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Student Eligibility and Financial Need - Student Eligibility

AwardYear: 1997-1998
EnterChapterNo: 2
EnterChapterTitle: Student Eligibility and Financial Need
SectionNumber: 1
SectionTitle: Student Eligibility
PageNumbers: 3-38

This section addresses the student eligibility criteria common to most
Student Financial Assistance (SFA) Programs. Although programs
vary, basic requirements (such as citizenship and satisfactory
progress) remain the same for every student--whether the student is
applying for grants, loans, or work-study. (See chapters 4 through 11
for information on specific requirements that apply to individual

Student eligibility criteria are often affected by requirements or
policies determined by individual schools. For instance, a student
must be meeting satisfactory academic progress standards to receive
aid; a school, however, must have established a satisfactory progress
policy for the purpose of monitoring whether the student meets the
required standards. Note that many institutional requirements
mentioned in this chapter are also discussed in detail in Chapter 3.


A student must be in one of the following citizenship categories to be
eligible for aid through the SFA Programs (see Appendix A for
details on documenting these statuses).

[[Eligible categories]]
1. A U.S. CITIZEN OR NATIONAL. The term "national" includes
citizens of American Samoa and Swain's Island.

2. A U.S. PERMANENT RESIDENT. A permanent resident's
citizenship status should be evidenced by a comment on an output
document indicating that an Immigration and Naturalization
Service (INS) match has been successful. If no such comment
appears on the output document, the permanent resident must
provide the school with INS documentation verifying his or her
citizenship status.

eligible citizens of the Republic of the Marshall Islands, the
Federated States of Micronesia, or the Republic of Palau may
receive only three types of SFA Program aid: Federal Pell Grants,
Federal Supplemental Educational Opportunity Grants (FSEOGs),
and Federal Work-Study (FWS) funds.

4. OTHER ELIGIBLE NONCITIZENS. Refugees, persons granted
asylum, Cuban-Haitian entrants, those with temporary resident
status under the Immigration Reform and Control Act of 1986, and
others are included in this category. Such individuals must provide
the school with INS documentation indicating that they are in the
United States not with the intention of staying temporarily but
with the intention of becoming U.S. citizens or permanent

An individual who is in category 1, 2, or 4 and attends an eligible
school in the United States is eligible for any type of aid through the
SFA Programs. If attending foreign schools that participate in the
Federal Family Education Loan (FFEL) Program, these individuals
may also receive FFELs. In the case of parents who want to take out
a Federal PLUS Loan for a dependent undergraduate student, the
parent(s) and the student must be U.S. citizens or nationals,
permanent residents, or eligible noncitizens (that is, categories 1, 2,
or 4).

[[SSA citizenship match]]
All applications automatically go through the Social Security
Administration (SSA) matching system, which verifies both U.S.
citizenship status and social security numbers (SSNs). The result of
the SSA citizenship match is reported on the output document (see
page 2-28 for more on the SSN match).

When the student reports that he or she is a citizen and the SSA
confirms this, there will be no comment on the output document. The
match flag, reported as "SSA Citizenship Code" (on the SAR) or
"SSA" (on the ISIR) in the FAA Information section, will be "A" or
blank. If the SSA did not confirm that the student is a citizen, a
comment will be provided explaining that the student either needs to
provide documents proving citizenship or make a correction to show
that he or she is an eligible noncitizen (Comment 146). (See
Appendix A for information on acceptable documentation.) If SSA
could not find a match in its database for the student's SSN, name, or
date of birth, there will be a comment stating that SSA could not
confirm citizenship because of a question about these items
(Comment 62). In this case, the student must correct his or her

Beginning in 1997-98, if a student leaves the citizenship question
blank on the FAFSA (question 15) but the SSA reports that the
student is a U.S. citizen, the CPS will not necessarily reject the
application for lack of citizenship information. If there was a
complete match with the student's SSN, name, date of birth, and U.S.
citizenship, the CPS will instead assume the student is a citizen. The
CPS will still reject the application if one of the items did not match,
or if the SSA match shows the student is not a citizen.

[[Match carryover to later years]]
The CPS will rematch the student's record with the SSA database if
the student corrects the SSN, the first or last name, or date of birth.
Beginning in 1997-98, once all four SSA match elements (SSN,
citizenship, name, date of birth) have been confirmed, the SSA
Citizenship Flag will be carried forward to the student's 1998-99
Renewal Application and the match will not need to be performed
again in subsequent years (unless the student changes any of the
match elements on a later application).

[[Citizens born abroad]]
Note that U.S. citizens born abroad might fail the SSA citizenship
match unless they have updated their citizenship information with
the SSA (see Appendix A for more information on how students
born abroad should proceed).

Primary Confirmation

[[Match with INS records]]
To verify the citizenship statuses of U.S. permanent residents and
other eligible noncitizens, the Department collects Alien Registration
Numbers (A-Numbers) on the FAFSA. (The INS assigns A-Numbers
to all legal immigrants.) If the applicant indicates on the FAFSA that
he or she is an eligible noncitizen and provides an A-Number,
identifying information from the FAFSA is automatically sent to the
INS for confirmation. This verification process, performed by the
INS, is known as "Primary Confirmation."

If a student mistakenly reports that he or she is a citizen rather than
an eligible noncitizen, the school may make the correction
electronically, or the student may correct the mistake on the SAR. In
either case, the student must be sure to provide his or her A-Number.
The CPS then processes the student's correction and conducts a
match with the INS database.

[[INS Verification Numbers]]
When an INS match is conducted, a 13-digit INS Verification
Number is assigned to the student and printed in the FAA
Information section. If the student's citizenship is not confirmed, the
student's data generally must be checked through the Secondary
Confirmation process (discussed below). The INS Verification
Number must be provided on the Secondary Confirmation Request
Form (see Appendix A for an explanation of how to complete this
form). Note that if no INS match can be made because a student
failed to provide an A-Number on the application, that student will
not receive an INS Verification Number. The student's information
should be resubmitted with the A-Number so that a computer match
may be attempted.

[[When SSA and INS flags conflict]]
Because all applications are sent to the SSA match, an application
that undergoes the INS match will also undergo the SSA citizenship
match. Previously, the match results from both matches were
provided on the output document. However, in some cases the INS
and SSA citizenship match flags may conflict, or cause confusion
about what procedures the school should follow. Because of these
possible conflicts, in cases where the INS match is conducted, the
SSA citizenship match flags will not be provided on the output
document, and the school should follow the usual procedures for
resolving any INS match discrepancies.

Secondary Confirmation

If the INS is unable to confirm a student's claim to be an eligible
noncitizen or a school has conflicting information about a student's
citizenship status, the school has to collect additional documentation
and submit it to INS. This collection and submission of additional
material is known as "Secondary Confirmation." See Appendix A for
detailed information about Secondary Confirmation.

[[Exception to Secondary Confirmation requirement--34 CFR
As of the 1996-97 award year, there is an exception to the
requirement to conduct Secondary Confirmation. A school is not
required to request Secondary Confirmation if the student was
determined to be an eligible noncitizen through Secondary
Confirmation in a previous award year, and the documents used for
that Secondary Confirmation have not expired. The school must also
have no conflicting information about the student and no reason to
doubt the student's claim of having eligible noncitizen status.

Changes in Status During the Award Year

[[Pell & campus-based]]
If a student becomes a citizen or eligible noncitizen at any time
during the award year, that student may be paid Pell Grant or
campus-based funds as if he or she had been eligible the entire award
year. For example, if a student attending school during the 1997-98
award year (July 1, 1997 to June 30, 1998) is granted permanent-
resident status in May 1998 and is still enrolled in school at that time,
that student may receive Pell Grant and campus-based funds as if he
or she had been eligible every payment period that the school
considers part of that award year.

[[FFELs & Direct Loans]]
Similarly, if a FFEL or Direct Loan borrower becomes a U.S. citizen
or an eligible noncitizen during a period of enrollment, the borrower
may be paid as if he or she had been a U.S. citizen or eligible
noncitizen during the entire period of enrollment. In a case where the
period of enrollment is an academic year, the student would be
eligible for the full annual maximum loan, regardless of when during
the academic year he or she became eligible. For example, suppose a
student begins a two-year program in July 1997 and is not a citizen
or eligible noncitizen. The student becomes an eligible noncitizen in
April 1998 and her second academic year begins in May 1998. The
student could receive a loan for the entire first year, up to the annual
limit, and then receive a loan for the second academic year beginning
in May.

