The value reported as the NSLDS transaction number will enable the
FAA to determine if NSLDS data on a subsequent transaction needs
to be reviewed. In the example above, if the NSLDS data from CPS
transaction 01 had been reviewed and used, the FAA would not need
to review NSLDS data on the second transaction because the NSLDS
transaction number of "01" indicated nothing had changed. The
FAA would need to review NSLDS data on the 03 transaction
because the NSLDS transaction number of "03" indicated that data
had changed from the earlier transactions.

If a student or school requests a duplicate SAR or ISIR, the request is
also sent to the NSLDS for matching. If the NSLDS data have not
changed, the record will be processed as a duplicate with the same
CPS and NSLDS transaction numbers. However, if the NSLDS data
are different, the record will be processed as a system-generated
correction (Sys Gen = L), and both the SAR/ISIR transaction number
and the NSLDS transaction number will be incremented.

Transaction Receipt Date

In 1997-98, we will display the date that a document or electronic
transmission is received by a FAFSA processor or the CPS. The
input record may be a paper application or SAR or an electronic
transmission through EDExpress or FAFSA Express. This
transaction receipt date will appear in addition to the "Application
Receipt Date," which displays the date that the first application was
received. The Transaction Receipt Date will change for each
transaction, but the Application Receipt Date will remain constant.

Reprocessing Reason Code

To help FAAs track student records that may require reprocessing
during 1997-98, we added a two-digit numeric code in the FAA
Information to provide more specific information about system-
generated records. If a subset of student records requires
reprocessing, for example, because there are changes in the formula
or maximum Pell Grant EFC, or problems with NSLDS data, the
Reprocessing Code will appear on the reprocessed records along
with the System Generated (Sys Gen = Z) code that identifies a
reprocessed batch. This code will be numeric and will be assigned
and incremented with each reprocessing. The definition for a code
will be available from customer service and announced on the
Student Financial Assistance Bulletin Board Service (SFA BBS).


PROCESSING FLOW

The flow of information through the system remains the same in
1997-98 as in 1996-97.

The student starts the process by filling out a financial aid
application, and this information is "processed" through the system
and returned to the student and institution. The application input
can be one of five kinds: the paper Free Application for Federal
Student Aid (FAFSA), the paper Renewal FAFSA, the electronic
FAFSA through EDExpress, the electronic Renewal FAFSA
through EDExpress, or FAFSA Express.

The flow chart on the following page shows how information about a
financial aid applicant flows through the system. The major
participants and documents in the application process are:

1) THE U.S. DEPARTMENT OF EDUCATION (ED).

2) THE STUDENT. He or she may apply for federal student aid
under the Title IV programs Federal Pell Grant and Federal SEOG
programs, Federal Work-Study, Federal Perkins Loans, the Federal
Family Education Loan Program, and the William D. Ford Federal
Direct Loan Program.

3) THE APPLICATIONS. The Free Application for Federal
Student Aid (FAFSA), the Renewal Application, FAFSA Express, or
the electronic application or renewal application that the student
must complete and submit in order to apply for federal student aid.

4) THE FAFSA PROCESSORS. Two organizations will serve as
data entry processors for the 1997-98 school year under contract with
ED. The FAFSA processors receive applications in the mail,
perform document analysis to check that signatures are present and
dates are acceptable, and handle missing or unacceptable responses.
The processors enter the information from the application and
transmit it electronically to the CPS.

5) THE CENTRAL PROCESSING SYSTEM (CPS). The CPS
operates under a contract with ED to receive and process application
information. The CPS matches student records with other data bases
to check eligibility. The CPS also applies a series of "compute edits"
to the application information to check for inconsistencies,
contradictions, and missing information. During the compute
process, the CPS uses the need-analysis formula specified in the
Higher Education Act of 1965, as amended, to calculate each
applicant's expected family contribution (EFC).

6) THE STUDENT AID REPORT (SAR) and the SAR Information
Acknowledgement. These documents provide the student with
processed application information. The CPS prints SARs and mails
them directly to the address the student provided.

