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Summary: HERA Operational Implementation Guidance (CPS, COD System, and EDExpress Suite) -- ACG and National SMART Grant

Publication Date: June 30, 2006

Author: G. Kay Jacks, General Manager, Application, Operations and Delivery Services, Federal Student Aid

Summary: HERA Operational Implementation Guidance (CPS, COD System, and EDExpress Suite) -- ACG and National SMART Grant

Posted on 06-30-2006

As explained in Dear Colleague Letter GEN-06-04, the Higher Education Reconciliation Act of 2005 (the HERA), Pub. L. 109-171, created two new grant programs effective July 1, 2006. Both the Academic Competitiveness Grant (ACG) and the National Science and Mathematics to Retain Talent Grant (National SMART Grant) will be available for eligible students beginning with the 2006-2007 Award Year.

The Department of Education (the Department) has posted several Dear Colleague Letters that provide eligibility and award guidance for the new grants. In addition to Dear Colleague Letter GEN-06-04, a school can refer to Dear Colleague Letters GEN-06-06 and GEN-06-08 for this guidance. These letters, as well as information about HERA-related training opportunities, are available under the "Higher Education Reconciliation Act of 2005 (HERA) Information" link on the home page of the Information for Financial Aid Professionals (IFAP) Web site.

Note: The Department has not yet issued regulations to implement the provisions of the HERA. Program participants, including schools, lenders, and guarantee agencies, should implement the provisions of the HERA in accordance with sub regulatory guidance provided by the Department in Dear Colleague Letters and other materials until the regulations are published and effective. In general, the regulations will be effective 30 days after they are published in the Federal Register. After the regulations are published in the Federal Register, the text of the regulations will be posted on the IFAP Web site.

We look forward to working together with schools to provide these new grant funds to eligible students. There will be a transition period as we implement the new grant programs, and we appreciate the extra effort, patience, and understanding that will be required of schools. In addition to modifying processes, procedures, and systems/software, schools will also field many additional questions, concerns, and requests for assistance from students. As we explain later in this announcement, in some cases, we will refer students directly to their schools for assistance. We thank schools in advance for the tremendous assistance they will provide in serving our students who will receive ACG and National SMART Grant awards.

In an Electronic Announcement posted May 5, 2006, we provided a high-level overview of how we will implement functionality for processing ACG and National SMART Grant awards. There are two basic components around which ACG and National SMART Grant processing revolves:

1. A school determines a student's eligibility.

A school uses Free Application for Federal Student Aid (FAFSA) data and information in the school's academic records to confirm and document a student's eligibility for an ACG or National SMART Grant award.

2. A school reports data.

A school provides origination and disbursement information for an ACG or National SMART Grant award via submission of the Extensible Markup Language (XML) Common Record to the COD System or via the COD Web site. In either case, the COD System returns responses to the school and sends accepted award information to the National Student Loan Data System (NSLDS).

In this announcement, we expand upon the high-level overview previously provided and cover information in the following order:

  • Availability of ACG and National SMART Grant Functionality
  • Information for EDExpress Users
  • Contact Information
  • Attachments/Enclosures

Availability of ACG and National SMART Grant Functionality

We are on schedule to implement functionality as follows:

  • On July 1, 2006, we will begin notifying students who are potentially eligible for an ACG award and begin providing schools with student responses to ACG eligibility questions.
  • During the period July 29-August 1, 2006, we will begin processing ACG and National SMART Grant initial authorizations for the Grant Administration and Payment System (GAPS).
  • Beginning the first week of August 2006, a school will be able to draw down funds for ACG and/or National SMART Grant awards, as applicable, via the GAPS.
  • Beginning September 1, 2006, a school that uses EDExpress software will be able to enter and store ACG and National SMART Grant origination and disbursement information. The EDExpress software will hold the origination and disbursement information until the COD System is ready to receive it on December 16, 2006.
  • Beginning December 16, 2006, Common Origination and Disbursement (COD) System functionality will be in place to support ACG and National SMART Grant origination and disbursement processing functions. This will include sending ACG and National SMART Grant award information to the NSLDS.
  • Beginning April 14, 2007, COD System functionality will be in place to support report and overpayment processing functions.

We cover the availability of ACG and National SMART Grant processing functions in the following order:

  • Processing Functions to Identify Potentially Eligible ACG Recipients Available July 1, 2006
  • Processing Functions for ACG and National SMART Grant Available July/August 2006
  • Processing Functions for ACG and National SMART Grant Available December 16, 2006
  • Processing Functions for ACG and National SMART Grant Available April 14, 2007

Processing Functions to Identify Potentially Eligible ACG Recipients Available July 1, 2006

Ultimately, it is a school's responsibility to verify a student's eligibility for an ACG award before awarding and disbursing the aid. As explained above, the school uses FAFSA data and information in the school's academic records to confirm and document a student's eligibility.

