Maintained for Historical Purposes

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

Using the official EFC to document eligibility

AwardYear: 1996-1997
Edition: PostSecondary
Part: 2 - - The application process for financial aid
SectionTitle: Using the official EFC to document eligibility

PageNumbers: 46-47

The "official" EFC is the EFC calculated by the CPS, using the CPS
edits and eligibility matches. The EFC printed at the top of the first
page of the SAR, the secondary EFC, and the alternate EFCs printed
in the "FAA Information" section of the SAR are all considered
official figures that can be used for payment. The CPS may provide
the school with an official EFC on an ISIR. An EFC from a source
other than the CPS is considered an estimated figure.

An applicant for federal student aid must first send a FAFSA to one
of the two approved application processors to determine eligibility.
The only exception to this rule is a student who applies only for a
PLUS Loan. Thus, nearly all applicants for federal student aid must
pass through the CPS's eligibility matches and receive official EFCs.

Payment for a Federal Pell Grant must be based on the student's
official EFC, and any modifications to the data that result in a
changed award must be resubmitted through the CPS for
recalculation of the EFC. Ultimately, you must have in your
FROM THE FEDERAL CPS to document the student's eligibility
for the Federal Pell Grant. The student's valid SAR or ISIR serves
as this eligibility document or record.

For the federal campus-based, Federal Direct Loan, and FFEL
programs (except PLUS), you must have in your files at least one
output record for the student containing an official EFC and data
processed by the CPS: either a SAR or an ISIR. This output
document or record need not be signed, and it need not contain the
final, corrected, or adjusted data for that student. It merely
documents that the student's data has been processed through the
CPS and has gone through system edits and the eligibility matches.

You may not make payments based on an ESTIMATED EFC (an
EFC from a source other than the CPS). Packaging can be based on
an estimated EFC and a loan application can be certified with an
estimated figure, but funds cannot be delivered until the school has
received an official EFC from the CPS. If you have received the
official EFC but need to correct or adjust the student's information,
you may pay the student campus-based, Federal Direct Loan, or
FFEL funds based on your EFC recalculation. Or, you may choose to
obtain a new official EFC from the CPS by making changes through
EDE or by having the student submit a corrected SAR to the FAFSA

The school is liable for any recalculation errors that result from using
an EFC that was calculated at the school or through a need analysis
servicer. Schools should note that the Department does not certify
the accuracy of the calculations performed by need analysis
servicers. The Need Analysis System (NAS) program calculates the
same EFC as the CPS; however, the student's information must be
processed by the CPS at least once, because the eligibility matches
cannot be performed by NAS.

To receive the 1996-97 NAS specifications, all interested need
analysis servicers must enter into an agreement with the Department
and comply with the procedures set forth in that agreement. The
agreement must be completed and signed by new servicers in order
to receive the NAS specifications, which are sent automatically to
current NAS servicers.

A "first payment option" once existed when disbursing Federal Pell
Grants to eligible students before receipt of a valid SAR or ISIR
from the CPS. Under the new Federal Pell Grant Program
regulations, schools are not allowed to make a first disbursement
of a Pell award without a valid SAR or ISIR. However, you may
still make an interim disbursement to a student who is selected for
verification (including a student selected for verification by the
school rather than the CPS). See The Verification Guide 1996-97
for more information.

If a student is not selected for verification, you may not make a
disbursement to the student until you have a valid SAR or ISIR. If
the student needs to make corrections to his or her data, or if you
wish to use professional judgment to adjust the student's data, you
must submit the student's SAR for reprocessing (using Part 2), or
make the changes through the Electronic Data Exchange and receive
the new SAR or ISIR before making a first disbursement.

You are not required to resubmit corrections or adjustments to the
FAFSA processor or CPS for recalculation of the EFC if the student
is only eligible for federal campus-based, Federal Direct Loan, or
FFEL funds.

Last Modified: 06/17/1998