Maintained for Historical Purposes

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

How the application is processed

AwardYear: 1997-1998
Edition: PostSecondary
Part: 2 - - The application process for financial aid
SectionNumber:
SectionTitle: How the application is processed

PageNumbers: 27-30


How the application is processed

The CPS analyzes the information from the FAFSA and calculates an
EFC to determine how much a student and (if the student is
dependent) his or her parents can be expected to pay toward the
student's education. As discussed in Part 1, the EFC measures the
family's financial strength on the basis of the income and assets of
the student and/or the student's parents and/or the student's spouse.
The EFC formula also takes into account the family's expenses
relative to the number of persons in the household and how many of
them will be attending college during the award year.

If the EFC is less than the cost of attendance, the student is
considered to have financial need. A student with a zero EFC
may receive the maximum Federal Pell Grant award, depending on
the student's cost of attendance and enrollment status. The higher the
EFC, the less the student's need. If the student's EFC is above a
maximum amount determined each award year, the student will not
be eligible for a Federal Pell Grant but may be eligible for other
assistance.

The CPS automatically calculates a simplified EFC for students
who meet certain income and tax filing requirements. Such students
do not need to provide asset information on the application, but if
they do, a full calculation will be performed using that information.
To qualify for the simplified calculation,

- neither the student, the dependent student's parents, nor the
independent student's spouse can have filed (or have been required
to file) an IRS Form 1040, and

- they must have an income of less than $50,000, not counting the
income of a dependent student. (The income limit applies only to
the income of the dependent student's parents, or the independent
student and his or her spouse.)

The formula also provides for an automatic zero EFC for some
students. Applicants who meet the following requirements will
automatically receive a zero EFC:

- for a dependent student, neither parent was required to file a 1996
IRS Form 1040, and the parents' taxable income is $12,000 or less

- for an independent student with dependents other than a spouse,
neither the student (or spouse) filed or were required to file a 1996
IRS Form 1040, and the student (and spouse's) taxable income is
$12,000 or less.

Independent students with no dependents other than a spouse do not
qualify for an automatic zero EFC.

The CPS uses a series of edits to check the consistency of the
student's information. For instance, it would be inconsistent for the
dependent student of a single parent to report income earned from
work for two parents. If the FAFSA data is inconsistent, the CPS
may be unable to calculate the EFC or may calculate an EFC based
on automatic assumptions. If assumptions have been used, they are
indicated on the SAR or ISIR; the student must make sure the
assumptions are correct.

For electronic applications, you can anticipate certain assumptions
and correct or override certain information on the student's first
application. Thus, the student's information does not have to be
reprocessed to confirm these assumptions. For example, if the
household size and the number of people in college are equal to each
other and more than two, the processor assumes that the number in
college should be one. In an electronic application, the financial aid
administrator can override this assumption if all members of the
household are in fact enrolled in college. This override allows
information contrary to the assumptions to be confirmed when first
filing through EDE (rather than requiring later confirmation).

The CPS also performs several data matches. If a student's
records do not satisfy the eligibility match requirements of one or
more of the databases discussed below, the student's records are
flagged and the student may not be eligible to receive federal aid
unless the discrepancy is resolved. Resolving such a discrepancy
usually requires the student to submit additional documentation to
the school where he or she is applying.

For example, the CPS matches FAFSA data against the Department's
National Student Loan Data System (NSLDS). This database
identifies students who owe an overpayment on a Federal Pell Grant
or Federal Perkins Loan, and students who have defaulted on any
Federal Perkins Loan, Federal Direct Loan, or Federal Family
Education Loan (as well as any other federal student loan held by a
state guaranty agency or by the Department). If a student is found to
owe an overpayment or to be in default and has not made satisfactory
arrangements to repay, he or she receives a comment on the SAR or
ISIR saying he or she is ineligible for aid until the status is resolved.

If a match with NSLDS is completed but no student data are present,
comment #140 is generated. The school can thus assume that the
student has no financial aid history. If the match is partial--that is, if
a student's SSN matches a record in the NSLDS database, but the
student's name does not match--comment 138 is generated. In this
situation, the loan history in the database does not appear on the
student's SAR or ISIR (identification was not complete), but the
comment alerts the financial aid administrator that some financial aid
history is associated with that student's SSN.

For 1997-98, one new reject reason code (Reject 4) has been added.
If a student makes the mistake of reporting his or her birth year as
the current year, the application will be rejected and the student must
provide a correct year for his or her date of birth. This procedure
ensures better data matches with NSLDS and the Social Security
Administration (SSA).

The CPS sends records to the SSA to check the validity of a student's
Social Security Number (SSN). If the SSN is invalid, the student
receives a rejected SAR, and a comment will appear on the SAR or
ISIR instructing him or her to review the SSN. (Also, the student
receives a comment on the SAR or ISIR if the SSN is a valid number
but the name and/or date of birth reported on the FAFSA does not
match SSA records.)

A student with an invalid SSN receives a "Reject 18" SAR ("SSN not
found in database"); this was formerly known as a "Reject S" SAR.
The student must report his or her correct Social Security Number to
SSA and provide documentation verifying the correct number. The
student should then submit a new FAFSA using his or her correct
SSN: as stated in Action Letter 5 (GEN-96-22), a student who
receives the Reject 18 SAR, and who determines that a correction to
the originally reported SSN is needed, should submit a new FAFSA
rather than attempt to correct the SSN on the SAR.

Beginning in the 1997-98 academic year, if a student makes
corrections to his or her name, date of birth, or SSN after an
attempted SSA database match, this record will be rematched against
the SSA database. A new match flag will be generated and reported
in the FAA Information section. Once confirmation of all the SSA
match elements has been obtained (i.e., SSN, name, and date of birth
all match and U.S. citizenship is confirmed), the SSN and citizenship
flags will be carried forward to the student's 1998-99 Renewal
Application, and the SSA match will not have to be performed each
time the student applies for aid. If a student whose match data have
been confirmed subsequently attempts to change his or her SSN, the
system does not accept the change and generates a comment (code
#13) advising the student to contact his or her financial aid
administrator for assistance.

Since 1996-97, the SSA has been conducting a match to verify U.S.
citizenship status if the student indicates on the FAFSA that he or she
is a U.S. citizen. The results of the SSA citizenship match--a
comment code and a comment explaining the result--are printed on
the student's SAR. When a student's reported data conflict with the
SSA database--or when no citizenship match can be performed--he
or she will receive a comment on his or her SAR, along with a SAR
flag "C." A student who receives this comment must provide the
school with documentation substantiating his or her claim to be a
citizen or eligible noncitizen.

For each student who provides an Alien Registration Number
(ARN), the CPS also checks the status of eligible noncitizens by
conducting a match with the Immigration and Naturalization Service
(INS).

The CPS also performs matches against drug abuse conviction
records maintained by the U.S. Department of Justice and
registration status information maintained by the Selective Service System.

Last Modified: 08/23/1998