| DCLPublicationDate: 9/1/94 DCLID: GEN-94-37 AwardYear: 1995-1996 Summary: This Action Letter describes changes to the 1995-96 processing system, the Free Application for Federal Student Aid (FAFSA), the Student Aid Report (SAR), and the Federal Renewal FAFSA. ACTION LETTER #2 September 1994 GEN-94-37 Dear Colleague: This Action Letter describes changes to the 1995-96 processing system, the Free Application for Federal Student Aid (FAFSA), the Student Aid Report (SAR), and the Federal Renewal FAFSA. We are working on the following major improvements: - Eliminate Void output documents - Eliminate Correction Applications - Incorporate Title IV and Guarantee Agency Default Matches into NSLDS - Enhance the data matches - Eliminate loan questions from the FAFSA - Print Federal student aid information numbers on the FAFSA - Revise state release question on the FAFSA Central Processing System (CPS) ELIMINATE VOID OUTPUT DOCUMENTS Students will no longer receive void SARs. In 1995-96, the situations described below will result in two part rejected SARs which will include all reported data. An application with too many problems (therefore requiring too many comments on the SAR), will generate a non-void rejected SAR (reject 20). The SAR will contain comments directing the applicant to make corrections on the SAR and to contact his or her financial aid administrator (FAA) if he or she has questions. An application received at the MDE FAFSA processor that has been signed before January 1, 1995 or after the May 1, 1996 deadline date, will be returned to the applicant unprocessed. The student will receive a letter with an explanation why his or her application was not processed. In the past, a student who did not submit his or her application within the appropriate time frame, received a void SAR, and if the submission was too early, a correction application. A student who submits a second or subsequent application to the same MDE FAFSA processor will no longer receive a void, unofficial output document. The CPS will now process subsequent original applications to the same MDE in the same manner as those sent to a different MDE. That is, the CPS will use information processed from the previous transaction, except for address and institutions listed (if different). A comment and comment code indicating that the transaction is a second/subsequent application will appear on the output document. Two new rejects will be introduced. When an application has incomplete income information and an EFC cannot be calculated by CPS, the student will receive a two-part rejected SAR (reject 3 for renewal applications and reject 2 for original applications). The student will be able to make necessary corrections directly on the SAR and resubmit it for processing. ELIMINATE CORRECTION APPLICATIONS Because all SARs can now be used as correction documents, including rejected SARs, the need for almost all correction applications is eliminated. The Department of Education (ED) will use correction applications only in a very few cases to resolve issues involving applicants with duplicate social security numbers. Therefore, we will not distribute correction applications and institutions will no longer need to order or stock them. INCORPORATE TITLE IV AND GUARANTEE AGENCY DEFAULT MATCHES INTO NSLDS ED will no longer conduct the Title IV and Guarantee Agency Default Matches. Instead we will conduct prescreening for default information with the National Student Loan Data System (NSLDS). Corresponding match flags and comment codes will be provided on SARs and other output documents. See enclosure A (described below) for information on NSLDS match flags and comment codes. ENHANCE THE PRESCREENING DATA MATCHES Sometimes the Selective Service, Social Security Number (SSN), NSLDS, or Immigration and Naturalization Service (INS) data match is not conducted because of technical processing problems. In 1995-96, in an attempt to get definitive match results, CPS will hold the records that were not matched and will re-submit them daily for up to three days for processing. If after three days the match is still not successful, application processing for those records will be completed, despite the match results. Enclosure A, 1995-96 SAR Comment Activity for Matches and Hold Files, is an updated reference to identify all output document comments and match flags resulting from the various eligibility matches, the reason for the comment, and whether institutional action is required. Free Application for Federal Student Aid The Free Application for Federal Student Aid (FAFSA) has some major changes for the 1995-96 award year and several minor changes in structure or language. Enclosure B is a copy of the draft 1995-96 FAFSA. LOAN QUESTIONS ELIMINATED The section formerly titled "Federal Family Education Loan Program Information," which elicited information about the applicant's previous loan history, has been eliminated. This loan information will be available instead through the data-base match that the CPS conducts with the NSLDS. All available details of a student's loan history will appear on the SAR, and other output documents. ASSET INFORMATION PLACED BEFORE SIGNATURES The Asset Information section is placed before the information release and signature section. Because reporting assets is optional for students/parents who meet the Simplified Needs Test (SNT), the asset questions previously appeared at the end of the application. However, this placement caused confusion, resulting in no signatures or not reporting sufficient information. The SNT worksheets are unchanged, and continue to allow students to bypass the asset section if they qualify. REVISED STATE RELEASE QUESTION ON FAFSA In previous years, a student was required to check either "Yes" or "No" in response to question 102 (should CPS release information to the state of residence or state where college choices were located). Students who overlooked the question often missed state deadlines when information was not released in time. Therefore, the 1995-96 FAFSA assumes the student's response is "Yes" unless the student specifically responds "No." WORKSHEET #3 REVISED In 1994-95, we introduced a new worksheet entitled "Title IV Income Exclusions" to collect certain financial items. The Higher Education Amendments of 1992 directs us to exclude these items from the EFC calculation. The worksheet facilitates verification by handling all exclusions within the calculation rather than having the applicant subtract amounts from the AGI. For 1995-96, we have revised the worksheet to better describe which portions of financial aid are taxable. We also determined that proration of taxes paid is not required. FEDERAL STUDENT AID INFORMATION NUMBERS PROVIDED Page 10 of the FAFSA instructions includes the telephone numbers of the toll-free Federal information line where students may obtain assistance in completing the FAFSA and request more information about the Title IV programs. The toll number is also included for students who wish to request duplicate SARs or who need information on whether their application has been processed. Other changes to the FAFSA include: SECTION A: YOU (THE STUDENT). Social security number and date of birth follow directly after the name and address information. SECTION C: YOUR PLANS. Questions about a student's enrollment status, course of study and type of degree, and expected date of completion were reordered to collect the information in a more logical sequence. Summer term 1996 was added to questions 24-28 to accommodate summer enrollment periods that begin prior to July 1. Question 32 asks for "grade level" rather than "year in college." Students' choices on how to respond correspond closely to the grade levels used for the Federal Family Education Loan (FFEL) and Federal Direct Student Loan programs. The one difference between the loan program and the FAFSA grade levels is that the FAFSA allows states to distinguish between a first year student who never attended college and a student who previously attended college but remains at the first-year level. Question 37 is revised to encompass "dependent care" rather than "child care" to reflect that cost of attendance may cover the cost of elder care as well as child care. SECTION D: STUDENT STATUS. Question 42 is revised to ask if the student will be enrolled in "a graduate or professional program (beyond a bachelor's degree) in 1995-96?" Question 44 is revised to allow applicants who were wards of the court until the age of 18 to respond "Yes" to the question. This change was directed in the Higher Education Technical Amendments of 1993. SECTION F: 1994 INCOME, EARNINGS, AND BENEFITS. The section is unchanged except that the former "Title IV Income Exclusions" is now called "1994 Exclusions from Worksheet #3." SECTION G: ASSET INFORMATION. As stated before, this section is placed before the information release and signature section. Applicants are directed to complete the Simplified Needs Test (SNT) worksheets found in the instructions. The application also states that states and colleges may require this information even if asset reporting is not required to apply for Federal aid. SECTION H: RELEASES AND SIGNATURES. The 1995-96 college release block includes a grid to collect the Title IV institution code. The Department of Education will provide the Title IV institution code list to high schools, college financial aid offices, and public libraries. We will make every effort to distribute the Title IV institution code list at the same time as FAFSAs are available. If a student does not know the Title IV institution code for the schools he or she wants to list on the FAFSA and cannot locate a Title IV institution code list, the student may write the complete name and address of a college, and branch campus identification, if necessary. If the names and addresses are legible and complete, the MDE FAFSA processors will look up the appropriate institution codes and transmit them to the CPS for processing. SECTION I: PREPARER'S USE ONLY. There is one change in this section. The Higher Education Technical Amendments of 1993 clarified that a preparer need provide either a social security number or the employer's identification number, but not both. INSTRUCTIONS. The 1995-96 instructions include a notice to citizens of the Federal States of Micronesia, the Marshall Islands, or Palau who do not have SSNs, referring them to the financial aid administrator. These students will be assigned identification numbers that will allow their applications to be processed manually, despite the Social Security Number Match. Student Aid Report The color of the 1995-96 SAR will be yellow. All data elements on the SAR will be ordered and numbered to correspond with data elements on the FAFSA and Renewal FAFSA. As stated previously, the one-part SAR known as a "void SAR" has been eliminated; the student will receive a rejected, two-part SAR rather than a void SAR and a correction application. Because such a student will not receive another application instruction book, the 1995-96 SAR will contain as many codes and additional instructions as possible. Some of these instructions will appear in SAR section headings, some will be in the "Helpful Hints" section, and some will be included in specific comments. Flags for Official/Unofficial and for Last Official Transaction for Unofficials will be eliminated from the FAA Information section. These flags corresponded with void transactions. Several new flags are added to the FAA information section of the SAR for 1995-96. These flags include SNT, MDE record type, FAA adjustment and FAA recalculation. Comment code 40 will also be provided to indicate if the transaction is a second or subsequent application. The back of Part 3 of the SAR (Pell Grant Payment Voucher) has been revised. Item 5 has been modified to provide a mechanism for institutions to indicate the method they are using to calculate awards. Also in item 5, block F "Payment Methodology" was added to reflect the measurements that now "drive" the payment calculations for the Pell Grant Program and to provide accurate information about what a student should receive during the award year. These changes are based on regulatory changes that will be effective in 1995-96. Details about the 1995-96 SAR will be provided in the 1995-96 SAR Guide, which will be updated from 1994-95 and provided to FAAs as an action letter before FAAs receive 1995-96 SARs. Renewal Free Application for Federal Student Aid The paper Renewal FAFSA was introduced in the 1994-95 school year and as of July 29, 1994, approximately 42% of all the applications processed in 1994-95 were paper renewal applications. Information we gained about how students completed this alternative application led to changes in both design and processing of the 1995- 96 renewal application. The new option that allows schools more control over the printing and distribution of renewal applications is detailed in 1995-96 Action Letter #1 (GEN-94-26). The questions on the Renewal FAFSA are identical to those on the regular FAFSA, and appear in the same sequence. The renewal application somewhat resembles Part 2 of the SAR. A draft copy of the 1995-96 Renewal FAFSA is included with this letter as Enclosure C. We preprint some information from the student's previous year application on the 1995-96 form. Students do not have to enter new information for 1995-96 if the information preprinted is still correct. A significant number of students who completed the renewal application in 1994-95 did not release information to any colleges or to their state agency, and did not provide required financial data. To address these problems, we have made several design changes: - Additional space is allowed at the top of page one, so that the most basic instructions are provided on the form itself. - An abbreviated instruction page (page 2) lists all the codes for questions with multiple answer possibilities. This includes IRS tax line references. Complete instructions are also available in the booklet. - The arrowed items that mean a response is required are printed and outlined in bold, to add visual emphasis. The words "Enter correct data" appear next to the arrows pointing to the 1995-96 column. - The college release section is enlarged and redesigned. Students may check "Yes" to release information to a preprinted college and write in a housing code for the preprinted college. Alternatively the student may check "No" and write in a new college and housing status code. - The state release question is revised to make it easier for the student to release his/her information to state agencies. In addition to the design changes, in 1995-96 if an applicant does not release application data to a college, and the following two conditions are also met: 1) only one college is printed from the previous year, and 2) the student reported "yes" to question #36 (Do you plan to attend the same college in 1995-96), CPS will automatically release the application data to the school listed. Other APPLICANTS FROM THE PACIFIC ISLANDS WITHOUT SSNs Procedures for processing applications from students from the Republic of the Marshall Islands, the Federated States of Micronesia and the Republic of Palau who do not have SSNs are basically the same for 1995-96 as 1994-95. These students that do not have SSNs should send their FAFSAs to the following address rather than to the address listed on the FAFSA or on the envelope included with the FAFSA. Federal Student Aid Programs P.O. Box 4057 Iowa City, IA 52243 We request that institutions collect as many of these students' completed FAFSAs as possible and send them to this address in a bundle. The applications received will be assigned a processing identification number in item 8 of the FAFSA and will be submitted to the CPS for regular processing. Please refer to 1994-95 Action Letter #7 (GEN-94-4) for detailed information. Since correction applications will not be used in 1995-96, procedures for these students that included correction applications have been eliminated. In 1995-96, the FAFSA processor will "verify" the assigned SSN in item 8 of all 01 transaction SARs and re-submit them to the CPS. For 01 transaction SARs that were rejected (for any reason), the resulting 02 transaction SAR will still have the reject code, but the SSN will be "verified" for purposes of application processing. The student can then make necessary corrections on the SAR and submit it to the address provided on the SAR for processing. A letter will be provided with the SAR informing the student of the assigned identification number. DEPENDENCY OVERRIDE Financial aid administrators can still conduct dependency overrides (from dependent to independent) on initial applications or on SAR/electronic corrections. In 1995-96, if the student who had the dependency override attends another school, and the second school does not agree that the student should be independent, the second school can undo the dependency override as a correction. To undo the override, the FAA must check the second box (labeled "2") for Dependency Override in the School Use Only box of the SAR. The FAA must also provide the Title IV Institution Number and FAA Signature. This will generate a transaction without the dependency override. This will work only if the transaction already had an override from dependent to independent. A flag value of "N" will be added to Dependency Override in the FAA Information section of the SAR. "N" will indicate that an override has been cancelled. We have attempted to continue to improve and simplify the application delivery system for 1995-96, and thank FAAs who submitted suggestions to us. Please continue to send us your ideas. Sincerely, Leo Kornfeld Deputy Assistant Secretary for Student Financial Assistance Programs Enclosures SAR Comment Activity for Matches and Hold Files Draft 1995-96 FAFSA Draft 1995-96 Renewal FAFSA |