7) THE INSTITUTIONAL STUDENT INFORMATION RECORD
(ISIR). ISIRs are produced by the CPS and provide the institution
with processed application information. ISIRs may be transmitted
electronically to destination points (schools and servicers) through
EDE daily, or they may be sent out on magnetic tape or cartridge via
the Applicant Data Service, up to 40 times each processing cycle.

8) THE SCHOOL. The school refers to every postsecondary
educational institution that the student listed on the financial aid
application. The financial aid administrator (FAA) at the school
will use the processed information from the SAR or ISIR to
determine what federal aid the student is eligible to receive. Schools
and states may also use information from the SAR or ISIR to award
their own financial aid.

[[The chart "Flow Chart of 1997-98 Federal Application Processing
System" on page 7 is currently unavailable for viewing on the SFA
BBS. Please reference your paper document or download the pdf
files for additional information.]]


TRANSACTIONS

A "transaction" is an interaction between the processing system and
the financial aid applicant, or the school acting on behalf of the
applicant, that changes any of the data on the applicant's record.
Each transaction results in a new SAR or ISIR, and is identified by
transaction number (i.e., 01, 02, 03). A transaction may sometimes
be "system-generated." For example, when an applicant is released
from a "hold" file, the CPS will automatically reprocess the
application information and generate a new transaction without
additional input from the student or from a school. However, the
transactions discussed here will be student and system, or school and
system, interactions.

When application data first enter the CPS and are processed, the
report that results is called the "01" transaction. The student receives
a SAR and the listed schools receive ISIRs if the schools participate
in EDE. If corrections are necessary, the student makes these
changes on Part 2 of the SAR, returns the SAR to the FAFSA
Processor, and the information is reprocessed. Alternatively, a
school can enter corrections electronically through EDExpress, even
if the school did not submit the original application electronically.
The corrections generate a new record that is identified as an "02"
transaction. This second type of transaction is called a "correction,"
although the term also is used to refer to students' updating
information.

To make a correction transaction, the student changes at least one
data element. The change can be anything, even an address
correction or the addition of extra colleges. The first correction is
labeled "02," and subsequent corrections are labeled "03," "04," and
so forth. Identifying the correct transaction is important when
reporting Pell Grant payments and when requesting duplicate SARs
or ISIRs. A duplicate will always be generated from the most recent
transaction unless another, earlier transaction is specified.

For 1997-98, the maximum number of transactions that an applicant
may have is 40; when a student has corrected or updated information
more than 20 times, the student will receive SAR comment 106,
advising him or her to seek assistance from the financial aid
administrator.

TWO-PART SARs

Part 1 of the SAR is an Information Summary that contains
information for both the student and the FAA. Part 1 summarizes
all the information reported by the student on the FAFSA plus the
results of processing the information.

Part 2 of the SAR is used by the student to make corrections to
application data. Corrections can also be entered electronically by
the school. Part 2 of the SAR may be an Information Review Form
(IRVF), which reports FAFSA information for the student to review
and correct, if necessary. Part 2 of a rejected SAR is called the
Information Request Form (IRQF). For this type of SAR, an EFC
could not be calculated and the student is required to make
corrections.

The SAR Information Acknowledgement has only one part and
resembles Part 1 of a two-part SAR, although the FAA Information
and the student's comments vary somewhat.

Subdividing SARs into major types may help in understanding
references to "an eligible SAR," an "ineligible SAR," or a "rejected
SAR." The term "eligible" describes a SAR for an applicant whose
EFC and undergraduate status indicate eligibility for a Pell Grant.
The term "ineligible" describes a SAR for an applicant whose post-
baccalaureate status or high EFC makes him ineligible for a Pell
Grant.

The term "rejected" describes a SAR that does not have a calculated
EFC.

SAR Type Student
receives:

Pell-Eligible EFC is 2500* Part 1, Part 2
or less, and applicant is not (IRVF)
a graduate student and does not
have a bachelor's degree

Pell-Ineligible EFC is greater Part 1, Part 2
than 2500*; or applicant (IRVF)
has a bachelor's degree or will
be enrolled in a graduate or
professional program

Rejected Reject reason 19, Part 1, Part 2
no EFC is calculated (applicant (IRVF)
is in an ED hold file)

Rejected no EFC is Part 1, Part 2
calculated (all reject (IRQF)
reasons except 19)

Rejected Reject reason 16, Part 1, Part 2
no EFC is calculated (IRQF and
(FAFSA Express application, certification
processed without signatures) statements)

* Maximum EFC for 1997-98


HIGHLIGHTS AND ASSUMPTIONS

PAPER SYSTEM. Instructions to the student for making SAR
corrections refer to "information printed in boldface type" that is to
be reviewed carefully or that must be corrected. We refer to this
information as "highlighted." Both the student and FAA need to pay
careful attention to questions and responses that are highlighted.

During the edit process, the CPS applies logic in comparing two or
more pieces of information provided by the student. The CPS
highlights information that is conflicting, missing, or contradictory.
Items that are questioned are highlighted on Part 2 of the SAR. In
certain instances the application is rejected because of a conflict--for
example, the student answered that he or she is not married but
provides financial information for a spouse. The CPS will reject this
application (Reject 11) and print the questioned items in boldface
type on Part 2 of the SAR. The CPS will not calculate an EFC,
because key financial information is conflicting.

In other situations, the CPS makes an "assumption" and does not
reject the student's record. For example, a student reports that
he/she is married and provides spouse's income, but reports only
one person in the household. In this case, the CPS assumes there
are two persons in the household, highlights both questions and
responses on the SAR, and calculates an EFC if the record is not
rejected for other reasons. Both the reported and the assumed
values are printed, with the word "ASSUMED" in parentheses next
to the assumed response.

Assumptions are most often made by the system when questions are
left blank, although in the assumption made for Worksheet #3
income discussed earlier in this section, the system assumed that a
reported income amount should be "zero." Once an answer is
assumed, the assumed information is used throughout all the
subsequent edits and in the EFC calculation.

If the CPS makes an assumption but then rejects the record for other
reasons, an EFC is not calculated and the assumed values are not
used. In this situation, the student receives an IRQF (Information
Request Form) as Part 2 of the SAR, with arrows and brackets
printed next to the questionable line items. The student is required
to correct them.

ELECTRONIC SYSTEM. In the electronic system, certain edits are
contained in the EDExpress software. These edits prompt the FAA
who is entering application data to resolve inconsistencies before
sending the student's information to the CPS. When inconsistencies
or missing data would cause the record to be rejected at the CPS, the
software does not allow the record to be saved or completed until
information is changed or added.

When electronic application data trigger a CPS edit that results in a
highlight, the ISIR indicates the highlight by setting an "H" next to
the item.

The EDExpress software allows an FAA to override certain
assumptions that would be made at the CPS. When an FAA sets an
override code on an electronic application, the CPS accepts the
data as reported and does not make an assumption about that item.
For example, if a student indicates more than two family members
are attending college, and also indicates the same number of persons
live in the household (e.g., four in the household and four in college),
the CPS would assume "one" person in college during processing.
If, in fact, there are four family members attending college, the FAA
can eliminate the need for a second transaction by setting the
appropriate override flag in the EDExpress software.

The electronic system also allows the FAA to override "verifiable
rejects" by setting a reject override flag in EDExpress before
transmitting the student's application. For example, a student may
have an unusually large number of family members. If the FAA sets
the appropriate override flag before sending the student's record for
processing, the student's record will not be rejected. Overall, less
than 1% of electronic applications and renewal applications are
rejected, as compared with the paper application process where
approximately 12% of the applications are rejected.



[[This file contains pages 1 - 10 in Portable Document Format (PDF). It can be
viewed with version 3.0 or greater of the free Adobe Acrobat Reader software.]]