Part: 2 - - The application process for financial aid
SectionTitle: The federal role in application processing
Historically, standards for application processing and need analysis
were developed in the 1950s by the financial aid community and
independent servicers. 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.
Currently, the U.S. Department of Education contracts for two
different kinds of processing services. The APPLICATION
PROCESSING SYSTEMS process the FAFSA and send student
information to the CENTRAL PROCESSING SYSTEM (CPS).
The CPS uses this information to calculate the EFC and print the
STUDENT AID REPORT (SAR). We will refer to the application
processors as FAFSA PROCESSORS for purposes of our discussion
of the federal student aid delivery system. For the 1996-97 award
year, there are two FAFSA processors, but there is only one central
processor for eligibility calculation.
The end result of the federal application process is a federal output
record containing an EFC that is determined on the basis of the
student's complete and correct FAFSA information. The record will
be a SAR or a SAR Information Acknowledgement, which the CPS
will mail to the student within four weeks, and an INSTITUTIONAL
STUDENT INFORMATION RECORD (ISIR), which a school can
obtain electronically. The ISIR is a computer-generated electronic or
magnetic record. Note that the ISIR is no longer available in paper
Only 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 transmitted in the ISIR. For a student to
receive federal student aid, the school must receive either the SAR
from the student or the ISIR from the CPS with an official EFC.
Even if the school receives the information directly from the
processing system, each student must carefully review the processed
information on his or her SAR to make sure it is correct.
CHANGES TO THE APPLICATION PROCESSING PROCEDURES
Please note, as stated in Action Letter GEN-95-10 (A Guide to
1995-96 SARs and ISIRs): the Department no longer offers the paper
ISIR (paper roster) beginning with the 1996-97 award year.
Magnetic ISIRs (tapes and cartridges) will still be available from the
CPS to institutions that participate in the Applicant Data Service.
Electronic ISIRs can be received through the Electronic Data
There has been yet another significant change in electronic
processing procedures: the elimination of Part 3 (the Federal Pell
Grant Payment Voucher) of the SAR . Beginning in 1996-97, all
institutions are required to use at least one of the automated data
exchanges: the electronic payment system (EDE), the Recipient Data
Exchange (RDE), or the Floppy Disk Data Exchange to report Pell
payment information. In RDE, schools submit payment data via
magnetic tape; in Floppy Disk Data Exchange, schools submit data
via PC diskette.
Also, beginning in the 1995-96 award year, the Department
introduced a new electronic application system called FAFSA
Express. FAFSA Express allows students to apply electronically
without going to a school to use EDE; this process requires only an
IBM-compatible computer that meets minimum standards and a
modem (a printer is also strongly recommended). Copies of the
1996-97 FAFSA Express program will be made available to libraries,
postsecondary schools, Educational Opportunity Centers, and high
schools. The Department has provided schools and libraries with
information on ordering the program.