Part: 2 - - The application process for financial aid
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. A student must fill out the
Free Application for Federal Student Aid (FAFSA) to be considered
for federal student aid (such as Federal Pell Grants, Federal Direct
Loans, and Federal Family Education Loans). This application collects
financial and other information used to calculate the EFC
(Expected Family Contribution) that is a key factor in determining
the student's eligibility for aid.
Currently, the U.S. Department of Education contracts for two
different kinds of processing services. FAFSA Processors input
students' FAFSA data and transmit that data to the Central
Processing System (CPS). The CPS uses this information to calculate
the EFC and to produce an output document (or record) reporting
that EFC. The student will receive a Student Aid Report (SAR) or
SAR Information Acknowledgement from the CPS within four weeks of
submitting the FAFSA.
Schools can get the student's output record electronically, in the form
of an Institutional Student Information Record (ISIR). Only schools
listed in Part H of a student's FAFSA will automatically receive an
ISIR. Any other school must obtain that student's ISIR through either
the Applicant Data Service (on tape or cartridge) or through the
Electronic Data Exchange.
The application processing cycle lasts 18 months. For
the 1997-98 award year, application processing begins in January
1997, and applications for that year will be accepted until June 30,
1998. However, students who are applying for the summer or fall
1997 sessions should be advised to submit their applications as soon
as possible but not before January 1, 1997.