If a school desires, it can use self-identification information that we will collect from participating students to assist in identifying a potentially eligible student and the type of rigorous secondary school program completed. We will next explain how this available option will work. However, a student is not required to complete this self-identification process to be eligible for an ACG award, and a school may determine eligibility without the assistance of our information.

Note: Dear Colleague Letter GEN-06-08 outlines the options for meeting the rigorous secondary school program requirement.

Notification to Students

Students Who Have Already Applied for 2006-2007 Aid

On July 1, 2006, we will send a notice to a student who has already applied for aid for the 2006-2007 Award Year (by submitting a paper FAFSA or completing FAFSA on the Web) and who appears to be potentially eligible to receive an ACG. We will also send a notice to the parent of a potentially eligible student who completed FAFSA on the Web, provided the parent submitted an e-mail address.

  • A student will be identified as potentially eligible to receive an ACG if he or she meets all of the following criteria:

    1. Eligible to receive a Federal Pell Grant (Pell Grant)

    2. United States (U.S.) citizen (by self report)

    3. Grade level 0, 1, or 2

    4. 20 years old or younger as of January 1, 2006 (to approximate the date of high school graduation)

  • As with our other e-mail notifications, we will send an e-mail notification if we have an e-mail address for the student or parent with valid syntax (for more information about valid syntax, refer to "Important Information about E-mail" in the "2006-2007 Summary of Changes for the Application Processing System Guide."

    If a student does not have an e-mail address with valid syntax or if the e-mail notification is returned as undeliverable, we will mail a letter to the student, provided there is a deliverable mailing address.

  • The notice will provide options through which the student may respond to questions that will assist a school in determining if the student completed a rigorous secondary school program.
  • The student may respond to the questions online via a URL that will be provided in the notice or by calling the Federal Student Aid Information Center (FSAIC) at 800/4-FED-AID (800/433-3243).

    Note: If a student who has already applied for aid loses his or her notice, or for any reason does not know how to access the questions, the student may be directed to Corrections on the Web. After the student his or her personal identifiers and PIN and the Central Processing System (CPS) determines that the student appears to be potentially eligible to receive an ACG award, the student will be directed to the new Web screens through which he or she can respond to the questions.

  • For a school's information, the three versions of the notice we will send are attached to this Electronic Announcement in one document. Refer to "ACG Notifications."

Students Who Complete Paper FAFSA Beginning July 1, 2006

Beginning July 1, 2006, a student who completes a paper FAFSA and who appears to be potentially eligible to receive an ACG award will receive comment 267 on his or her Student Aid Report (SAR). This comment will direct the student to the URL or the FSAIC to respond to questions that will assist the school in determining if the student completed a rigorous secondary school program.

Students Who Complete FAFSA on the Web Beginning July 1, 2006

Beginning July 1, 2006, a student who completes FAFSA on the Web who appears to be potentially eligible to receive an ACG award will be given the opportunity to complete new Web screens as part of the online process. Through the new Web screens, the student will respond to questions that will assist the school in determining if the student completed a rigorous secondary school program.

FAAs Who Complete FAFSA or Renewal FAFSA Using FAA Access to CPS Online Beginning July 1, 2006

Beginning July 1, 2006, a Financial Aid Administrator (FAA) who completes a FAFSA or Renewal FAFSA for a student using FAA Access to CPS Online will have the option to complete the new Web screens for a student who appears to be potentially eligible to receive an ACG award. Upon completing a FAFSA or Renewal FAFSA, the FAA must select "Calculate EFC" at the bottom of the entry screen. If the application passes all edits and the student appears ACG-eligible, the "successful check" page will include a hyperlink that leads to the new Web screens. The FAA may select this link if he or she wishes to proceed with answering the ACG eligibility questions on the student's behalf. Note that an FAA can only answer the ACG eligibility questions on an initial or Renewal FAFSA, not a correction.

Note: In all cases, we will use self-reported information about citizenship to identify students who appear to be potentially eligible to receive an ACG. The reason we will use self-reported citizenship information-rather than the results of our match with the Social Security Administration (SSA)-is to take into consideration that SSA match results can, in some cases, be subsequently overridden when documentation of citizenship status is provided to the school. This approach may, however, result in some students who are initially identified as potentially eligible to receive an ACG later being identified as ineligible.

Information to Students and Schools

  • The process through which a student responds to the rigorous secondary school program questions is intended to be a one-time, self-identification process. After we provide the student's data to a school, the student and school will work together to confirm and document the student's eligibility for an ACG award. For this reason, neither the student nor the school need to correct responses to ACG eligibility questions identified as incorrect after the student has submitted them to the CPS. In fact, these questions are non-correctable fields.
  • After a student responds to the rigorous secondary school program questions, we will send a SAR to the student. Comments on the SAR will inform the student that follow up information about ACG eligibility will come from the financial aid office at the student's school.
  • We will notify a school of a student's responses to the rigorous secondary school program questions and other key data in the following ways:

    ISIR Comment Codes and Message Classes

    • We will send comment codes on an ISIR to the school. The new comment codes, 268-271 (ISIR positions 1677 to 1736), will inform the school of the student's responses to the rigorous secondary school program questions.

      For a school's information, the comment codes and their text are attached to this Electronic Announcement. Refer to "."

    • We will send the ISIR to the school's SAIG mailbox in the new pushed message class IGAA07OP.

      A new SAIG message class table that includes this message class will be sent to schools' SAIG mailboxes in the message class MESSAGTB on June 30, 2006.

      Note: A student can also provide responses to the rigorous secondary school program questions at the same time he or she makes corrections to his or her previously submitted data in Corrections on the Web. In this case, we will send the ISIR in the existing message class IGSA07OP or IGSG07OP.

    • Additional information about these comment codes, including the comment code text, is available in the updated "2006-2007 SAR Comment Codes and Text Guide" posted on the IFAP Web site.

ACG Data File

  • In addition to sending an ISIR to a school, we will send an ACG Data file containing responses to the rigorous secondary school program questions and other key data to the school via the SAIG.
  • Each day after FAFSA records are processed, we will create and send the ACG Data file to the school. The file will include data for all students who have listed the school on their ACG data transactions and who provided ACG data to the CPS for that day's compute.
  • We will send the ACG Data file in the new message class ED2007OP.

    A new SAIG message class table that includes this message class will be sent to schools' SAIG mailboxes in the message class MESSAGTB on June 30, 2006.

  • A school can use any text editor software to view the contents of the ACG Data file.

    Note for EDExpress Users: To import this file into EDExpress for Windows 2006-2007, a school will need to define the message class in its Global Setup.

  • Additional information about the ACG Data file, including its record layout, is available in the updated "2006-2007 EDE Technical Reference" posted on the IFAP Web site.

FAA Access to CPS Online Web Site

  • A school may view a student's responses to the rigorous secondary school program questions via the FAA Access to CPS Online Web site. The school will need to select "Student Inquiry" from the main menu.

Processing Functions for ACG and National SMART Grant Available July/August 2006

  • Beginning July 1, 2006, a school will be able to package, award, and disburse grants as soon as the school's system/software is able do so. However, a school must hold all award and disbursement information and submit it to the COD System after full COD System functionality is available on December 16, 2006.
  • During the period July 29-August 1, 2006, we will begin processing an Initial Authorization, known in the COD System as Current Funding Level (CFL), for schools, except those using the Heightened Cash Monitoring 2 (HCM2) or Reimbursement funding method, that will process ACG and/or National SMART Grant awards. A school will receive a separate Initial CFL for each of the two grant programs.
    • We will inform schools after we process the Initial CFLs via an Electronic Announcement on the IFAP Web site, the "COD Processing Update," and a COD Web Message.
    • We will generate and send an Electronic Statement of Account (ESOA) that lists the amount of a school's Initial CFL for each new grant program for the 2006-2007 Award Year.

      1. We will send the ESOA for the ACG Program to the school's SAIG mailbox in the message class AGAS07OP.

      2. We will send the ESOA for the National SMART Grant Program to the school's SAIG mailbox in the message class SGAS07OP.

    A new SAIG message class table that includes these message classes will be sent to schools' SAIG mailboxes in the message class MESSAGTB on June 30, 2006.

    • A school will be able to view its Initial CFLs on the Funding Information screen on the COD Web site.
  • In a separate communication, we will inform a school that is eligible to process ACG and/or National SMART Grant awards and that uses the HCM2 or Reimbursement funding method how we will handle its funding.
  • Beginning the first week of August 2006, a school will be able to draw down funds for ACG and/or National SMART Grant awards, as applicable, via the GAPS. The school must draw down and disburse ACG and National SMART Grant funds in accordance with the cash management regulations in 34 CFR 668 Subpart K.
    • The GAPS Award Number for ACG will be P375A06xxxx.
    • The GAPS Award Number for National Smart Grant will be P376S06xxxx.

    Note: The "xxxx" will be populated with a school's GAPS award sequence number that currently exists for the Pell Grant and Direct Loan programs.

  • In some cases, more than 30 days will elapse between the date a school disburses ACG or National SMART Grant funds and the date the school submits a record of that disbursement to the COD System.

    We will consider the school to be in compliance with the 30-day disbursement-reporting requirement and suspend related e-mail notifications regarding ACG and National SMART Grant awards until January 17, 2007.

