Summary: This Action Letter describes changes to the 1996-97 application processing system, the Free Application for Federal Student Aid (FAFSA), the Renewal FAFSA, the Student Aid Report (SAR), and the Institutional Student Information Record (ISIR).
Action Letter #6
This Action Letter describes changes to the 1996-97 application
processing system, the Free Application for Federal Student Aid
(FAFSA), the Renewal FAFSA, the Student Aid Report (SAR), and
the Institutional Student Information Record (ISIR). These are the
major improvements that we have made:
- Change deadline dates for filing original applications and
- Add Statement of Educational Purpose and Statement on
Overpayments and Defaults to the FAFSA and Renewal FAFSA
- Eliminate Statement of Selective Service Registration from the
SAR and ISIR
- Eliminate paper Pell Grant Payment Voucher
- Send SAR Information Acknowledgment to students who apply
- Begin new Citizenship Match
- Revise National Student Loan Data System (NSLDS) Information
- Enhance FAA Information on SARs and ISIRs
- Eliminate Overpayment Hold File
1996-97 NEW CONTRACT AWARDS
The Central Processing System (CPS) contract was awarded to
National Computer Systems (NCS) in Iowa City, Iowa. In 1996-97,
the CPS will print all SARs and Renewal Applications, in addition to
processing application data. Data entry contracts were awarded to
American College Testing (ACT) in Iowa City, Iowa and I-NET in
Bethesda, Maryland. These two FAFSA processors will receive
FAFSAs, Renewal Applications, and paper SAR corrections, and
will enter the data for electronic transmission to the CPS.
FAFSAs that have an ACT return address will be distributed
primarily to institutions located in the eastern United States and
Iowa, while applications with an I-NET return address will be
distributed to institutions in western states. The assignment of
addresses to a particular processor will have no impact on data
processing. Each processor will accept and process any FAFSA,
Renewal FAFSA or SAR, so schools and students need not be
concerned about which address they use to submit applications or
NEW DEADLINE DATES
Some deadline dates in the 1996-97 delivery system have been
changed. The new dates are as follows:
All applications (FAFSA, Renewal FAFSA, EDExpress,
FAFSA Express) received at the processor site
June 30, 1997
SAR/ISIR corrections and duplicate requests
received at the processor site
August 15, 1997
Valid SAR/ISIR received at institution
August 29, 1997
August 29, 1997
Final submission of payment information to ED
September 30, 1997
FREE APPLICATION FOR FEDERAL STUDENT AID
The Free Application for Federal Student Aid (FAFSA) has only a
few major changes for the 1996-97 school year, several of which
were requested by financial aid administrators. A draft of the 1996-
97 FAFSA is attached.
ADD EARNED INCOME CREDIT
Because Earned Income Credit often goes unreported, we have
moved the item from Worksheet #2 to become a separate line of
untaxed income on the FAFSA. This adds two questions to the form,
questions 59 and 71, to collect student/spouse and parents' earned
CHANGE APPLICATION DEADLINE
The deadline for accepting applications for the 1996-97 award year
has been changed to June 30, 1997 instead of the May 1st deadline
date that has been customary in previous years. This change will
assist in awarding aid for summer terms and for other periods that
cross award years.
ADD CERTIFICATION STATEMENTS
Two certification statements that students are required to sign have
been added to the FAFSA and eliminated from Part 1 of the SAR:
the Statement of Educational Purpose and the Certification Statement
on Overpayments and Defaults. The Department has determined that
both statements can be signed as part of the application process (see
the Notice of Proposed Rulemaking published September 21, 1995).
The change relieves institutions from the obligation of collecting and
retaining these statements.
A policy change regarding veterans' status went into effect during the
1995-96 school year and is reflected in the instructions for question
41 on the 1996-97 FAFSA. A student who enrolls in a service
academy, but who withdraws before graduating, is considered a
veteran for purposes of determining dependency status.
OTHER CHANGES TO THE FAFSA
The color of the FAFSA is pink. The format is changed to facilitate
data entry and imaging. Students are asked to fill in ovals, using
black ink or a dark pencil, rather than checking boxes for "Yes" and
"No" responses. Each financial field is defined according to the
maximum length of field that the CPS will accept.
Two question titles are changed: "Exclusions from Worksheet #3" is
changed to "1995 Total from Worksheet #3" to improve the quality
of data reported in this item. On Worksheet #3, note that exclusions
under the National and Community Service Trust Act of 1993
include not only living allowances but also educational benefits.
"Farm Value and Farm Debt" are now titled "Investment Farm Value
and Investment Farm Debt." Some minor enhancements are added to
the instructions for purposes of clarity.