Note that while a period of enrollment for a loan may cross an award
year, it must coincide with academic terms such as an academic year,
semester, trimester, quarter, or other academic period (as defined by
the school). Therefore, the school will not always be able to include
the student's entire previous enrollment in the loan period when the
student becomes eligible. In the example above, suppose the student
becomes eligible after May 1998, after she has started the second
academic year. Because there is no academic term that includes both
academic years, the enrollment period can include only the second
academic year and cannot be adjusted to include any part of the first
academic year. Therefore, the student is not allowed to receive a loan
for the first year but is allowed to receive the full amount for which
she is eligible as a second-year student.

[[Loss of eligibility]]
A school is required to check a student's citizenship eligibility status
only once during the award year (or period of enrollment for FFELs
and Direct Loans), when aid is first disbursed. If a student later loses
citizenship or eligible noncitizenship status during that award year or
period of enrollment, the school does not need to take any action to
prevent the student from receiving subsequent disbursements.


With limited exceptions, an individual must be enrolled as a regular
student in an eligible program in order to receive SFA funds. A
regular student is one who is enrolled for the purpose of obtaining a
degree or certificate offered by the institution.

[[Definition of eligible program]]
The regulatory definition of an eligible program is based on
requirements found in statutory language defining eligible
institutions. To qualify as an eligible institution, a school must offer
at least one eligible program. However, not all programs at an
eligible institution will be eligible. Indeed, factors such as course
length or admissions requirements may prevent some programs at
eligible schools from qualifying as eligible programs. Financial aid
administrators should carefully study the material in Chapter 3 on
program eligibility.

Three aspects that largely define an eligible program are especially
important to note--the education credentials that the program awards,
its length in instructional time and coursework offered, and, for
"short term programs," compliance with certain qualitative factors
including completion and placement rates. These qualitative factors
are discussed in Chapter 3, Section 1.

[[Study abroad]]
The eligible program requirements also apply to study-abroad
programs approved for credit by eligible institutions. Again, to
receive aid, a student in a study-abroad program must be enrolled as
a regular student at the eligible institution approving the coursework.
There also must be a contractual agreement between the home
institution and the foreign school (see Chapter 3, Section 5).

[[Minimum length]]
The minimum length required for a program to be considered
eligible varies according to the type of institution. Note that program
length determines a program's eligibility and affects the amount of
aid that may be awarded to students in the program. The amount of a
student's Pell Grant, Stafford Loan, or Direct Loan will be reduced if
the program is less than an academic year long. (See Chapters 4, 10,
and 11.)

Two Exceptions to the "Eligible Program" Requirement

There are two cases when a student does not have to be enrolled as a
regular student in an eligible program to receive a FFEL or Direct
Loan. There is one case when a student does not have to be enrolled
as a regular student in an eligible program to receive a Perkins Loan
or FWS.

[[Preparatory coursework]]
A student who is not enrolled in a degree or certificate program is
eligible for FFELs or Direct Loans for a period of up to one year if
the student is taking coursework necessary for his or her enrollment
in an eligible program. The coursework must be part of an eligible
program otherwise offered by the school, although the student does
not have to be enrolled in the eligible program. For instance, a
student who has already received a bachelor's degree might need an
additional 12 hours of specialized undergraduate coursework in order
to enroll in a graduate program. If a student is enrolled at least half
time in these prerequisite courses and if the courses are part of an
eligible program, the student is eligible for loans for one consecutive
12-month period beginning on the first day of the loan period for
which the student is enrolled.

If the 12-month period of preparatory coursework represents more
than one academic year, the student may receive multiple loans. The
loan limit for a first-year undergraduate applies, with certain
exceptions as of January 1997. A student with a bachelor's degree
taking preparatory coursework to enter a graduate or professional
program can borrow up to the $5,500 annual loan limit established
for third-, fourth-, or fifth-year undergraduates. Graduate loan limits
apply only when the student has been admitted as a degree candidate
in a graduate program and has begun to take enough courses to
qualify as at least half time on the graduate level.

[[Teacher certification]]
Another exception to the requirement that the student be enrolled as
a regular student in an eligible program involves the FFEL, the
Direct Loan, the Perkins Loan, and the FWS programs. This
exception allows eligibility for a student who is enrolled at least half
time in a required teacher-certification program, even though the
teacher-certification program does not lead to a degree or certificate
awarded by the school (for example, the certificate may instead be
granted by the state). The program must be required for elementary
or secondary teacher certification or recertification in the state where
the student plans to teach or in the state where the student is
completing the program. This exception is not intended to cover
optional courses that the student elects to take for professional
recognition or advancement. Nor does the exception cover courses
that the school recommends but that are not required for certification
or recertification. The school should document that the courses are
required by the state for teacher certification. For purposes of the
FFEL and Direct Loan programs, a student who is considered
eligible under this exception is considered a fifth-year
undergraduate; therefore, the loan limit is $5,500, plus an additional
$5,000 in unsubsidized loans if the student is classified as


To receive SFA funds, a student must be qualified to study at the
postsecondary level. For SFA purposes, a student with a high school
diploma or its recognized equivalent is considered qualified.
Students who pass approved ability-to-benefit (ATB) tests may also
be qualified (see the discussion that follows).

[[Equivalents to the high school diploma]]
SFA regulations identify several recognized equivalents to the high
school diploma:

- General Education Development (GED) certificates and state

- For a student enrolling in an educational program that is at least at
the associate-degree level, documentation that the student excelled
academically in high school and has met the school's admissions

- A certificate of completion of a home-study program if the
program is recognized by the student's home state;

- A student's postsecondary school academic transcript if the
student has completed a program of at least two years in length
that is acceptable for full credit toward a bachelor's degree.

[[Ability to benefit]]
An SFA applicant without a high school diploma or its recognized
equivalent can be eligible for SFA funds if he or she 1) passes an
independently administered test used for determining the student's
ability to benefit from postsecondary education and approved by the
Department or 2) enrolls in a school that participates in a process that
has been both prescribed by the state in which the school is located
and approved by the Department.*1*

[[Approved tests]]
On December 1, 1995, the Secretary published new regulations for
approving and administering ATB tests. The regulations took effect
July 1, 1996. On October 25, 1996, the Department published the
first list of approved tests under the new rules in a Federal Register
notice. See pages 2-12 and 2-13 for a list of newly approved tests. To
be sure that you have a comprehensive up-to-date list, you may call
the Customer Support at 1-800-433-7327 for information on tests
approved after this publication went to print.

[[34 CFR 668.148]]
If it chooses to do so, a school may use more than one of the tests on
the list to determine whether an ATB student is eligible to receive
SFA program funds. Note that, in general, the transitional rule
initiated for the 1996-97 award year and described in the 1996-97
handbook no longer applies. Schools should now be using tests from
the new list. However, there are some areas in which there are no
"new" approved tests; in these cases schools can still use the old
approved tests until 60 days after the Department publishes the name
and score of the new test. Specifically, the regulations contain
additional provisions for approving tests for students whose native
language is not English and who are not fluent in English and for
students who have disabilities; no such tests have been approved. In
such cases schools should make ATB eligibility determinations
based on guidelines stated in the December, 30, 1992 Federal
Register and by using tests approved as of June 30, 1996.

[[Prior determination--34 CFR 668.155(b)]]
If a school properly determined that a student had the ability to
benefit under a test approved as of June 30, 1996 (see the 1996-97
Federal Student Financial Aid Handbook for a comprehensive list),
the school does not have to redetermine the student's eligibility under
a newly approved test.

[[Test approval]]
The regulations address both approval and administrative procedures
for test publishers. The Department evaluates the submitted tests
according to the regulatory guidelines.

The Department will also review all state tests or assessments that are
submitted for approval. If a state test meets the criteria for approval,
both public and private schools in that state may use the test. Note
that no such tests have yet been submitted.

To apply for approval, the test publisher must submit its test and
certain documentation specified in the regulations. After receiving an
application, the Department will notify the test publisher of approval
or disapproval. If a test is approved, the Department will then publish
in the Federal Register the name of the test and the test publisher and
the passing score required for students taking the test.

The passing score will be one full standard deviation below the mean
for students who earned high school diplomas and who took the test
within three years of the date on which the test is submitted to the
Department. The minimum passing score for each approved test was
published in the Federal Register on October 25, 1996 and March 7,

[[Testing procedures--34 CFR 668.151]]
The regulations also specify testing procedures school must follow.
The school should make arrangements with one or more parties to
administer the approved tests to students. Effective July 1, 1996, the
regulations require that the test administrator be certified by the test
publisher. The school should contact the test publisher to locate a
certified test administrator. Certified administrators may come from
various occupations. They may include but are not limited to people
in these fields:

- high school guidance counselors;

- qualified professional educators;

- regional and area Armed Forces Commands staff who are experts
in education, training, and human resource development;

- test and measurement experts; and

- human resource development professionals.

[[Independent administration]]
An approved test must be independently administered. To be
independently administered, the test must be given by an individual
or by an organization with no current or prior financial or ownership
interest in the school, its affiliates, or its parent corporation other
than the interest generated through its agreement to administer the
approved test. The test may not be given by a current or former
employee, consultant, or student of the school, an owner or member
of the board of directors, a person with a financial interest in the
school, or a relative of any of these individuals. In addition, the test
administrator cannot score the test, but must submit it to the
publisher for scoring.

Following is a listing of the eight approved ability-to-benefit (ATB)
tests and the publishers of these tests. The list is based on
information originally printed in the Federal Register on October 25,
1996. Call ED's Customer Service number at 1-800-433-7327 for
information on tests approved after this publication went to print.

- ASSET Program: Basic Skills Tests (Reading, Writing, and
Numerical Skills): Forms B2 or C2. Approved passing scores:
Reading (34), Writing (34) , Numerical Skills (33). Used primarily
by community/technical colleges. Paper/pencil testing. Hand score
or computer score.

Publisher: American College Testing (ACT)
Placement Assessment Programs
2201 North Dodge Street
P.O. Box 168
Iowa City, Iowa 52243

Phone: 319-337-1054

- Career Programs Assessment (CPAt) Basic Skills Subtests
(Language Usage, Reading, and Numerical Skills): Forms A, B, or
C. Approved passing scores: Language Usage (43), Reading (44),
Numerical Skills (42). Used primarily by proprietary career
schools and colleges. Paper/pencil testing. Hand score only.

(Publisher: American College Testing [ACT]. See information in
prior listing.)

- COMPASS Subtests: Prealgebra/Numerical Skills Placement,
Reading Placement, and Writing Placement. Approved passing
scores: Prealgebra/Numerical Skills Placement (21), Reading
Placement (60), and Writing Placement (31). Used primarily by
community/technical colleges and 4-year colleges and universities.
Computer testing only/computer scoring only.

(Publisher: American College Testing [ACT]. See contact
information above.)

- Computerized Placement Tests (CPTs)/ACCUPLACER (Reading
Comprehension, Sentence Skills, and Arithmetic). Approved
passing scores: Reading Comprehension (52), Sentence Skills
(60), and Arithmetic (36).

Publisher: The College Board
45 Columbus Avenue
New York, NY 10023-6992

Phone: 212-713-8000

- Descriptive Tests: Descriptive Tests of Language Skills (DTLS)
[Reading Comprehension; Sentence Structure or Conventions of
Written English]: Forms M-K-3KDT and M-K-3LDT; and
Descriptive Tests of Mathematical Skills (DTMS) [Arithmetic]:
Forms M-K-3KDT and M-K-3LDT. Reading Comprehension
(108); Sentence Structure (9) or Conventions of Written English
(309), and Arithmetic (506).

(Publisher: The College Board: See prior listing.)

- Test of Adult Basic Education (TABE) [Reading Total, Total
Mathematics, Total Language]: Forms 5 and 6, Level A, Survey
Versionand Complete Battery Version. Approved passing
scores: Reading Total (768), Total Mathematics (783), Total
Language (714).

Publisher: CTB/McGraw Hill
20 Ryan Ranch Road
Monterey, CA 93940-5703
Phone: 408-393-7197

- Test of Adult Basic Education (TABE) [Reading, Total
Mathematics, Language]: Forms 7 and 8, Level A, Survey
Version and Complete Battery Version. Approved passing scores:
Reading (559), Total Mathematics (562), Language (545).

(Publisher: CTB/McGraw Hill. See contact information above.)

[[Administration by assessment center]]
A test is also considered to be independently administered if it is
given at an assessment center. An assessment center is located at an
eligible degree-granting school or public vocational institution, and
is responsible for evaluating students for multiple purposes, such as
course placement. It must not have administering ATB tests as its
primary purpose. The assessment center must be staffed by
professionally trained personnel and be independent of the
admissions and financial aid process. An assessment center may
score students' tests, unless its agreement with the test publisher
prohibits it.

[[Test selection]]
When selecting a test, the school should consider the following

Are the skills and abilities assessed important for the successful
completion of the student's planned program of study?

LEVEL OF DIFFICULTY OF THE TEST. Is the overall level of
difficulty appropriate to the population of prospective students
being assessed and to the coursework required in the program?

NATIVE LANGUAGE. If the student's program will be taught in
a language other than English, the student should be permitted to
take the test in the language of the program. (See the "Exception"
to test selection and administration that follows.)

Students with physical disabilities should receive appropriate
assistance in test taking, in accordance with the guidelines
developed by the American Educational Research Association,
the American Psychological Association, and the National
Council of Measurement in Education.

[[Students with special needs--34 CFR 668.153]]
The regulations take into account the special needs of students with
documented disabilities and students who are not native speakers of
English. Under certain circumstances, special testing procedures or
instruments may be used for testing such individuals. For students
whose native language is not English, the school must use one of the
approved tests listed on the previous pages if a student enrolls in a
program taught in English without an English as a Second Language
(ESL) component or if the student does not enroll in an offered ESL
component. Otherwise, the school may use a test approved in the
student's native language or an ESL test, as appropriate, once such a
test is approved. As noted previously, no tests for those purposes or
for students with disabilities has yet been approved. Therefore,
schools may continue to use the previous tests and procedures until
60 days after the Department publishes the name and score of new
approved tests in the Federal Register.

[[Proper administration]]
All tests must be administered in accordance with the procedures
specified by the test publisher. Such procedures address, but are not
limited to, time limits for completion, rules on how often and within
what time frame the test may be readministered, whether the test may
be given verbally, and so on. If a test comprises multiple parts, all
RELEVANT parts must be administered in order for the test to be
valid. The approval notice published by the Department will show
either the approved score for each subpart or an approved composite

[[Duration of test results]]
A student who has taken an approved, independently administered
test within the last 12 months may submit the official test-score
notification to the school to demonstrate his or her ability to benefit.
If the school accepts the results of a previously administered test, that
school must obtain documentation showing that the test and its
administration meet federal requirements. If a student withdraws
from school and then re-enrolls more than 12 months after taking the
test, he or she must be retested, unless he or she now has a high
school diploma or equivalent.

[[Retroactive eligibility]]
A student may be eligible for SFA funds for a period beginning
before he or she passed an ATB test. If the student becomes eligible
by passing an approved ATB test after he or she has begun
attendance, the student is eligible for Pell Grant and campus-based
funds beginning with the payment period (usually an academic term)
during which the student passed the ATB test. The student would
also be eligible for a Direct Loan or FFEL for the entire period of
enrollment (usually an academic year) in which the student passed
the ATB test.

[[Access to GED programs]]
In addition to assuring that students who do not have high school
diplomas (or recognized equivalents) successfully pass ability-to-
benefit tests, the school must make a GED-preparatory program
available to such students. Note that the requirement to make the
GED programs available is stated in the school's Program
Participation Agreement. See Chapter 3, Section 1.


Remedial coursework prepares a student for study at the
postsecondary level. If a student is enrolled solely in a remedial
program, the student is not considered to be in an eligible program
and thus is not eligible for SFA funds. Additionally, if a student's
acceptance into the eligible program is contingent upon the
completion of the remedial work, the student cannot be considered to
be enrolled in the eligible program until the remedial work is
completed. The one exception, for the FFEL and Direct Loan
programs only, is enrollment in preparatory coursework, which may
be remedial in nature (see page 2-8).

A student may receive SFA funds for a limited amount of noncredit
or reduced-credit remedial coursework that is included in a regular
program. The remedial coursework must be at least at the high-
school level, as determined by the state legal authority, the school's
accrediting agency, or the state agency recognized for approving
public postsecondary vocational education.

[[Enrollment status]]
Determining the enrollment status for students taking remedial
coursework may be problematic because schools either may give no
credit or may give reduced credit for such coursework. However,
because there is a credit or clock-hour limit on the amount of
remedial coursework for which the student can be paid, the school
must be able determine how many credit or clock-hours of such
coursework the student is enrolled in. In addition, the student's
enrollment status affects the amount he or she can receive under the
Pell Grant Program and whether he or she is eligible for loans under
the FFEL and Direct Loan programs.