    Note: During the period July 1, 2006 - January 17, 2007, we will continue to monitor disbursement-reporting compliance for Pell Grant and Direct Loan awards.

  • If an ACG or National SMART Grant overpayment occurs, a school will be able to report the overpayment to our collections area (Borrower Services-Collections) using revised forms that will be posted on the IFAP Web site. After reporting the overpayment to Borrower Services-Collections, the overpayment will be reflected in the NSLDS.

    The COD System will begin editing on ACG and National SMART Grant overpayments and inform a school that an overpayment exists with the implementation of the 2007-2008 Award Year functionality on April 14, 2007. Until that time, a school remains responsible for checking a student's overpayment status and will not be able to rely on the additional check by the COD System.

    Note: During the period July 1, 2006 - April 14, 2007, the COD System will continue to edit on Pell Grant overpayments and inform schools when a Pell Grant overpayment exists.

Processing Functions for ACG and National SMART Grant Available December 16, 2006

  • A school will send origination and disbursement information about ACG and National SMART Grant awards using new COD XML Common Record blocks or by submitting individual records via the COD Web site.
    • A school will use the Academic Competitiveness Grant Block for ACG awards. This block will include basic award data, an element for Eligibility/Payment Reason, and an element for Rigorous High School Program Code.

      Note: The Rigorous High School Program Code is the six-digit, alphanumeric code assigned to each rigorous secondary school program. If this code is applicable to a student, it will be included in the ACG Data file (Message Class ED2007OP) that will be sent to a school and will be available via FAA Access to CPS Online. In addition, we will post a list of all approved rigorous secondary school programs to the IFAP Web site in the very near future.

    • A school will use the National SMART Grant Block for National SMART Grant awards. This block will include basic award data and a specific element for Major/CIP Code.

      Note: Dear Colleague Letter GEN-06-06 provides the list of eligible academic majors and their respective CIP codes.

  • We posted the COD Common Record XML Schema Version 2.0e on June 15, 2006. The COD Common Record XML Schema Version 2.0e includes the Academic Competitiveness Grant Block and the National SMART Grant Block.

    Effective December 16, 2006, all 2006-2007 Common Record documents that contain ACG and/or National SMART Grant origination and disbursement information must be sent by schools and will be acknowledged by the COD System using COD Common Record XML Schema Version 2.0e.

    Complete information about COD Common Record XML Schema Version 2.0e is available now in the updated 2006-2007 COD Technical Reference.

  • The 2006-2007 COD Technical Reference will reflect all ACG and National SMART Grant implementation information upon posting of the last installment of HERA-related technical reference updates in late July 2006. We will post the technical reference updates to the IFAP Web site and announce the availability of the updates in the "COD Processing Update" and via a COD Web Message.

After full COD System functionality is available on December 16, 2006, a school will be able to complete the following ACG and National SMART Grant processing functions:

  • Submit awards and disbursements to the COD System via batch and Web.
  • Receive responses from the COD System.
  • Access award and disbursement data via the COD Web site.
  • Access grant information, coded as "AG" for ACG and "SG" for National SMART Grant, in the NSLDS. ACG information will include Eligibility/Payment Reason codes.

Processing Functions for ACG and National SMART Grant Available April 14, 2007

  • A school will receive reports, such as reconciliation and year-to-date, from the COD System that reflect ACG and National SMART Grant information.
  • A school will receive an edit code message (Edit 115) when the COD System receives a new award for a student who has an ACG or National SMART Grant overpayment.

Information for EDExpress Users

We will modify the 2006-2007 EDExpress software as follows:

  • On September 1, 2006, we will post 2006-2007 EDExpress 3.0 Release to the FSAdownload Web site. This release will implement the following functionality in the EDExpress software:
    • A school will be able to enter and store ACG and National SMART Grant origination and disbursement information. The EDExpress software will hold the origination and disbursement information until the COD System is ready to receive it on December 16, 2006.
    • A school will be able to import ESOAs for the ACG and National SMART Grant programs into the EDExpress software. The school will be able to print the ESOA but will not be able to store the ESOA in the EDExpress database.
  • On December 15, 2006, we will post 2006-2007 EDExpress 4.0 Release to the FSADownload Web site. This will allow a school to export ACG and National SMART Grant origination and disbursement information to the COD System beginning December 16, 2006.

Contact Information

Once again, we appreciate your partnership in serving ACG and National SMART Grant recipients.

If you have questions about the functionality for identifying potentially eligible ACG recipients or the EDExpress software, contact CPS/SAIG Technical Support at 800/330-5947 (TDD/TTY 800/511-5806). You may also e-mail CPSSAIG@ed.gov.

If you have questions about the COD System functionality, contact the COD School Relations Center at 800/4PGRANT. You may also e-mail CODSupport@acs-inc.com.