Session GS 2 FAFSA Application Processing and Verification

Session GS 2 FAFSA Application Processing and Verification Update Maria Marella, Carney Mc. Cullough, Ed Pacchetti, and Misty Parkinson | Dec. 2015 U. S. Department of Education 2015 FSA Training Conference for Financial Aid Professionals

Agenda • • 2 2016 -17 Application Enhancements Application Trends 2016 -17 Verification Policy Changes 2016 -17 Verification Operational Changes 2016 -17 Unusual Enrollment History Changes Planned Application Changes for 2017 -18 Important Dates

2016 -17 Application Enhancements 3

College List Issue: FSA has received requests from the public to stop sharing the full list of colleges on a student’s FAFSA with every school listed. • Resolution: The ISIR that is sent to colleges will only include the Federal School Code and associated housing code for the school to whom the ISIR is sent. • 4

“School Selection” Page 5

“School Selection Summary” Page 6

FAA Access Correction Entry Page 7

Change to Marital Status Issue: When a student or parent changes his/her marital status on a renewal application or correction, the corresponding marital status date isn’t always updated. • Resolution: When a student or parent changes his/her marital status and does not change the corresponding date, an edit displays. • 8

Marital Status Date Edit 9

Edit When Parents Report Same PII Issue: When parents are married, or unmarried and living together, they sometimes report the same identifiers. • Resolution: When both parents report the same SSN, an edit displays. • 10

Duplicate Parent SSN Edit 11

Messaging to Explain Rollovers Issue: Students and parents who report untaxed portions of IRA distributions or pensions on the FAFSA sometimes fail to subtract rollover amounts despite FAFSA and IRS help text. • Resolution: When an amount greater than $0 is reported, a message will display. • 12

Rollover Message 13

Guidance For Legal Guardianship Issue: Applicants sometimes answer the legal guardianship question incorrectly. • Resolution: FAFSA question 55 has been reworded and help text has been modified. • 14

Legal Guardianship Messaging 15

IRS DRT Messaging Issue: Applicants and parents don’t understand the purpose of the IRS DRT filtering questions. • Resolution: Text that precedes these questions has been enhanced. • 16

IRS DRT Messaging 17

Other 2016 -17 FAFSA Changes Increase Automatic Zero EFC threshold to $25, 000 • Change tax line references in taxes paid questions • Reorder text in FAFSA questions 26, 28, 29, and 30 • 18

Application Trends 19

Applications and Corrections • FOTW has increased its share as an application (and correction) data source, accounting for 99% of all applications in 2014 -15 20

Application Completion Times • • Completion times have been consistently declining until this year Even accounting for three primary factors influencing completion times—dependency status, renewal status, and EZ form eligibility—improvements in the online application have been decreasing completion times 21

Postsecondary Schools Listed • • 79% of applicants list one postsecondary school on their FAFSA Among first-time filing freshmen, 32% report more than one school 22

IRS Data Retrieval Tool Usage • Among those who had filed their taxes by the time they submitted their initial transaction, about 4. 3 million transferred data from the IRS. By their final transaction 5. 2 million had transferred data 23

IRS Data Retrieval Tool Usage • • Compared to independents, dependent applicants are more likely to apply early in the cycle. Moreover, parents of these early Q 1 applicants are more likely to have yet to file (2. 5 million) than have actually filed (2. 1 million) their taxes Among parents who have already filed their taxes by the initial application, 1. 9 million transferred data using the IRS DRT 24

