| DCLPublicationDate: 4/1/95 DCLID: GEN-95-21 AwardYear: Summary: Clarification of the methods by which a student may apply for Federal student aid. APRIL 1995 GEN-95-21 SUBJECT: Clarification of the methods by which a student may apply for Federal student aid. PUBLICATION REFERENCE: This information supplements the guidance provided in Part II of the Counselor's Handbook. Dear Colleague: We have been asked whether a student may apply for Federal student assistance under Title IV of the Higher Education Act of 1965, as amended (HEA), using on-line software or diskettes developed by organizations other than the U.S. Department of Education. This question addresses a very important issue which could have significant impact upon the eligibility of students for Federal Title IV student assistance. An institution may not award and disburse any Title IV, HEA program assistance based upon data which is obtained from a student on a form, including an electronic form, which the Secretary does not develop and distribute. Section 483(a)(1) of the HEA specifically states that the Secretary of Education, . . . shall produce, distribute, and process free of charge a common financial reporting form to be used to determine the need and eligibility of a student for financial assistance under parts A, C, D, and E of this title (other than subpart 4 of part A and to determine the need of a student for the purpose of part B of this title. Section 483(a)(2) of the HEA states: The need and eligibility of a student for financial assistance under parts A, C, D, and E of this title (other than under subpart 4 of part A) and the need of a student for the purpose of part B of this title, MAY ONLY BE DETERMINED BY USING THE FORM DEVELOPED BY THE SECRETARY PURSUANT TO PARAGRAPH (1) OF THIS SUBSECTION [emphasis added]. NO STUDENT MAY RECEIVE ASSISTANCE under parts A, C, D, and E of this title (other than under subpart 4 of part A) or have the student's need established for the purpose of part B of this title, EXCEPT BY USE OF THE FORM DEVELOPED BY THE SECRETARY PURSUANT TO THIS SECTION [emphasis added]. While the Secretary currently distributes several versions of the application form to meet a variety of needs, he will continue to review the need for additional versions to enhance the ease with which students may apply for Title IV, HEA program assistance. The Secretary may subsequently develop and distribute additional versions of the approved form. At the present time the Secretary is distributing only the nine following versions of the application form by which a student may apply for and receive Title IV, HEA program assistance: (1) The paper Free Application for Federal Student Aid (FAFSA) produced and distributed either by the Department or by one of the Department's approved multiple data entry (MDE) processors as provided by the HEA. (2) The Correction FAFSA which is distributed by the Department and is used for very limited purposes. (3) The Spanish FAFSA distributed by the Department. (4) The paper Renewal FAFSA sent to an applicant by the Department or by an MDE processor. (5) The Renewal FAFSA printed by an institution using the Department's EDExpress software. (6) The electronic student version of the FAFSA screen distributed to an institution as a part of the Department's EDExpress software. (7) The electronic financial aid administrator version of the FAFSA screen distributed to an institution as a part of the Department's EDExpress software. (8) The electronic student version of the Renewal FAFSA screen distributed to an institution as a part of the Department's EDExpress software. (9) The electronic financial aid administrator version of the Renewal FAFSA screen distributed to an institution as part of the Department's EDExpress software. THERE ARE NO OTHER METHODS BY WHICH STUDENTS MAY LEGALLY APPLY FOR AND RECEIVE FEDERAL STUDENT AID. For example, an institution that awards or disburses Title IV, HEA program funds based on the application developed by the Electronic Loan Management (ELM) Group is in violation of section 483 of the HEA. The ELM Group is a private organization that is marketing a computerized data collection process by which students apply for aid. In such instances, the institution may be liable for up to 100 percent of all such aid disbursed as well as for other potential sanctions. In addition, any organization that processes such applications on behalf of an institution may be considered a third-party servicer and may also be jointly liable. We hope that this clarification is helpful. As partners in our efforts to provide Federal student aid to eligible students, we want to make certain that there is no confusion on this very important issue. If you need any additional information on this topic, please contact Fred Sellers. He may be reached by letter at the U.S. Department of Education, 600 Independence Avenue, S.W., Washington, DC 20202-5447 or by fax at (202) 205-0786. Sincerely, David A. Longanecker |