Maintained for Historical Purposes

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

The Federal role in application processing

AwardYear: 1995-1996
Edition: High School
Part: 2 - - The Application Process for Financial Aid
SectionTitle: The Federal role in application processing

PageNumbers: 26-27

Historically, standards for application processing and need analysis were developed in the 1950s by the financial aid community and independent servicers, such as the College Scholarship Service. As the Federal share of need-based aid increased over the years, need analysis became a part of the law, which was later amended to ensure that prospective students could apply for federal aid without paying a fee. The law also requires the Department to contract to the extent practicable with organizations for processing financial aid applications.

Currently, ED contracts for two different kinds of processing services: application processing and Federal student aid eligibility calculation. There are four application processors, but only one central processor for the eligibility calculation. ED has arranged for the four different application processing systems to process the FAFSA and send student information to the central processing system (CPS). The application processors are also responsible for printing the Student Aid Report (SAR), which includes the EFC calculated by the CPS.

We will refer to the application processors as FAFSA processors for purposes of our discussion of the federal student aid delivery system, although several of the processing organizations also may provide other services to students and schools. One of the FAFSA processors is the Education Department's own application processor. We will refer to this processor as the ED application processor.

The end result of the federal application process is a federal output document containing an EFC that is determined on the basis of the student's complete and correct FAFSA information. This document will be either the SAR, which the processor will mail to the student's home address within four weeks, or an Institutional Student Information Record (ISIR), which a school can obtain electronically and print. Only colleges and career schools listed in Part H of a student's FAFSA can automatically obtain an ISIR. The EFC and the data supplied by the student are printed on the SAR or ISIR. For a student to receive federal student aid, the school must receive either the SAR from the student or the electronic filing results from the central processing system. Even if the school receives the information directly from the processing system, students must carefully review the processed information to make sure it is correct.

Note that the term "ESAR" no longer is used.
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Last Modified: 05/03/1998