Data Table and Figure Notes FAFSA Table 1: Data retrieved from Central Processing System (CPS). Includes rejected transactions and excludes system-generated transactions. Due to rounding, values may not add up to 100%. FAFSA Table 2: Data retrieved from Central Processing System (CPS). Data based on initial application and includes rejected applications. Only includes applications processed through FAFSA on the Web (FOTW). The current (2015 -16) cycle figures include applications processed through April 31, 2015; all remaining cycle figures include all processed applications. FAFSA Table 3: Data retrieved from Central Processing System (CPS). Data based on initial application and includes rejected applications. Only includes applications processed through FAFSA on the Web (FOTW). The current (2015 -16) cycle figures include applications processed through April 31, 2015; all remaining cycle figures include all processed applications. FAFSA Table 4: Data retrieved from Central Processing System (CPS). Data based on initial application and includes rejected applications. Due to rounding, values may not add up to 100%. 25

Data Table and Figure Notes FAFSA Figure 1: Data retrieved from Central Processing System (CPS). Data based on initial application and includes rejected applications. Due to rounding, values may not add up to 100%. Data broken down by those who filing an original application 2014 -15 and self-reported being college freshmen. FAFSA Figure 2: Data retrieved from Central Processing System (CPS). Only includes independent applications. Quarterly breakdown based on initial application and includes rejected applications. Cycle totals provided for both first and last transaction. The values for initial and last transaction are not subsets of each other as—among other factors—applicants can change dependency status or tax filing status by the final transaction. FAFSA Figure 3: Data retrieved from Central Processing System (CPS). Only includes dependent applications. Quarterly breakdown based on initial application and includes rejected applications. Cycle totals provided for both first and last transaction. The values for initial and last transaction are not subsets of each other as—among other factors—applicants can change dependency status or tax filing status by the final transaction. 26

Verification 27

Verification – Overview History • Last comprehensive look in 1985 • Program Integrity regulations—October 29, 2010 • Move to customized verification • Effective for the 2012 -13 award year 28

Verification – Policy For the 2012 -13 award year • Retained the long-standing five items and added SNAP and child support paid, if reported on the ISIR For the 2013 -14 award year • Introduced the concept of verification groups • Added high school completion and identity/statement of educational purpose as verification items 29

Verification – Policy For the 2014 -15 award year • Eliminated SNAP (V 2) as a separate verification group • Added household resources group (V 6) • Added other untaxed income and benefits as a verification item For the 2015 -16 award year • No changes 30

Verification – Changes 2016 -17 • Changes for 2016 -17 • • 31 Same data elements as for 2015 -16 award year Some modifications and clarifications to acceptable documentation Eliminated Child Support Paid (V 3) as a separate verification group In limited circumstances, an applicant’s Verification Tracking Group could change

Verification – Acceptable Documentation • • Tax filers in a U. S. territory or commonwealth must submit a transcript of their tax return if it is available for free from the taxing authority Nontax filers in the Freely Associated States, a U. S. territory or commonwealth, or a foreign country must submit a copy of their Wage and Tax statement for each source of employment income for 2015 and a signed statement identifying all income and taxes for 2015 32

Verification – Acceptable Documentation • Tax filers and Nontax filers—if a copy of the tax return was not retained and cannot be located by the IRS must submit: • • • 33 Copy of all relevant W-2 s Signed statement that the individual did not retain a copy of his or her tax account information, and Documentation from the IRS that indicates that the individual’s 2015 tax account information cannot be located

Verification – Acceptable Documentation • Victims of IRS tax-related identity theft must submit: • • • Tax filers who filed an amended tax return must submit: • • 34 A Tax Return Data. Base View (TRDBV) transcript and A signed and dated statement from the tax filers that they are victims of IRS tax-related identity theft and that the IRS has been made aware of this A transcript from the IRS that lists tax account information of the tax filer and A signed copy of the IRS Form 1040 X that was filed

Verification – Acceptable Documentation • High school completion status • • • Child support paid • 35 If the institution successfully verified and documented high school completion status in a prior award year, it does not have to reverify this item If documentation is not available, alternative documentation may not include self-certification or a DD Form 214 Removed a separation agreement or divorce decree from acceptable documentation

Verification – Acceptable Documentation • Identity/Statement of Educational Purpose • 36 Clarified that the valid government-issued photo identification used to verify identity must not have expired

