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What's New in the 2006-2007 Federal Student Aid Handbook

Award Year: 2006-2007

Chapter: --What's New in the 2006-2007 Federal Student Aid Handbook

Section: --What's New in the 2006-2007 Federal Student Aid Handbook

Posted on 03-14-2007

handbook cover What's New in the 2006-2007 Federal Student Aid Handbook

This page lists the items that changed from last year's edition of the FSA Handbook. For questions about the Handbook contents, contact the Schools Publications staff at:

For information about ordering the Handbook, please see the Publications and How to Order Web page.

Please note that the 2006-07 edition of the FSA Handbook does not include guidance pertaining to the HERA legislation, so some changes below might have been superseded by the HERA.

Application and Verification Guide

Chapter 1 The Application Process
P. AVG-3 We reworded the second paragraph to make it clearer that the FAFSA is the only application a student must fill out to apply for Title IV aid. We also noted that if you require students to provide you with information other than what appears on the FAFSA in order to apply for institutional or private aid, you must take that additional information into account in your awarding of Title IV aid. Also on this page is a margin note about the new FAFSA on the Web worksheet.
P. AVG-4 The paper renewal FAFSA has been discontinued.

Chapter 2 Filling Out the Application
P. AVG-19 In the margin note we have added a paragraph on how to count rental units as an asset when the family lives in the structure. This derives from Dear Colleague Letter GEN-05-16.
P. AVG-23 We added a paragraph on students applying after the award year has begun and counting as dependents persons other than their children. We also added references to this on page 30 in the instructions on household size.
P. AVG-24 For the question on veteran status, we have added the note that persons who fraudulently entered the service can be considered veterans if they were released under other than “dishonorable” conditions and their entire period of service was not voided.
P. AVG-26 At the bottom of the page is guidance in the example of a student who is receiving support from her boyfriend for her child. We received questions about whether the example meant that the support could be in-kind, if, for instance, the student and boyfriend were living together and he were paying all the bills. The answer is no; the topic sentence for the paragraph provides the correct context by indicating that the discussion is about a student receiving money for her child from any source other than her parents. We rewrote the text to make this clearer.

Chapter 3 Expected Family Contribution
P. AVG-36 The maximum adjusted gross income permitted for qualification for the auto zero EFC has been increased to $16,000.

Chapter 4 Verification
P. AVG-79 Last year Dear Colleague Letter GEN-04-04 was released just as the AVG went to the Web and so was not included. We have added a reference to the DCL in the margin of the page.
P. AVG-82 We noted that the IRS’s TeleFile option is no longer available.
P. AVG-89 There was a misleading example about students receiving an initial aid disbursement, making a change to their application, and then being selected for verification based on the new transaction. The implication of the example was that any aid received in the first disbursement need not be repaid if the student failed to complete verification. While Stafford loans and Federal Work Study fall into that category, other types of aid must be repaid by the student. We clarified the example and the accompanying text in the body of the page and moved the discussion to page 89, where it is better placed. We also reorganized the rest of the section where the above example now appears, “Completing the Process,” at the end of Chapter 4 to make the guidance more logical and readable.

Volume 1: Student Eligibility

We have moved several sections to other volumes of the Handbook where they are more relevant. In Chapter 1 the satisfactory academic progress information on transfer students and change of program was moved to or was already contained in Volume 2. In Chapter 6, in the Stafford and PLUS section, “Refusing to originate or certify a loan” and “FFEL lender of last resort” were moved to Volume 4; in the Federal Work Study section, all of the paragraphs except for the first one pertaining to student eligibility were moved to Volume 6.

Chapter 1 School-Determined Requirements
P. 1-10 We added a note that schools must include as part of their written policies what the enrollment equivalent is for the work portion of a co-op program.

Chapter 2 Citizenship
P. 1-17 We moved the statement under “Losing eligibility” about checking citizenship status once per year from the end of Ch. 1 to the first page of Ch. 2.
P. 1-23 et al. There have been significant changes in the documentation used by the Department of Homeland Security for immigrants. Accordingly, we have revised Chapter 2. In particular note that the new machine readable immigrant visas (MRIVs) are placed in the passport of the holder and function as temporary evidence of permanent residence. There is also the new travel document for permanent residents, refugees, and asylees. Both of these are qualifying documents for receiving aid. Also note that determinations involving aliens who are permanently residing under color of law are no longer conducted by the Department of Homeland Security, but the pertinent section on the current G-845S does not reflect that.

Chapter 3 Financial Aid History
P. 1-42 We added a margin note explaining that real-time corrections won’t occur when a school is added to the FAFSA. Rather, the application will be sent through the NSLDS match again to ensure that the new school receives the latest financial aid history information.

Chapter 5 Selective Service System
P. 1-59 We added the code RH. See this page for the explanation of the RH status information letter sent by the Selective Service System.

Volume 2: School Eligibility and Operations

Chapter 9 Record Keeping and Disclosure
P. 2-158 to 2-160 We have added information on the information security requirements of the Gramm-Leach-Bliley Act.

Volume 4: Disbursing & Managing FSA Funds

Chapter 1 MPN & Stafford/PLUS Loan Process
The section on Additional Unsubsidized Stafford Loans was moved to Volume 3, chapter 4.

Chapter 2 Disbursing FSA Funds
We informed schools that if they use an electronic process to provide notifications and obtain authorizations, they must provide individual notice to students on the use of that process.
We expanded our guidance on the application of the E-Sign Act to FSA Transactions.
We added stored-value and prepaid debit cards as a form of electronic funds transfer (EFT), and we add a discussion of the conditions under which schools may use those cards to disburse FSA credit balances.
We added a discussion on using FSA credit balances to pay pass-through charges.
We remind schools that do not award credits as work is completed that they may be prohibited from making second disbursements of Title IV educations loans until they have determined that students are making satisfactory academic progress.
We added a discussion on disbursing FSEOG and Pell funds to students enrolled in correspondence courses.

Chapter 3 Requesting and Managing FSA Funds
We added a discussion on returning FSA funds.

Volume 6: Campus-Based Programs

Chapter 1 Participation, Fiscal Procedures, and Records
p. 6-4 Added reallocation guidance and added DCL cite on same
p. 6-14 Updated DCL cite on meeting nonfederal share with state grant and scholarships

Chapter 4 Perkins Repayment, Forbearance, Deferment, and Cancellation
p. 6-91 Updated Child or Family Services cancellation guidance and added DCL cite to Child or Family Services sidebar (GEN 05-15) and added HEA cite
p. 6-94 Updated Perkins cancellation reimbursement DCL cite

Chapter 5 Perkins Billing, Collection, and Default
p. 6-117 Updated DRAP participation procedure guidance, and added Campus-Based call center telephone # to sidebar (they take DRAP calls)
p. 6-118 Added Perkins Cohort Default Rate Guide link
p. 6-118 Revised sidebar heading “In default” to “Loans included in cohort default rate”

Last Modified: 03/13/2007