To include noncredit remedial hours in the student's enrollment
status for financial aid payments, a school must determine the
number of hours of study that the remedial course requires (both
classroom and homework hours) and must compare that number with
the hours required for similar nonremedial courses. For determining
a student's enrollment status, the school should use the same number
of credits for the remedial course as for a nonremedial course.
(Clock-hour schools should use the number of classroom hours
attended in the remedial program.)

[[Limitation on hours]]
To determine a student's enrollment status, a school should add the
credits or clock hours assigned to the noncredit course to the credits
or clock hours of regular coursework. A school may not take into
account more than one academic year's worth (30 semester or
trimester hours, 45 quarter credit hours, or 900 clock hours) of
noncredit remedial coursework for a student. ESL courses do not
count against these limits.

In addition, the school should include in the student's cost of
attendance tuition paid for noncredit remedial work that is counted in
the student's enrollment status.

[[High school coursework excluded]]
A school cannot count noncredit remedial hours when determining
enrollment status or cost of attendance if the noncredit remedial
course is part of a program that leads to a high school diploma or its
recognized equivalent. A student is never permitted to receive funds
for GED training or for high school, even if the GED or high school
training is offered at postsecondary schools. These noncredit
remedial hours must not be counted, even if the course is required for
completing the postsecondary program. A postsecondary student is
NOT permitted to receive SFA funds while he or she is
simultaneously enrolled in an elementary or secondary school. For
example, a high school student who is taking vocational training in
the afternoon or weekends is not eligible for SFA funds even if his or
her entire program at the postsecondary school is postsecondary in


Half-time enrollment status is not a minimum requirement for
receiving Pell Grants and campus-based funds. Enrollment status
may affect how much a student receives under Pell. (See Chapter 4
for information on how enrollment status affects a student's Pell
Grant award.)

[[Minimum enrollment]]
The FFEL and Direct Loan programs DO require a student to be
enrolled at least half time to receive aid. A half-time student must be
taking at least half of the course load as that of a full-time student.
(See Chapter 10 for more information on the FFEL Program, and
Chapter 11 for more information on Direct Loans.)

[[Definition of full-time--34 CFR 668.2]]
As specified in the regulations, schools define the full-time
workload, subject to certain minimums. This measurement may
differ from the definition used for other purposes at the school, such
as the definition used by the registrar's office. The school's definition
of a full-time workload for a program must be used for all students
enrolled in that program and must be the same definition for all SFA-
related purposes, including loan deferments.

A full-time student is a student who is carrying a full-time academic
workload. The school may include any combination of courses,
work, research, or special studies in its definition of workload. For
undergraduate students--but not for graduate students--the school
must define full-time status to meet at least the following minimums:

- 12 semester hours or 12 quarter hours per academic term in an
educational program using a semester, trimester, or quarter

- 24 semester hours or 36 quarter hours per academic year for an
educational program using credit hours but not using a semester,
trimester, or quarter system, or the prorated equivalent for a
program of less than one academic year;

- 24 clock hours per week for an educational program using clock

- for a student who is taking a combination of courses offered in
semester credit, quarter credit, and/or clock hours, prorated
percentages of the minimums for credit- and clock-hour
measurements equal to at least one;


The student is at a school that uses academic terms. For the first
term, the student is taking 6 semester hours and 3 quarter hours
and is also taking 9 clock hours per week. To determine if the
student is full time, divide each type of hour by the minimum
requirement for full time and then add the fractions:

6/12 + 3/12 + 9/24 = .5 + .25 + .375 = 1.125

Because the result is greater than or equal to one, this student
would be considered full time.

- a series of courses or seminars equaling 12 semester or quarter
hours over a maximum of 18 weeks; or

- the work portion of a cooperative education program in which the
amount of work performed is equivalent to the academic workload
of a full-time student.

A student taking only correspondence courses is never considered to
be enrolled more than half time.

[[Enrollment status and deferment]]
Note that a student's enrollment status also is important for deferment
purposes. A borrower is eligible for a deferment as a half-time
student if 1) he or she is a Direct Loan borrower or 2) if he or she is a
FFEL borrower who received loans on or after July 1, 1993 and had
no outstanding balance on a FFEL borrowed before July 1, 1993.
Certain other FFEL borrowers may need to be enrolled full time to
receive an in-school deferment (see Chapter 10).


Every school participating in the SFA Programs must monitor its
SFA recipients to ensure that they are meeting satisfactory progress
standards. Each school must develop reasonable standards for
measuring academic progress, which must contain elements specified
in the regulations.

[[Qualitative and quantitative measurements]]
A school's satisfactory progress policy for students receiving SFA
funds must be at least as strict as the policy used for students who do
not receive SFA funds. The policy must be applied consistently to all
SFA recipients within identifiable categories of students (such as
full-time or part-time, graduate, or undergraduate students). Note that
the school's satisfactory progress policy must include both a
qualitative measure (such as the use of cumulative grade point
average) and a quantitative measure (such as a maximum time frame
for completion) of the student's progress.

[[Minimum qualitative standards]]
Although a school may establish its own satisfactory progress
standards, these standards must at least meet the minimums required
by law and regulations. For the qualitative standard, the law specifies
that by the end of the second academic year (measured as a period of
time, not by the student's grade level), the student must, in general,
1) have a C average or its equivalent, or 2) have an academic
standing consistent with the requirement for graduation from the
program. If a school does not use letter grades, a school's satisfactory
progress policy should define "equivalent of a C average." If a school
determines that a student has maintained satisfactory progress
standards even though his or her average falls below a C average, the
school must be able to document that the student's average is
consistent with the academic standards required for graduation.

[[Graduated qualitative standards]]
Rather than using a single fixed standard throughout the program, a
school may use a graduated grade point requirement. For instance, a
school may set a minimum grade point average (GPA) of 1.75 (on a
scale of 0.0 to 4.0) at the end of the second academic year in a four-
year degree program. The school may also require that a student earn
at least a 2.0 average in order to graduate. If school policy permits
progression toward the 2.0 graduation requirement, the school may
permit a lower standard at the end of the second academic year.

The GPA is not by itself a sufficient measure of progress. Consider
this situation: A student initially enrolls for 12 credits per semester
but then withdraws from two classes that he or she was failing.
Although the student may have an A average in the two classes from
which he or she did not withdraw, that student may not be
progressing toward graduation at an acceptable pace. To accurately
measure a student's progress in a program, the satisfactory progress
policy must also include a quantitative measure to determine the
number or percentage of courses, credit hours, or clock hours

[[Minimum quantitative standards--34 CFR 668.16(e)]]
To quantify academic progress, a school must set a maximum time
frame in which a student is expected to finish a program. For an
undergraduate program, the maximum time frame may not exceed
150% of the published length of the program measured in academic
years, academic terms, credit hours attempted, or clock hours
completed, as appropriate. For instance, if the published length of an
academic program is 120 credit hours, the maximum time frame
established by the school must not exceed 180 attempted credit hours
(that is, 120 x 1.5).

[[Increments (evaluation periods)]]
To ensure that a student is making sufficient progress throughout the
course of study, the school must divide the program into EQUAL
evaluation periods called increments. An increment may not be
longer than half the program or one academic year, whichever is less.

In other words, for a school's 700-hour program, an increment must
not exceed 350 hours. For a school's 2,000-hour program, an
increment must not exceed 900 hours if the school uses a 900-hour
academic year definition. Increments are also expected to coincide
with payment periods.

Once a school defines the length of each increment, the school must
compare the number of hours the student attempted with the number
of hours the student successfully completed. This calculation enables
the school to determine whether the student is progressing at a rate
that will allow him or her to finish the program within the maximum
time frame.

Quantitative progress example

A school that offers a 4-year program and determines the
maximum time frame based on academic years could allow
students 6 academic years to complete the program. Edison
College decides to allow students a maximum time frame of 5
academic years of work for its 4-year microbiology program.

Two students, Andrew and Malia, are enrolled in this 4-year
microbiology program. The program requires 120 semester
credits for graduation. Under the school's policy, the maximum
time frame for completing the program is 150 credit hours (5
academic years of work). Both students enroll in 5 classes each
semester (15 credits per semester). After one year, Andrew has
earned 27 credits and Malia has earned 30 credits. After two years,
Andrew has earned 45 credits and Malia has earned 51 credits. Are
Andrew and Malia making satisfactory progress in their course of


Because the school has set a maximum time frame of 150 semester
hours to complete a 120-semester-hour program, a student must
successfully complete 80% of the work attempted to be making
satisfactory progress (120 ΒΈ 150 = .8).

Both Andrew and Malia attempted 30 credit hours in the first year.

80% x 30 credit hours attempted = 24 credit hours

Because both students successfully completed at least 24 credit
hours in their first year, they both were making satisfactory
progress when entering their second year of study.

After their second year of study, in order to be considered to be
making satisfactory progress, they must have successfully
completed 80% of 60 credit hours.

80% x 60 credit hours attempted = 48 credit hours

Therefore, Malia was making satisfactory progress because she
had completed 51 credits, but Andrew was not because he had
earned only 45 credits.

In the preceding example, the school established a minimum
percentage of hours the student must complete each academic year.
By setting a percentage rather than a fixed number of hours or credits
that must be completed each academic year, the school can easily
adjust for changes in a student's enrollment status from one period to
the next. For instance, if in the second year, Andrew enrolled for
only 15 credit hours, his progress would be measured as follows:

80% x 45 credits attempted (30 in first = 36 credits
year and 15 in second)

If Andrew successfully completed 9 of the 15 credits attempted in
the second year, he would be considered to be making satisfactory
progress (27 completed in the first year + 9 in the second equals 36
credits, the minimum that must be completed to achieve an 80%
completion ratio).

[[Graduated quantitative standards]]
A school may use a graduated completion percentage for each year
of enrollment. For instance, a school might choose to apply a more
lenient completion standard in the student's first academic year but
may gradually increase the completion standard during the course of
study to ensure that the student completes program requirements
within the maximum time frame.

[[The graphic on page 2-21 is currently unavailable for viewing on
the SFA BBS. Please reference your paper document or download
the pdf files for additional information.]]

[[Credit for all hours attempted.]]
At some schools (mainly clock-hour schools), a student is given
credit for every hour attended, so that the hours attempted equal the
hours earned. In such cases, the quantitative standard must be based
on calendar time (in weeks or months). For instance, if a school
offers a 900-clock-hour program that normally takes 8 months to
complete, the school might set a maximum time frame of 12 months
for completing the program. Therefore, a student would have to
complete the first 450 hours of the program within 6 months to
establish that he or she is meeting satisfactory progress standards.

[[Additional elements]]
A school's satisfactory progress policy must explain how
withdrawals, grades of "incomplete," courses that are repeated, and
noncredit remedial coursework affect the academic progress
determination. A school must also establish procedures that enable
the student to appeal a determination that finds him or her NOT to be
making satisfactory progress. For students ultimately judged not to
be making satisfactory progress, the school must establish specific
procedures that enable such students to once again meet satisfactory
progress standards.

[[Standards must be cumulative]]
The quantitative and qualitative standards used to judge academic
progress must be cumulative and must include all periods of the
student's enrollment. Even periods in which the student did not
receive SFA funds must be counted. Transfer credit hours must be
counted as well, so that transfer students are not given more time
than other students in meeting satisfactory progress standards. A
school cannot set a maximum time frame based on hours attempted
and then have a policy to routinely exclude certain hours attempted,
such as hours taken during a summer session, from its determinations
of satisfactory academic progress.

Bear in mind that as a rule, the Department does not regulate schools'
satisfactory progress standards. Other than the minimum qualitative
standard set by law and the minimum quantitative standard provided
in regulations, the Department only stipulates policy components--
not academic standards.

[[Loss of eligibility]]
If a student does not meet the school's standards of satisfactory
progress, he or she is not allowed to receive further aid from the SFA
Programs unless the school uses its discretion to set aside the
requirement because of mitigating circumstances. The statute
specifies cases in which the school might choose to set aside the
standards: for example, if a student becomes very ill, if a student is
severely injured, or if a student's relative dies. Schools that permit
waivers of satisfactory progress standards must establish written
procedures explaining when a special circumstance merits a waiver.

[[Payment after reinstatement]]
If a student loses SFA eligibility because he or she is determined not
to be making satisfactory progress, that student will regain eligibility
when the school determines that he or she is again meeting its
satisfactory progress standards. A student may be paid Pell Grant and
campus-based funds for the payment period in which he or she
regains satisfactory progress but cannot be paid for any payment
period in which the standards were not met. (The school must
document each case.) For FFELs and Direct Loans, a student who
does not meet satisfactory academic progress standards at the
beginning of a period of enrollment but who meets the standards
later in that period is eligible for the entire period of enrollment
(usually an academic year) in which he or she met the satisfactory
academic progress standards--unless school policy provides for
reinstatement of eligibility at a later point.

*1* In the case of a school with branch campuses, the process must
have been approved by the state in which the branch the student is
attending is located.

Section 1: Student Eligibility
Pages 2-23 to 2-38


A person generally is not eligible for SFA funds if he or she is in
default on an SFA loan or must repay an SFA grant. This ineligibility
rule also applies to a parent seeking a PLUS Loan (through the FFEL
or the Direct Loan program). For a parent to receive a PLUS Loan,
neither the parent nor the student may be in default or owe an
overpayment through the SFA Programs. (The General Provisions
regulations contain several exceptions to these blanket rules on
defaults and overpayments, as noted in the discussion below.)

Additionally, a student's property must not be subject to a judgment
lien for a debt owed to the United States. For example, if the Internal
Revenue Service (IRS) had placed a lien on a student's property, the
failure to pay this debt or to make satisfactory arrangements for
repayment would render the student ineligible for SFA funds. A
parent cannot receive a PLUS Loan if either the student or the parent
has property subject to a judgment lien for a debt owed to the United

Any student applying for SFA funds must certify that he or she is not
in default on any SFA loan and that he or she does not owe an
overpayment on any SFA grant, or that he or she has made
satisfactory arrangements to repay the overpayment or default. The
"Certification Statement on Overpayments and Defaults" is printed
on the FAFSA.

[[NSLDS Database]]
[[Schools must resolve discrepancies]]
The National Student Loan Data System (NSLDS) contains student
financial aid information from guaranty agencies, lenders, schools,
and the Department. To help schools determine if a student is in
default or owes a repayment, the CPS matches application with the
NSLDS database. (For more information on the NSLDS match, see
Section 2.) Remember that a school is responsible for reconciling all
information it receives about a student before disbursing aid.
Therefore, schools are required to resolve any conflicts between the
NSLDS information and information received from the student. For
example, if the NSLDS indicates that a student is not in default but
the school has documentation indicating that the student is in default,
the school must resolve this conflict before disbursing federal student

Loan Defaults

[[Repaid in full]]
After a student who is in default on an SFA loan repays the loan in
full, that student may receive SFA funds as long as he or she meets
all other necessary eligibility requirements. SFA loans include
Federal Perkins Loans (including NDSL), FISLs, Federal Stafford
Loans, Federal Direct Loans, Federal SLS,*2* Income Contingent
Loans (ICL), Federal Consolidation Loans, Federal Direct
Consolidation Loans, Federal PLUS Loans and Federal Direct PLUS
Loans. If the student borrower and the loan holder agree on a
compromised amount for settling a loan and the student repays the
amount agreed upon, that student may receive SFA funds.

The student regains eligibility whether repayment was completed
voluntarily or otherwise (that is, through IRS offset or wage
garnishment). Please note that if a student has repaid his or her
defaulted loan in full, the school may still consider the prior default
to be evidence of a student's unwillingness to repay loans and may
therefore deny him or her future Perkins Loans.

[[Satisfactory repayment arrangements]]
A student in default on an SFA loan may continue to receive SFA
funds if he or she has made satisfactory repayment arrangements
with the loan holder. The student must make arrangements that are
satisfactory to the loan holder and that are in accordance with the
individual SFA loan program regulations. After the student makes
six consecutive, full, voluntary payments on time, he or she regains
eligibility for SFA funds. As of July 1, 1996, this six-payment
requirement also applies to defaulted Perkins Loans and NDSLs.

Before a school may pay the student, it must have documentation
that the student has made satisfactory repayment arrangements. For
example, the lender may update the code for the loan in NSLDS to
DX once six payments have been made; the school could then use
the NSLDS information as confirmation of the repayment
arrangement. The school may also use a written statement from the
loan holder indicating that the student has made satisfactory
repayment arrangements as documentation of the arrangement.

A student who regains eligibility after making six consecutive
payments on a defaulted SFA loan is eligible for a new FFEL or
Direct Loan for the entire enrollment period in which eligibility was
regained (which may be a full academic year or an academic term).
Note that the enrollment period cannot include periods that are part
of an academic year previous to the one in which the student
regained eligibility. If an enrollment period begins in one academic
year and ends in the following academic year and if the borrower
regains eligibility during the second academic year, the school may
award a loan only for that portion of the enrollment period that is
part of the second academic year.

Although a student regains eligibility for all SFA funds after making
six payments, the loan is still in default. After further payments, the
loan may be rehabilitated (that is, it will no longer be in default), and
the student will be eligible for all the normal loan benefits, such as
deferments. A student with a FFEL cannot have his or her loan
rehabilitated (assuming the lender agrees to rehabilitate) until 12
consecutive, full, voluntary payments have been made on time. (See
Chapter 10.) A defaulted Direct Loan will automatically be
rehabilitated after 12 consecutive, full, voluntary payments have
been made on time. (See Chapter 11.) A Perkins Loan or an NDSL
will be rehabilitated after the borrower executes a new written
repayment agreement and makes one payment for each month for 12
consecutive months.

If a student has paid a defaulted loan in full but receives an output
document with a comment indicating that he or she is ineligible
because of the default, the student must provide the school with
documentation proving that the loan has been paid in full.


[[School error]]
[[Student error]]
If a student receives a Pell Grant overpayment, he or she is permitted
to continue to receive SFA funds if the overpayment can be
eliminated by reducing the subsequent Pell Grant payments for the
same award year. A student who receives an overpayment through
the FSEOG, SSIG, or Perkins Loan program may continue to receive
SFA funds if the overpayment can be eliminated by adjusting
subsequent financial aid payments (other than Pell Grants) within the
same award year. If the overpayment was the result of the school's
error and the school cannot eliminate the overpayment in the same
award year, the school must repay the overpayment; the student is
then not considered to owe an overpayment and may receive SFA
funds. If a student's error caused the overpayment, the student is
responsible for repaying the overpayment. The student cannot
receive additional SFA funds until he or she repays the overpayment
in full or makes satisfactory arrangements to repay the

[[Optional school repayment]]
If the student is responsible for repaying the overpayment, the school
may, if it chooses, make the repayment for the student (that is, the
school can return to the program accounts the amount overpaid to the
student). When a school makes such a repayment on the student's
behalf, the student is no longer considered to owe an overpayment.
Instead, the student owes an institutional debt which the school can
collect according to its own procedures. Because the student does not
owe an overpayment, he or she is eligible for SFA funds as long as
all other eligibility criteria are met

[[School must attempt to collect]]
The school must make attempts to collect overpayments that have
not been repaid from its students. If a school is unable to recover a
Pell Grant or FSEOG overpayment from the student for which the
student is liable, the school must report the student's overpayment to
the Department. (See Chapter 4, Section 6 and Chapter 5, Section 2
for more information.) After this information is reported, the
student's future output documents will be flagged for resolution when
his or her FAFSA is received by the CPS. Since 1996-97, Pell Grant
and FSEOG overpayments reported to the Department's Debt
Collection Service (DCS) have been incorporated into the NSLDS
for flagging and tracking purposes. The NSLDS Financial Aid
History will indicate that a student has a reported overpayment. In
addition, the student's output document will have a comment stating
that the student is ineligible for SFA funds until the overpayment is
repaid, and a "C"--indicating that the school must resolve the issue
before payment is made--will be printed next to the EFC reported on
the output document.


[[Reaffirmation not required]]
A student with an SFA loan discharged in bankruptcy is eligible for
SFA grants, work-study, and loans. Prior to October 22, 1994, a
student whose defaulted loan was discharged in bankruptcy could not
receive loan funds unless the student reaffirmed the discharged debt
and made satisfactory repayment arrangements. Because of changes
made by the Bankruptcy Reform Act of 1994, students are no longer
required to reaffirm discharged loans before receiving new loans.

[[Loans stayed in bankruptcy]]
In addition, if a student includes an SFA loan in a bankruptcy claim,
so that collection on the loan is stayed, the student remains eligible
for SFA funds as long as he or she has no loans in default (including
the stayed loan) and as long as all other eligibility requirements are
met. For more information on loan status and eligibility, see the chart
on the next page.


A borrower whose loan is canceled because of total and permanent
disability may later receive any type of SFA funds if he or she meets
all other eligibility requirements. If such a borrower wishes to take
out an SFA loan, he or she must obtain certification from a legally
licensed physician stating that the student's condition has improved
and that the student 1) has the ability to engage in substantial gainful
activity or 2) can attend school. Then the student must sign a
statement indicating that he or she is aware that his or her new SFA
loan cannot later be canceled on the basis of any present impairment
unless that condition substantially deteriorates to the extent that the
definition of total and permanent disability is again met. The
borrower is not required to obtain a physician's certification or to
sign the aforementioned statement if the borrower is applying for an
SFA grant or work-study only.

[[The chart "Effect of Loan Status on Student Aid Eligibility" on
page 2-27 is currently unavailable for viewing on the SFA BBS.
Please reference your paper document or download the pdf files for
additional information.]]


[[SSNs required]]
To be eligible to receive SFA funds, each student must provide a
Social Security Number (SSN). The Social Security Administration
(SSA) and the CPS work together to conduct matches that verify that
the given student's SSN is correct and that the SSN corresponds to
the given student's name and birth date.

[[Successful match]]
As is the case for the SSA citizenship match, no comment is
provided on the output document when the SSN match is successful.
A match flag of "4" will be provided in the FAA Information Section
for a successful match. If the school discovers that a matched SSN is
incorrect or discovers conflicting information about the student's
SSN, the school must resolve the conflict before disbursing SFA
funds to the student.

[[Discrepancy on date of birth]]
If a student's name and SSN match but the SSA shows a different
date of birth, a comment stating that the date of birth is inconsistent
will appear on the student's output document (Comment 60). The
school should resolve the discrepancy with the student. In such a
case, no further action is REQUIRED through the CPS. However, if
the student's reported date of birth is incorrect, the student or school
can submit a correction. Note that beginning in 1997-98, the
student's application will be rejected if the year of birth is mistakenly
reported to be the current year. In this case, the student MUST
submit a correction before he or she can receive aid.

[[Discrepancy on name]]
If the SSN and the date of birth match but there is a discrepancy
regarding the student's name, the student will receive a comment on
the output document telling the student either to correct the
appropriate items or to contact the SSA to resolve the problem
(Comment 61). This situation is most likely to occur when a student
has used a nickname on the application or when a student has failed
to inform the SSA of a name change (from marriage, for instance).
The school may disburse funds if the student provides documentation
explaining the discrepancy, and shows that the submitted SSN is
correct; the application does not need to be resubmitted to the CPS.
However, the student should submit a correction to the CPS if the
name he or she reported is not correct. The student MUST submit a
correction if the reported SSN is not correct. If both the reported
name and SSN are correct, the student may wish to contact SSA so it
can correct its records. Comment 61 will be printed only on the
original output document, not on subsequent output documents.

[[SSN invalid]]
If the SSN does not match, the student's application will be rejected.
The student will receive a comment that instructs the student to
correct his or her SSN or contact SSA if he or she believes the SSN
reported is correct (Comment 24). The student will only receive this
comment if the SSN he or she reported does not exist in the SSA
database. If the SSN is correct, the student must follow up with a
local or regional SSA office to update the SSA database; the student
must report his or her correct number to the SSA and provide
documentation verifying the correct number. The student must
contact an SSA office directly. The SSA database is updated daily
with information from local and regional offices. Once the SSA
database is updated, the student may submit the SSN again as a
correction, and the CPS will match again with SSA. Note that the
student is no longer allowed to simply verify that the SSN is correct;
the application will be rejected until the SSA database is updated.

If the student's application is rejected because he or she reported an
incorrect SSN, the student should submit a correction to have the
new (correct) SSN matched again with the SSA.

[[No match due to insufficient information]]
If the application is missing either the last name or the date of birth,
no match with SSA will be conducted, and the student's application
will be rejected. The CPS will check to see whether the reported SSN
falls within a valid range. If it does, the student will receive a
comment explaining that the match could not be conducted without
the name or date of birth and telling the student to correct those items
(Comment 59). The student must submit a correction providing the
missing information. When the correction is sent, the information
will be sent to SSA for matching, and the school should check the
new output document for match results. If the SSN does not fall
within a valid range, the student will receive a comment stating that
the reported SSN does not appear to be valid (Comment 23). In
addition to submitting the missing name or date of birth on a
correction, the student must either contact SSA to correct its records
(if the reported SSN is correct) or correct the SSN he or she reported.
Again, the school should check the new output document for match

[[No match due to processing problems]]
If no match was conducted due to processing problems, the CPS will
check to see whether the reported SSN falls within a valid range. If it
does, the student will receive a comment telling the student to
provide proof to the school that the SSN is correct (Comment 58). If
the student does provide documentation to the school, he or she can
receive aid without resubmitting the data. Note that if the student
makes other corrections, the SSA match will be attempted again, and
the school should check the results of that match.

If there was no match because of processing problems and the SSN
does not fall within a valid range, the student's application will be
rejected. The output document will have a comment stating that the
SSN does not appear to be valid (Comment 23). The student must
correct the SSN (if it is wrong) and resubmit the SAR, or contact
SSA to have it correct its records. In either case, the student must
submit a correction so that the application will pass through the SSN

Note that once a student's SSN is confirmed, and there is no
discrepancy on the name or date of birth, the student cannot change
the SSN. If a student tries to correct a confirmed SSN, he or she
receives a comment explaining that the SSN has been verified, and
directing the student to contact the school for further assistance. If
the student used a wrong SSN, but it was confirmed by SSA, the
student will need to file a new application with the correct SSN,
instead of making a correction. In certain circumstances, a student
may need to use a correction application to correct the problem.

[[Correction applications]]
Correction applications are very rarely needed. They may be used in
certain cases where two students reported the same SSN. A problem
is likely to arise when spouses or siblings with similar names report
the same SSN by mistake. In such a case, both applicants would be
assigned the same record identifier, made up of the SSN and the first
two letters of the applicant's last name. The shared number will cause
problems for both applicants in the CPS and in the Pell disbursement
system. The student using the correct SSN must submit a Correction
Application, which will generate a new transaction for his or her
record identifier but which will provide his own application data
instead of carrying the data of the other student (with the wrong
SSN) over. The student who reported the wrong SSN must refile a
new FAFSA in order to change the SSN and the record identifier.
The school can also submit the student's correct data through
EDExpress, but must submit it as an original application, not an ISIR
correction. A correction will not give the student a nonduplicated
record identifier.

Both students should keep copies of all the output documents,
including those from the first FAFSAs filed. When the students file
the Correction Application or a new FAFSA, the application receipt
date is changed. Because some schools and agencies use this receipt
date to determine if the student met a deadline, the students should
keep the output documents to show the original receipt date and to
show why a second (and later) application was necessary.

A financial aid administrator who needs to receive a 1997-98
Correction Application should contact the Department's Application
and Pell Processing Systems Division and ask for the Correction
Application Coordinator. The telephone number is 1-202-260-9988.
The Department will determine case by case if a Correction
Application is necessary. If a Correction Application is necessary,
the financial aid administrator may request that it be mailed either to
the school or to the student.

[[Exception to the SSN requirement]]
Students from the Republic of the Marshall Islands, the Federated
States of Micronesia, and the Republic of Palau are not required to
provide SSNs. Students from these areas who do not have SSNs
should send their FAFSAs to the following address--not to the
address on the FAFSAs or on the FAFSA envelopes:

Federal Student Aid Programs
P.O. Box 4010
Mt. Vernon, IL 62864-8610

The Department prefers that schools bundle such applications and
send them as a group. These applications will first be assigned a
special identifying number (in lieu of an SSN) in Item 8 of the
FAFSA and then will be sent to the CPS for regular processing.
These applications are exempt from the SSN match with the SSA.

These students who are not required to have SSNs cannot use
FAFSA Express to apply for SFA funds electronically. These
students may, however, ask their schools to use EDExpress to
transmit the student applications electronically if EDExpress is
available. (See The Counselor's Handbook for more information on
FAFSA Express and EDExpress.)


[[Most males age 18-25 must register]]
Most males from age 18 through 25--including permanent residents
and other eligible noncitizens--are required to register with the
Selective Service System. Anyone required to register with Selective
Service must have done so in order to receive aid through the SFA

Persons exempted from this requirement include:

1. females;*3

2. males currently in the armed services and on active duty (this
exception does not apply to members of the Reserve and National
Guard who are not on active duty);

3. males who are not yet 18 at the time that they complete their
applications (an update is not required during the year, even if a
student turns 18 after completing the application);

4. males born before 1960; and

5. citizens of the Federated States of Micronesia, the Republic of
the Marshall Islands, or the Republic of Palau.

[[Waiver of registration requirement]]
There are certain less common situations in which the registration
requirement is waived. Students who are not required to have already
registered prior to meeting one of these criteria and who meet one of
the criteria for the entire time they are 18 through 25 qualify for the
waiver if

1. they are unable to register due to being hospitalized, incarcerated,
or institutionalized;

2. they are enrolled in any officer procurement program at The
Citadel, North Georgia College, Norwich University, or Virginia
Military Institute;

3. they are commissioned Public Health Service officers on active
duty or members of the Reserve of the Public Health Service; or

4. they are commissioned officers of the National Oceanic and
Atmospheric Administration.

[[School must document student's status]]
If one of these criteria applies to a student--thereby exempting him
from having to register with the Selective Service System--the school
must document the student's status. If the student is not clearly
exempt from the requirement to register, the school should ask the
student to document the exemption by providing the school with a
Status Information Letter from the Selective Service.

[[Registering students]]
[[Comment 29]]
The Department takes several steps to ensure that a student registers
with the Selective Service when required and to provide convenient
ways for the student to register: A student may check Item 105 on
either the FAFSA or the SAR. By checking this item, the student
gives the Department of Education permission to submit his
registration information to the Selective Service so that the student
may be registered.4 As required by the HEA, the Department
matches student aid applications with registration records from the
Selective Service System. If the student's output document displays
Comment 29, "Your registration or your exemption status has been
confirmed by Selective Service," the school should consider the
student in compliance with the requirement by being either registered
or exempt.

If the Selective Service could not confirm the applicant's registration
or if a match was not conducted because of technical reasons, one of
the following five comments will appear. (See Appendix C for the
complete comment text .)

1. Comment 14: The student received aid in a prior year and may
not have registered.

2. Comment 30: The Selective Service reports that the student is not

3. Comment 32: The Selective Service did not conduct a match.

4. Comment 33: The student did not provide enough information
for registration.

5. Comment 37: The Selective Service was unable to complete the
student's registration.

[[Withholding funds]]
Until the registration problem is appropriately resolved, the school
must withhold all SFA funds and must not certify a loan application
for any student who receives any of these comments. Whenever one
of these comments appears, a "C" will appear next to the student's
EFC to alert the financial aid administrator that there is an eligibility
problem that must be resolved before disbursements may be made.

[[Student must submit documentation]]
Unless the financial aid administrator has documentation proving
that a student who receives one of these comments is exempt from
registration, the student must present appropriate confirmation (that
is, his Selective Service Registration Acknowledgement or his letter
of registration) to the financial aid administrator. Otherwise, the
student remains ineligible for SFA funds. If the student does not have
any of these documents, he must reconcile the conflict with the
Selective Service. If the conflict is resolved in the student's favor, the
student will receive a letter from the Selective Service documenting
that he is registered or that he is exempt from registering. Selective
Service provides no letters for females because females are not
required to register.

[[Students who are beyond the permissible age to register]]
In recent years, a number of students have been denied aid because
they failed to register with the Selective Service before their 26th
birthday. (The Selective Service will register only males age 18
through 25, leaving older students with no way to remedy their
situation if they failed to register.) The Military Selective Service Act
was amended to require a school, under certain conditions, to pay
otherwise eligible students who are 26 or older and who did not
register when required. To receive aid, such students must
demonstrate that they did not knowingly and willfully fail to register.
The Department of Education's regulations also allow students who
did not register and are too old to register to receive aid if they
served on active duty in the armed forces. (It is presumed that a
person who has actually served in the armed forces is not trying to
avoid registering for duty.) The financial aid administrator should
obtain such a student's DD Form 214, "Certificate of Release or
Discharge from Active Duty," showing military service in the armed
forces with other than the reserve forces, the Delayed Entry pool, and
the National Guard.

The financial aid administrator must determine whether a student
who has not served in active duty knowingly and willfully failed to
register. That is, the financial aid administrator must determine if the
student knew of the registration requirement but, nevertheless, chose
not to register. The procedures that a financial aid administrator
should use to make this determination follow. The financial aid
administrator's decision is final and cannot be appealed to the
Department of Education.

Unless the financial aid administrator can document that the student
meets one of the allowable exemptions regarding registration or can
document that the student has served in active duty in the armed
forces, the student must first write to the Selective Service so that he
may receive a Status Information Letter addressing his failure to
register. The student should provide as complete a description about
his situation as possible: where he was living during the period when
he should have registered, whether he was incarcerated or
institutionalized, his citizenship status during the period, if
applicable, and so on.

[[Status Information Letters]]
The Selective Service has a number of different types of Status
Information Letters. Copies of the letters are included in Appendix
B. A code appears in the lower left-hand corner to indicate the type
of letter in question. The codes are listed here.

[[General exemption]]
- E1-E7
A letter with any of these codes indicates that the student was not
required to register or was exempt the entire time he could have
registered (ages 18 through 25).

[[DOB before 1960]]
- NR
A letter with this code indicates that the student was born before
1960 and is therefore not required to register.

[[Required; no record of attempt]]
- RR
A letter with this code indicates that the student said he attempted
to register but that Selective Service has no proof that he
attempted to register.

[[Military service: noncontinuous]]
- NM
A letter with this code indicates that the student did not register
although he was on active duty in the armed forces only for a
portion of the time when he could have registered (between ages
18 through 25) and was, therefore, required to register.

[[Required; compliance letter sent]]
- RL
A letter with this code indicates that the student was required to
register, that the Selective Service has no record of his registration,
and that Selective Service records show he was sent one or more
letters requesting his compliance with the registration requirement
during the period he was required to be registered.

[[Required; no valid exemption]]
- RD
A letter with this code indicates that the student provided a reason
for not registering (or provided documentation proving him
exempt from this requirement) but that the Selective Service
determined the reason or documentation to be invalid; therefore,
this code indicates that the student was required to register but did

If the student receives a "general exemption letter" (codes E1-E7) or
a "DOB before 1960" letter (code NR), the student is exempt from
registration and may receive SFA funds. If the student receives any
other type of letter, the school must determine (based on all relevant
evidence) whether the student knowingly and willfully failed to
register. The letter from Selective Service is part of the relevant
evidence. For example, if the student received a letter indicating a
compliance letter had been sent (code RL), this letter would be a
negative factor when the financial aid administrator makes the
determination. If the student received a "Military Service:
Noncontinuous" letter (code NM), the financial aid administrator
may reasonably determine that the student did not knowingly and
willfully avoid registration.

[[Final decision made by school]]
Most of these letters state that the final decision regarding the student
eligibility rests with the agency awarding funds. For the purposes of
the SFA Programs, the decision is made by the financial aid
administrator, who represents the Department. If the school's
financial aid administrator determines that the student's failure to
register was knowing and willful, the student loses SFA eligibility.

The school's decision is final and therefore cannot be appealed to the
Department. However, the Department will hear appeals from
students who have provided their schools with proof of compliance
with the registration requirement (i.e., that they are registered or
exempt from registration) but who are still being denied federal
student aid based on the registration requirement.

[[Relevant evidence]]
When deciding whether the student had knowingly and willfully
failed to register, the financial aid administrator should consider the
following factors:

- Where the student lived when he was age 18 to 25. For example,
if a student was living abroad, it is more plausible that he would
not come into contact with the requirement for registration.

- Whether the student claims that he thought he was registered.
Mistakes in recordkeeping can occur. Correspondence indicating
an attempt to register could form a basis for determining that the
student did not knowingly and willfully fail to register. On the
other hand, a letter from Selective Service stating that it received
no response to correspondence sent to the student at a correct
address would be a negative factor.

- Why the student was not aware of the widely publicized
requirement to register when he was age 18 through 25.

Students who have questions about the Selective Service registration
may contact the Selective Service at 1-847-688-6888.

[[Statement eliminated]]
Note that in the 1996-97 award year, the Statement of Registration
Status was eliminated. Because the CPS conducts data matches to
verify the registration status of male students, schools are no longer
required to collect signed Statements of Registration Status.


If a borrower inadvertently exceeds the annual or aggregate loan
limit allowed for the SFA Programs, he or she may be eligible for
SFA funds if the excess loan amount is repaid in full or if
satisfactory repayment arrangements are made with the loan holder.
The borrower will remain ineligible for further SFA funds until one
of these conditions is met.

[[Schools verify compliance, prevent excess borrowing]]
Because a school should have verified compliance before a loan is
disbursed to the student, excess borrowing should not occur often.
Financial aid administrators are encouraged to obtain financial aid
information by using the NSLDS (rather than by using paper
financial aid transcripts) because the NSLDS will catch many
problems that might otherwise be overlooked. (See Section 2 for
more on NSLDS.)

Following are some cases in which excess borrowing may have

- if a student borrowed for attendance at multiple schools and if the
financial aid administrator did not receive the financial aid
transcripts before disbursing a Perkins Loan, certifying a FFEL, or
originating a Direct Loan;

- if the student used different names when borrowing; or

- if the student failed to disclose the names of other schools he or
she had attended.

Cumulative loan limits may also be exceeded because of confusion
over amounts borrowed versus amounts outstanding. See Chapter 6
for Perkins Loan limits, Chapter 10 for FFEL limits, and Chapter 11
for Direct Loan limits.


Members of religious orders are not permitted to receive subsidized
FFELs, subsidized Direct Loans, Federal Pell Grants, or campus-
based aid. Members of any religious community, society, or order
that directs the students' courses of study or that provides the
students with subsistence support are not considered to have
financial need. Members of religious orders are eligible, however,
for unsubsidized FFELs and unsubsidized Direct Loans.


If a student is incarcerated, he or she is ineligible for an SFA loan.
Incarcerated students are eligible for FSEOGs and FWS. The Violent
Crime Control and Law Enforcement Act of 1994 amended the HEA
to prohibit the awarding of a Federal Pell Grant to any individual
who is incarcerated in any federal or state penal institution (see
Chapter 4, Section 1 for more information).


[[Course must lead to degree]]
A student enrolled in a correspondence course is ineligible for SFA
funds unless the course is part of a program leading to an associate, a
bachelor's, or a graduate degree. A student in a course of instruction
offered in whole or in part through telecommunications is not
considered to be enrolled in a correspondence course if the
telecommunications program leads to an associate, a bachelor's, or a
graduate degree from that school and telecommunications and
correspondence courses at the school total less than 50% of all the
courses offered. See Chapter 3, Section 1 for more information on
telecommunications courses.


In order to receive SFA funds, a student must sign certain statements.
The required statements include

1. Statement of Educational Purpose, and

2. Certification Statement on Overpayments and Defaults.

Both statements are on the FAFSA. The statements will be printed on
a student's SAR only if the student applies through FAFSA Express
but does not print and mail the required signature page to the CPS. In
this case, the student must sign Part 2 of the SAR (which includes the
statements) and return it to the CPS.

In the Statement of Educational Purpose, the student certifies that he
or she will use all SFA funds received only for postsecondary
education expenses. The statement for the FFEL Program must be
filed with the lender. For this reason, the Statement of Educational
Purpose is included on the loan application.

The Certification Statement on Overpayments and Defaults states
that the student does not owe a repayment on any SFA grant or loan
and either is not in default on any SFA loan or has made satisfactory
repayment arrangements on any defaulted SFA loan in his or her
name. This certification also states that the student has not borrowed
(at any school) in excess of the allowable SFA loan limits. The
school may rely on this statement only until confirmation is received
from NSLDS or financial aid transcripts. Remember that a student
who is in default or who owes a repayment is generally not eligible
for SFA funds (see "Loan Defaults and Overpayments" earlier in this


In addition to these general requirements, some programs have
additional eligibility rules. For instance, the Pell Grant Program
requires that a school receive a valid SAR while the student is still
enrolled and is still eligible for payment. See chapters 4 through 11
for details on specific requirements for each program.

*2* Federal SLS loans include Auxiliary Loans to Assist Students
and PLUS Loans to students, former names for SLS loans.

*3* Whether a person is a male or female is a matter for medical
determination. If a school needs to determine whether a student is
male or female for Selective Service purposes, the school should tell
the student to write to Selective Service for a Status Information

Last Modified: 08/18/1998