| DCLPublicationDate: 12/1/95 DCLID: GEN-95-54 AwardYear: 1996-1997 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 December 1995 GEN-95-54 Dear Colleague: 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 corrections - 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 electronically - Begin new Citizenship Match - Revise National Student Loan Data System (NSLDS) Information Summary - 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. APPLICATION DISTRIBUTION 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 paper corrections. 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 Verification completed 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 income credit. 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. VETERANS STATUS 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 AID 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 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 aid. 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 Acknowledgment). 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, 1995.) 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 Action Letter. 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 correction errors. 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 necessary. OTHER INFORMATION CORRECTION APPLICATIONS 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 agreement. 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. Sincerely, Leo Kornfeld Senior Adviser to the Secretary Attachments 1996-97 FAFSA 1996-97 Renewal Application (mockup) 1996-97 SAR (mockup) 1996-97 SAR Information Acknowledgment (mockup) Verification Worksheets Address Change/Duplicate SAR Request Form 1996-97 SAR Comment Activity for Matches and Hold Files Attachment A Attachment B Attachment C Attachment D Attachment E Attachment F Attachment G |