Verification – Changes 2016 -17 Eliminated Verification Tracking Group V 3 (Child Support Paid) • Applicants may be moved from previously assigned Groups V 1, V 4, and V 6 to Verification Tracking Group V 5 • • Applicant is only required to verify the additional items in V 5 that were not previously verified 37

Verification – Changes 2016 -17 • If the applicant is moved to Verification Tracking Group V 5, no additional disbursements of any Title IV aid may be made until verification is satisfactorily completed • If verification is not satisfactorily completed, the student is liable for the full amount of Title IV aid disbursed • The institution is not liable 38

V 1 – Tax Filers • Adjusted Gross Income U. S. Income Tax Paid Untaxed Portions of IRA Distributions Untaxed Portions of Pensions IRA Deductions and Payments • Tax Exempt Interest Income • Education Credits • • 39 Documentation: • IRS DRT; • Tax Return Transcripts; • Alternate documentation where allowed (e. g. amended returns, foreign returns, etc. )

V 1 – Non-Tax Filers • Income earned from work Documentation: • Signed statement certifying – • Individual has not filed and not required to file a 2015 tax return; • Sources of income earned from work and amounts of income from each source for tax year 2015; and • Copy of IRS Form W– 2 for each source of employment income received for tax year 2015 40

V 1 – Non-Tax Filers • If an institution questions a claim that the tax filer is not required to file, must require applicant to submit a “Verification of Nonfiling Letter” • • 41 Form 4506 -T and checking box 7 “Verification of Nonfiling Letter” for 2015 tax year generally not issued until after June 15, 2016

V 1 – All Applicants • Number in Household and Number in College Documentation: • Household size – signed statement (name, age, relationship) • Not required if: • Dependent household size reported is two and parent is unmarried or three if the parents are married or unmarried and living together • Independent household reported is one and applicant is unmarried or two if the applicant is married • Number in College – signed statement (name of household member attending at least half-time and eligible institution name) • Not required if reported number is one (student) 42

V 1 – All Applicants SNAP Benefits (if reported on ISIR) • SNAP Documentation: • Statement signed by applicant/parent affirming SNAP benefits received by someone in household during 2014 and/or 2015 • If school has concerns with accuracy of information, the institution must obtain documentation from the agency that issued the SNAP benefits 43

V 1 – All Applicants • Child Support Paid (if reported on ISIR) Documentation: • Statement signed by applicant/parent certifying– • • 44 Amount of child support paid; Name of the person who paid the child support; Name of the person to whom child support was paid; and Names of the children for whom child support was paid

V 1 – All Applicants • 45 If the institution has reason to believe that the information provided in the signed statement is inaccurate, the applicant must provide the institution with supporting documentation, such as checks, money order receipts, or similar records of electronic payments having been made

V 4 – Custom High School Completion Status • Identity/Statement of Educational Purpose • SNAP Benefits (if reported on ISIR) • Child Support Paid (if reported on ISIR) • 46

High School Completion Status • High school completion status Documentation: • High school diploma; or • Final official high school transcript showing date diploma awarded; or • “Secondary school leaving certificate’’ for students who completed secondary education in foreign country and unable to get copy of high school diploma/transcript • 47 Note: If prior to being selected for verification, an institution already obtained HS completion status records for other purposes, the institution may rely on those records as long as it meets ED HS completion criteria

High School Completion Status • Recognized equivalent of a HS diploma Documentation: • Copy of the student’s General Educational Development (GED) certificate, an official GED transcript that indicates the student passed the exam, or a state-authorized HS equivalent certificate; or • Academic transcript of a student who has successfully completed at least a two-year program that is acceptable for full credit toward a bachelor's degree; or • Student excelled academically in HS and met all criteria to be admitted into a two-year degree program or higher 48

High School Completion Status • Test transcripts of State-authorized examinations Documentation: • