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(GEN-97-13) Changes and enhancements to the 1998-99 application processing system.

DCLPublicationDate: 11/1/97
DCLID: GEN-97-13
AwardYear: 1998-1999
Summary: Changes and enhancements to the 1998-99 application processing system.

Action Letter #3

November 1997


SUMMARY: Changes and enhancements to the 1998-99 application processing system.

Dear Colleague:

This Action Letter describes changes to the 1998-99 application processing system, the FAFSA on the Web products, the Free Application for Federal Student Aid (FAFSA), the RenewalFAFSA, the Student Aid Report (SAR), and the Institutional Student
Information Record (ISIR). These are the major improvements that we have made:

We initiated options for students to file FAFSAs and Renewal FAFSAs through the Internet.
We began development of the processing system two months ahead of schedule, to permit earlier release of all system products.
We will transmit Reject 15 ISIRs (parent signatures missing) to institutions and state agencies.
We strengthened Reject 4 (date of birth equal to the current year) and Reject 1 (Simplified Needs Test not met and asset information missing).
We added one intermediate value, FISAP Total Income (FTI), to the FAA Information on SARs and ISIRs
We enhanced the report of Financial Aid History from the National Student Loan Data System (NSLDS).
We will begin the new "Postscreening" process of the National Student Loan Data System(NSLDS) to notify schools when NSLDS detects changes to student eligibility.
We began distributing FAFSAs October 1.
We enhanced the system to allow students to telephone the Federal Student Aid Information Center to correct keying errors.


On June 30, 1997, we introduced FAFSA on the Web, an interactive application that students may use to apply for Federal student aid over the Internet. FAFSA on the Web is easy to use and does not require a student to install software prior to filling in the application. It has a user-friendly interface, extensive on-line instructions, and a search engine for retrieving Title IV School Codes.

The signature page process for FAFSA on the Web is identical to the process used for FAFSA Express: If the student has a printer available and mails in the signature page, we hold that student's record for 14 calendar days while awaiting the signature page. If a valid signature page is not received within 14 days, the Central Processing System (CPS) prints a rejected Student Aid Report (Reject 16 SAR) and requests that the student (and parent of a dependent student) sign and return Part 2 to the FAFSA processor. If the applicant indicates that a printer is not available at the time of transmitting the record via FAFSA on the Web, the CPS will
immediately send a Reject 16 SAR to the student requesting the appropriate signatures. Once all appropriate signatures are received by the FAFSA processor, and assuming the application is complete and not rejected for any other reason, the CPS can calculate the student's Expected Family Contribution (EFC). FAFSA on the Web also has a customer service line (1-800-801-0576) where users may check the status of their applications and receive assistance with hardware, software, and transmission.

The 1998-99 version of FAFSA on the Web will have a new look and an interview format that uses graphics and friendly language to lead the user through the application. This version was designed for students and parents who are first-time users of the FAFSA, not expert users, and its intention is to help eliminate barriers of language and format that might make the application process appear complex or intimidating. Instead of displaying a form to be completed, the interview version presents a series of screens with questions placed in logical groupings. It offers additional help for certain questions that sometimes create problems and roadblocks for students and parents, as observed in usability testing done on the 1997-98 FAFSA. We have enhanced the skip logic in the interview version, so students never see questions that do not apply to them. In some cases, this skip logic can be overridden, for example, when independent students need to provide parental income. Although the phrasing of specific questions is similar to other FAFSA versions, the
presentation intersperses the questions with encouragement and praise, and uses color and graphics to humanize the process.


Beginning January 2, 1998, some students who are re-applying for financial aid will be able to file their 1998-99 Renewal FAFSAs through the Internet. This method for submitting a Renewal Application will supplement, but not replace, the current Renewal Application process. Students who are not able to file using the Internet will still be able to submit their paper Renewal Applications to the FAFSA processor, or their school may submit Renewal Applications electronically through EDExpress if the school chooses to do so.

Distribution: As in previous years, students who are eligible to receive 1998-99 Renewal Applications will receive a paper Renewal Application, either distributed by the school or mailed by the Department. Institutions that participate in Electronic Data Exchange may again request paper and electronic Renewal Applications for their students, using the same options that were available for the 1997-98 academic year (see Action Letter #1, GEN-97-10, September 1997). Each paper Renewal Application package, whether provided in a bulk-mailing to requesting institutions or sent
directly to the student, will include an insert printed on blue paper that announces Renewal FAFSA on the Web, gives the Internet address, and briefly describes the process.

Signature Page: Renewal FAFSA on the Web eliminates the need for an independent student to follow up the electronic submission of the Renewal Application to the CPS with the mailing of a signed certification page. This is because an assigned PIN/Hash, to be called the Electronic Access Code (EAC), substitutes for the
applicant's signature.

Screens in Renewal FAFSA on the Web will inform the applicant that access to the Renewal FAFSA and its subsequent submission to the CPS, using the EAC, constitutes the submission of an "electronic signature." However, the process designed to use the EAC for a student applicant, and thus eliminate paper signed certifications, does not provide for obtaining parent signatures and certifications in cases where the applicant is dependent. While we continue to seek a solution that will allow a fully electronic signature option for dependent students and their parents, for 1998-99 a dependent student will need to print and mail a signature page including a
parent's signature to the processor. This process will be very similar to what is currently required in the two "original" FAFSA electronic processes (FAFSA Express and FAFSA on the Web).

Electronic Access Code: To receive an EAC and apply through the Web, a student must be residing at the same address that is printed on his or her paper Renewal FAFSA. The EAC process will work as follows: A randomly created Electronic Access Code (EAC) will be assigned to each Renewal FAFSA record. Beginning November 17, 1997, applicants may apply for their EAC at the FAFSA on the World Wide Web address ( The Renewal FAFSA website will ask the applicant for his or her social security number, first two letters of the last name, and date of
birth. The system will immediately query the Renewal FAFSA database, and if the record is found, the system will ask the applicant if he is still living at the address that is printed on lines 4-7 of the applicant's Renewal application. If he is, the system will inform the applicant that a personal EAC will be mailed to that address.

If a student no longer resides at the given address, he or she will not be able to submit a Renewal FAFSA through the Internet. These students have the option of completing and mailing the paper Renewal FAFSA, or submitting an original FAFSA on the Web or FAFSA Express application.

The requested EAC will be mailed to the applicant in a secure envelope, to the address that is printed on the applicant's 1998-99 paper Renewal FAFSA (lines 4-7). The EAC should arrive at the applicant's address within 7 to 10 days from the time the request is made. After receiving the EAC, the applicant can go to the Renewal FAFSA website where the same three identifiers (social security number, first two letters of the last name, and date of birth) will be entered, followed by the EAC. If the identifiers and the EAC match, the system will display the applicant's 1998-99 Renewal FAFSA. The student can then update and correct the Renewal Application on-line and submit it to the CPS. Applicants may begin accessing Renewal FAFSAs and submitting data on January 2, 1997.

Signature Requirement Summary: For an independent applicant-- after completing the Renewal FAFSA, the applicant can electronically submit the application to the CPS and the CPS will process the application since no signature page is required.

For a dependent applicant--after completing the Renewal FAFSA, the system will ask the applicant to print a signature page and obtain a parent's signature. The applicant indicates to the system whether or not a signature page has been printed. The application is then submitted electronically. If no signature page was printed, the CPS will immediately send the applicant a SAR with the required signature page (Reject 15 SAR). If a signature page was printed, the CPS will wait up to 14 days for the page to be returned. If after 14 days the signature page is not received, a Reject 15 SAR will be produced and mailed to the applicant. After receiving the
submitted application from the website and a signature page, the CPS will process the application.


Start-Up Information

The 1998-99 Central Processing System will start up on January 9, 1998. All system development activities began two months earlier than in previous years, and we are currently on-schedule for all system development and testing activities.

Changes to Edits

We strengthened two CPS rejects for 1998-99. Reject 1, which applies when students and parents do not meet the criteria for the simplified needs calculation and do not provide asset information, has been revised. If the applicant responds only to question 82 in Section F (age of the older parent) but leaves all other asset questions blank, the CPS will apply Reject 1, indicating that no asset information was provided. Reject 4, which is triggered when the year reported for the student's date of birth is the same as the current year, will also apply any time the reported date of birth is later than the current year.


In the FAA Information sections that will appear on SARs and ISIRs, we have added one new intermediate value. This is the FISAP Total Income (FTI), which represents the family's total income for the independent student and spouse, or for the dependent student and parents. This is the value that should be used when placing the applicant on the "income grid" (Section G) of the FISAP filed in the Fall of 1999. For a dependent student, the FTI amount is the sum of the STI (student's total income) plus the TI (parents' total income). For an independent student, the TI (total income) and the FTI amounts will be the same. The FTI value will also appear on SARs and ISIRs for students who qualify for the automatic zero EFC.