RENEWAL FREE APPLICATION FOR FEDERAL STUDENT
The Renewal FAFSA contains the same changes as the FAFSA and
also has a slightly different format for data entry purposes. Paper
Renewal FAFSAs printed and mailed by the CPS will be on white
paper, 11 by 17 inches. Please see 1996-97 Action Letter #1 (GEN-
95-45) dated October 1995 for schedules for mailing Renewal
FAFSAs and other important changes to the Renewal Application
process. A draft of the Renewal Application mockup is attached.
STUDENT AID REPORT
ELIMINATE THE PAPER PAYMENT VOUCHER
The major change for the 1996-97 Student Aid Report is elimination
of the paper Pell Grant Payment Voucher (Part 3). To report Pell
Grant payment information in 1996-97, all institutions must use
either the Electronic Data Exchange (EDE), the Recipient Data
Exchange (RDE), or the Floppy Disk Data Exchange.
REMOVE CERTIFICATION STATEMENTS
Certification statements will no longer be printed on Part 1 of the
SAR since these are now collected on the FAFSA or Renewal
FAFSA. Only SARs that have a Reject 16 will contain the Statement
of Educational Purpose and the Statement on Overpayments and
Defaults on Part 2, next to the student signature block. Reject 16
records are those produced when a student submits an electronic
FAFSA Express application but does not print and mail in a
Signature Page. See 1995-96 Action Letter #12 (GEN-95-41) dated
August 1995 for more information on FAFSA Express. The
Statement of Registration Status is not printed on either the FAFSA
or the SAR.
Verification worksheets will no longer be mailed with SARs.
Attached are verification worksheets (Dependent and Independent)
that schools may copy and use if they wish. Worksheets can also be
printed and customized using the EDExpress software and, as in the
past, schools may create and customize their own verification forms.
SCHOOL USE BOX
The School Use Box on Part 2 of the SAR has been streamlined.
Schools will no longer be required to report a recalculated EFC when
corrections are made to a student's data or a professional judgment
adjustment is requested. In both situations, the CPS calculates an
official EFC that is used for awarding aid. The School Use Box will
only be used by a financial aid administrator to report professional
judgment: one check-off box indicates that a dependency override
has been performed or canceled, and another check-off box indicates
that a data element has been adjusted using professional judgment.
The aid administrator MUST indicate the action that was taken, enter
the institution's Title IV School Code, and sign in the box.
SAR INFORMATION ACKNOWLEDGMENT
A new, non-correctable SAR Information Acknowledgment will be
sent by the CPS to students who transmit electronic applications or
corrections through their institutions. This SAR is composed of Part
1 only and allows the student to review the processed information
and results. Institutions that transmit applications or corrections to
the CPS electronically are no longer required to provide ISIRs to
these students for review.
Please note that the SAR Information Acknowledgment may NOT be
used to submit corrected data. If corrections are needed, they must
be made through EDExpress or a duplicate SAR can be requested
and used for a paper correction. A valid SAR Information
Acknowledgment establishes a student's eligibility just like any other
valid SAR or ISIR and can be used by institutions to award student
OTHER SAR CHANGES
The color of the SAR will be pink. The formats of Part 1 and Part 2
of the SAR, and the format and position of the FAA Information
Box, have not changed from the 1995-96 format (see attachments for
a mockup of the 1996-97 SAR and SAR Information
CENTRAL PROCESSING SYSTEM (CPS)
BEGIN NEW CITIZENSHIP MATCH
In 1996-97, the SSN Match with the Social Security Administration
(SSA) will be expanded to compare U.S. citizenship status reported
by the student with SSA database information. The results of that
match appear in the FAA Information Box on all output documents.
If the SSA does not confirm a student's claim of U.S. citizenship, a
new comment #146 will be present and the SAR "C" flag will be set.
The student will be required to provide documentation to the
institution to confirm current U.S. citizenship status. Once
documentation of citizenship has been provided, the school may
award aid to the student. However, if the student needs to correct his
or her citizenship status to "eligible noncitizen," he or she must
submit a correction through the normal SAR or EDExpress process
and provide an alien registration number. The CPS will process the
correction and conduct a match with the Immigration and
Naturalization Service (INS). (See Federal Register, September 21,
REVISE NSLDS INFORMATION SUMMARY
The NSLDS Information Summary page of the SAR and the
corresponding data on the ISIR is revised to provide most of a
student's financial aid history. The financial aid history will provide
information on overpayments of grants and loans and defaulted
loans, as well as information about the student's most recent loans
and aggregate loan amounts for all applicable loan programs.
The NSLDS summary will be produced only for students whose
financial aid information is found in the database, not for every SAR
or ISIR. If the NSLDS match is completed but no student data are
present, a new comment #140 will be generated. The school can
thus assume that the student has no financial aid history. If the
match is partial--that is, if a student's SSN matches a record in the
NSLDS database, but the student's name does NOT match--a new
comment 138 will be generated. In this situation, the loan history in
the database will not appear on the student's SAR or ISIR
(identification was not complete), but the comment will alert the aid
administrator that some financial aid history is associated with that
student's SSN. Additional information about the use of NSLDS for
financial aid history purposes will be provided in a subsequent
ENHANCE FAA INFORMATION
To assist institutions in identifying whether or not students are
eligible for a Federal Pell Grant, the FAA Information Box on the
SAR and ISIR will contain a Pell Eligible Flag. A "Y" in this
location indicates that a student may be eligible for a Pell Grant, and
"Blank" indicates the student is not eligible for a Pell Grant.
Students are not eligible for Pell Grants if any of three conditions
apply: their EFCs are above the maximum EFC established for 1996-
97 (as of this date, the maximum EFC for 1996-97 is 2100), or they
have answered "Yes" to question 19 and/or to question 42 on their
applications, indicating that either they have received bachelor's
degrees and/or are graduate/professional students. These students'
records will NOT be sent to the database of Pell-eligible applicants,
the Pell-eligible flag will be blank, and any request for payment of
Pell Grants to these students will be rejected. If the responses
regarding bachelor's degree and graduate/professional status are
incorrect, they must be corrected using the normal process for
A new flag for "Subsequent Application" identifies a SAR or ISIR
that was produced from a second application using the same SSN
and name as used before (the subsequent application may refer to an
original or renewal application, or a combination of both). As in
1995-96, we will produce a new transaction for a subsequent
application, but it will contain the information submitted in the
previous application, except for address and institution choices, if
these are different.
FAA Information also includes the new SSA Citizenship Code. (A
table showing all match flags and associated SAR comment codes is
attached.) An Early Admission flag is added to identify students
who are applying in 1996-97 for early admission for the 1997-98
school year. The early admission designation is available only for
applications submitted through the FAFSA Express software.
On the paper SAR and SAR Information Acknowlegment only,
another new code in the FAA Information section is the "Pell Digit"
(formerly used on the Payment Voucher) to assist in processing Pell
Grant payment data.
ELIMINATE OVERPAYMENT HOLD FILE
Records that were in the overpayment hold file have been transferred
to NSLDS. Therefore, a separate overpayment hold file is no longer
The procedures for Correction Applications remain the same as for
1995-96. The Department uses Correction Applications in only a
very few cases to resolve issues involving applicants with duplicate
social security numbers. A financial aid administrator may contact
the Correction Application Coordinator at (202) 260-9988.
APPLICANTS FROM PACIFIC ISLANDS WITHOUT SSNs
Procedures for processing applications from students residing in the
Republic of the Marshall Islands, the Federated States of Micronesia,
and the Republic of Palau who do not have SSNs are the same as
they were for 1995-96. These students should send their FAFSAs to
the following address rather than to the address listed on the FAFSA
or on the return envelope:
Federal Student Aid Programs
P.O. Box 4003
Mt. Vernon, IL 62864-8603
We request that institutions collect as many of these students'
completed FAFSAs as possible and send them to the address in a
bundle. The applications received are assigned an identification
number in item 8 of the FAFSA and will be submitted to the CPS for
regular processing. These applicants are exempt from the SSN
Match with SSA. Although Pacific Island applicants are not able to
use FAFSA Express, an institution can transmit application data for
them electronically using EDExpress.
NEED ANALYSIS SERVICERS (NAS) INFORMATION
To receive the 1996-97 NAS system specifications, need analysis
servicers must enter into an agreement with the Department of
Education and comply with the procedures set forth in that
agreement, as well as with the Higher Education Act of 1965, as
amended, Section 483(a)(2).
New servicers should send the Department a written request for the
agreement. The agreement must be completed and signed in order to
receive the NAS specifications. Once a servicer has signed an
agreement, the agreement will be valid for all subsequent years
unless otherwise notified. Current NAS servicers (i.e., those who
signed an agreement for the 1995-96 award year) will automatically
receive the 1996-97 specifications without having to sign a new
Servicers may expect to receive draft specifications in late
November. The Department will not have completed testing of the
specifications until January 12, 1996. Servicers will receive updates
if needed until that time, and system specifications will not be
distributed after that date. To request a copy of the NAS agreement,
ask for the NAS Coordinator at (202) 260-9988 or fax your request
to (202) 401-1637.
We continue our efforts to improve and simplify the application
processing system and thank everyone who submitted suggestions to
us. Please continue to send us your concerns and comments.
Senior Adviser to the Secretary
1996-97 Renewal Application (mockup)
1996-97 SAR (mockup)
1996-97 SAR Information Acknowledgment (mockup)
Address Change/Duplicate SAR Request Form
1996-97 SAR Comment Activity for Matches and Hold Files