Maintained for Historical Purposes

This resource is being maintained for historical purposes only and is not currently applicable.

Summary: Release of 03-04 FSA Handbook

Publication Date: April 28, 2003

Author: General Manager: FSA Schools Channel

Summary: Release of 03-04 FSA Handbook


Posted on 04-28-2003

TO: FSA School Partners

FROM: Kay Jacks, General Manager, FSA Schools Channel

SUBJECT: Release of 03-04 FSA Handbook

Volumes 2, 8, and 9 of the 2003-2004 Federal Student Aid Handbook have been posted to the IFAP Web site in PDF format. For your convenience, we are appending a quick reference list to this year's changes (see below).

The remaining volumes of the Handbook have been completed and have been submitted for final approval at the Department level. We will let you know as soon as they are approved and posted to IFAP.

Once all volumes have been approved, we will print the Handbook and mail it to all schools participating in the Federal Student Aid programs. You can review and update the address for Handbook delivery for your school at Questions and suggestions about the contents of the Handbook may be sent to the Research & Publications Group in the Schools Channel at:


Changes to the Application and Verification Guide for 2003-2004

There are some changes regarding the application processing system that pertain to this guide:

  • Paper FAFSAs signed before January 1, 2003 will no longer be returned. Instead, a reject SAR will be sent to the student asking her to date and re-sign the SAR and submit it for processing.
  • The verification tracking flag on the ISIR will now consist only of numbers (the A and B codes are gone), and the higher the number, the greater the chance that the student has made significant errors on the application.
  • A field for the student's e-mail address has been added to the paper FAFSA as question 99.
  • There is a new parent marital status item on the FAFSA-question 60.
  • FAFSA Express is no longer available.

Pell recipients now have 120 days (instead of 90) after their last day of enrollment-but not later than September 2, 2004-in which to submit verification documents and in which the school must have received a valid output document.

Due to changes in the tax law, new guidance regarding qualified tuition programs (QTPs) has been given. See p. 21.

We have added clarifying comments on dependency overrides for students who are veterans according to FSA standards but not according to the VA's standards. See "Not a veteran" on p. 26.

At the behest of schools, the "S" response has been added back to the list of verification status codes. It is used for some of the students that the blank response covered last year. See p. 52.


Changes to Volume 2 for 2003-2004 - Institutional Eligibility and Participation

> Chapter 1: The discussions of Week of Instruction and Week of Instructional Time have been revised to reflect the elimination of the 12-hour rule.

> Chapter 2: Since the regulations now have separate treatments of payment periods for clock-hour programs and payment periods for credit-hour nonterm programs, we now discuss them separately.

> Chapter 2: The discussion of A week of instructional time, which affects the definition of an academic year has been changed to reflect the elimination of the 12-hour rule.

> Chapter 2: The section on Incentive Compensation has been expanded to reflect the guidance in the November 1, 2002 regulations.

> Chapter 4: The treatments of returning funds in a timely manner and requirements for letters of credit have been revised.

> Chapter 5: The section of the law granting exceptions to the 30-day delay in making FFEL or Direct Loan disbursements has expired, and the text describing those exceptions has been removed.

> Chapter 5: The section dealing with the rules for making late disbursements has been revised.

> Chapter 6: The discussion under Attendance requirements of outside entities has been updated.

> Chapter 6: We have revised the discussion of an Approved leave of absence.

> Chapter 6: Reflecting the November 1, 2002 regulations, we have added a section on Transfer and reentry into a credit-hour nonterm based program or a program that measures progress in clock hours.

> Chapter 6: We have made changes to the discussion of Recording student payment and award reductions and student payments in the Pell Grant Program that reflect the continued development and implementation of COD.

> Chapter 7: We have added to the list of items that must be disclosed in your Campus Security Report, beginning with the annual security report that must be distributed by October 1, 2003, a statement advising the campus community where law enforcement agency information concerning registered sex offenders who might be present on campus can be obtained.

> Chapter 8: We have updated the treatment of FERPA to reflect changes made pursuant to the USA Patriot Act.

> Chapter 10: We have updated the definition of a family member in our discussion of a Change in controlling interest.

> Chapter 10: We have added a section on requirements when an eligible proprietary institution of higher education or postsecondary vocational institution changes from a branch campus to a freestanding main campus.

> Chapter 11: A section on the eZ audit process has been added.


Changes to Volume 8 for 2003-2004 - Direct Loans and FFEL

Several significant changes to the loan programs have recently taken effect. The statutory authority for the disbursement exceptions for schools with default rates less than 10% has expired (see sidebar notes to pages 8-45, 8-46, and 8-61). The Department has issued a new version of the Stafford MPN, expanded the use of the multi-year feature of the MPN to all schools located in the U.S., and approved the first PLUS MPN. (See pages 8-39, 8-41, and 8-48)

The program regulations published in the Federal Register on November 1, 2002, also made a number of changes that affect these loan programs.

> Modified counseling requirements, including requirements that schools provide sample monthly repayment amount to student during entrance counseling (new for FFEL) and tell borrowers about Loan History information on NSLDS (See Chapter Five).

> New late disbursement policies and procedures (8-62).

> Students in non-term programs must complete weeks of instruction as well as academic work in a payment period prior to receiving payment for subsequent payment period (8-63).

> The limits on leaves of absence have been modified (sidebar note, 8-66)

> Link to Federal Register:

We've also expanded our discussion of loan issues to incorporate material from Dear Colleague letters and other Departmental guidance:

> Choice of EFC for "crossover" loan periods (8-11).

> School may not have a policy of certifying loans only in amounts to cover school charges, or to limit unsubsidized borrowing by independent students (8-14).

> Receipt of Stafford/PLUS at more than one school (sidebar note, 8-18).

> Additional guidance on annual limits for transfer and other students (sidebar notes, 8-22).

> Remedial work and grade level (sidebar note, 8-23).

> Additional loan amounts for dependent students when parents can't get PLUS (sidebar notes, 8-24).

> Expanded discussion of Stafford limits for graduate and professional students (8-24 and 8-25).

> Loan limits for dependent students who previously borrowed as independent (sidebar note, 8-30).

> Loan limits for health professions borrowers who transfer to unrelated programs (8-36).

> Electronic notification for the borrower confirmation of subsequent loan disbursements (8-39).

> Expanded discussion of retroactive disbursements for payment periods already completed (8-63).

> Note on effect on Stafford eligibility of withdrawal from modular program (sidebar, 8-66).


Changes to Volume 9 for 2003-2004 - State Grant Programs

· Funding level for LEAP and SLEAP decreased from 67 total, w/37 being devoted to SLEAP, to 66.5 and 36.5 respectively.

· 2001-02 award year adjustment of authorized activities expeditures no longer relevant (had included stuff that was later dissalowed by amendments, this was accomodated by a notice in the HB and a special section in the next award year's application to participate in LEAP/SLEAP)