We have added several important enhancements to the financial aid history data received from the National Student Loan Data System (NSLDS) and to the NSLDS Financial Aid History report that will appear on SARs and ISIRs. Note that for 1998-99, EDExpress users will be able to print the NSLDS data as a stand-alone report. The following changes have been made:

We added "#" signs to identify data fields that have changed since the last prescreened transaction. A "#" sign will print next to the changed area on the NSLDS Financial Aid History Page for the following fields: Overpayment Flag, Defaulted Loans Flag, Discharged Flag, Loan Satisfactory Repayment Arrangements Flag, Active Bankruptcy Flag, Aggregate Amount for FFELP/Direct Loans, Perkins Loans Data, Pell Payment Data, and each loan in the "Loan Detail" section.

A Discharged loan flag was added to reflect the status of any loan discharged due to disability or death. If this flag is present, the "C" flag is set on the SAR/ISIR and a comment is given.

A Loan Satisfactory Repayment Arrangements flag was added to reflect the status of loans with a "DX" (Defaulted, Satisfactory Arrangements, and Six Consecutive Payments) status. Unless an applicant has other defaulted loans, the presence of one or more loans with a status of "DX" will not generate a "C" flag.

The Overpayment field will now contain "N" for no overpayment, "Y" for an overpayment, or "S" for satisfactory arrangements made to repay the overpayment. Also, a Contact (either a school code or an ED region) is provided for each
overpayment reported.

Consolidated Loans Pending Disbursements was deleted from the Aggregate Amount section since there is no concept of a partially disbursed consolidation loan.

Pell Payment Data was added to show current award year (1998-99) information. The School Code, Transaction Number, Scheduled Amount, Disbursed Amount, Remaining Amount To Be Paid, Percent Scheduled Used, and Date of Last Activity for up to two Pell Grant payment data submissions will be displayed. Schools will be told if they should access NSLDS for additional Pell Payment Data when the student has more than two disbursements.

The Most Recent FFEL/Direct Loans and Defaulted Loans sections have been combined into one section titled "Loan Detail." The "Loan Detail" section will display up to 12 loans, and will be sorted by "Loan Begin Date," then "Outstanding Principal
Balance." If a loan is in default, the status code for that loan will be printed in bold on the SAR.

The Current Holder field of the "Loan Detail" section will be changed to Contact, the Region Code will be removed, and a Contact Type will be included for each loan. Contact Types are: School "SCH," Lender "LEN," Federal Direct Loan Servicer "DLS," ED Region "EDR," Guaranty Agency "GA," Lender Servicer "LNS," or not applicable "N/A." Information on whom to contact for each loan will be included in the comment text.

Also, a new loan type "Non-Subsidized Stafford = SN" will be added to reflect Stafford loans (not eligible for ED interest subsidy) made prior to 10/1/92.

NSLDS Postscreening

Beginning in 1998-99, we will implement an NSLDS postscreening process to assist schools in identifying students whose eligibility for student aid changes as a result of changed information that is reported to the NSLDS. Eligibility changes because the student 1) goes into default status 2) goes out of default status, 3) goes into overpayment status, or 4) goes out of overpayment status. In these situations, the CPS will generate a new transaction that reports the changed information in the affected student's Financial Aid History information. These records will display a "system-generated" flag of "N" and a SAR/ISIR comment that the transaction was created because of a change in NSLDS information. When a new transaction is system-generated, the CPS automatically transmits ISIRs to the
schools that are listed on the student's most recent transaction, and also prints and mails a new SAR to the student's current address.


We distributed FAFSAs beginning October 1. As in the past two years, orders for supplies of the 1998-99 FAFSA will be mailed out first to addresses on the west coast because of the longer time required for delivery.

The color of the 1998-99 FAFSA will be blue (PMS Number 290U, screened at 60%). Several changes have been made to data elements as a result of usability testing done using the 1997-98 FAFSA, and discussions with colleges and state agencies about items that could be eliminated or simplified. We made the following changes:

Combined the two questions requesting the date the student received either a high school diploma or a GED into a single "yes-no" question (question 20)
Merged the previous section B (Education Background) with Section A (You, the Student)
Eliminated previous question 37, "Number for Dependent Care"
Eliminated "day" from all the date fields except for the student's date of birth and the date signed. An applicant now needs to provide only the month and year for the date that the student (and parent) became a legal resident of their state (questions 12 and 48), and for the date the student expects to complete his or her degree/certificate (question 30).
Eliminated "with relatives" In the list of choices for "housing code" in Section G (questions 91-101), and
Simplified the certification statements that students and parents must sign on page 4 of the FAFSA (question 104-105).

As a result of the Personal Responsibility and Work Opportunity Reconciliation Act of 1996 (Welfare Reform Act), which phases out AFDC/ADC, questions 59 and 71 now ask applicants to report benefits received under Temporary Assistance for Needy Families (TANF), as well as AFDC/ADC. Also resulting from the Welfare Reform Act, two categories of eligible noncitizens have been removed from the FAFSA instructions for questions 15 and 16: these categories are noncitizens with "family unity status" and other noncitizens with a Temporary Resident Card (I-688).

In the FAFSA instructions, we added a task list titled "How to complete this form" to the first page of the FAFSA booklet to improve navigation of the form. The first page also includes the Office of Postsecondary Education's (OPE) website address to assist students in locating information about the Federal student aid programs. The telephone number for the Federal Student Aid Information Center (1-800-4FEDAID) was moved to a more prominent place on the last page of the FAFSA instructions.

Worksheets A and B for the "Simplified Needs Test" have been revised, also based on usability test results. Students and parents are asked several "yes or no" questions. If they answer "yes" to any of the questions, they must complete the asset section of the FAFSA. If they answer "no" to all of the questions, they may skip the asset section. Finally, the text in the Privacy Act Statement on page 12
of the instructions was shortened.


The 1998-99 Student Aid Report (SAR) will be printed on blue paper. The section and question numbers on the SAR and ISIR have been revised to reflect the changes made to the FAFSA.

We will use Reject 15 SARs as a signature and certification document to collect the parents' signature(s) for a student who files a Renewal FAFSA on the Web and doesn't send in a parental signature page (see the previous section on Renewal FAFSA on the Web for details about this signature procedure). As in previous years, the Reject 16 SAR will be used to collect the signatures and certifications required for students (and parents of dependent students) who file an application using either FAFSA Express or FAFSA on the Web. Beginning with the 1997-98 processing cycle,
we started transmiting Reject 16 ISIRs to institutions. Beginning with the 1998-99 processing cycle, we will also start transmitting Reject 15 ISIRs to institutions.

The student's PIN that previously appeared on the SAR has been renamed, and will be called the Data Release Number (DRN). The uses of the DRN are identical to those for the PIN. We have added a new paragraph to the "Codes and Instructions" page of the SAR, which provides instructions to help a student make corrections. This
paragraph informs students that they may call the Federal Student Aid Information Center at (319) 337-5665 and use the DRN provided on their SARs to change their address or change college choices. This process is currently in effect for the 1997-98 award year.


We enhanced the system to allow students to telephone the Federal Student Aid Information Center (FSAIC) and correct keying errors. In addition to allowing students to call the FSAIC to change their address or college choices, beginning in 1998-99 they will also be able to telephone 1-800-4FED AID, and have any processing errors corrected, using the DRN provided on the SAR. The FSAIC will check the scanned image of the student's FAFSA, and if processing errors are confirmed, the FSAIC will correct up to six items on-line. The CPS will then print and mail a new SAR to the student and send ISIRs to schools. Note: This system will be used only to correct keying errors made by the FAFSA processor.


Earlier this year, the Department mailed a letter to schools requesting name, address, and Title IV School Code updates. These updates were due back to the Department by July 1997. The Title IV School Code book will be published in November, and mailed to high schools, colleges, and public libraries. Students and schools can also access the Title IV School Code List on the Department's home page

We continue our efforts to improve the application processing system and respond to the concerns and needs that you, our customers, have expressed in focus groups, at conferences, and other forums. Please continue to communicate with us about other
system changes you wish to suggest; and also let us know when processes and changes are meeting your needs, so we can better support you in the delivery of aid to your students.


Elizabeth M. Hicks
Deputy Assistant Secretary
Student Financial Assistance Programs

Renewal FAFSA mockup
SAR mockup (with NSLDS page)
1998-99 Verification Worksheets
1998-99 Address/School Change Form

Attachment A
Attachment B
Attachment C
Attachment D
Attachment E

Last Modified: 10/31/1997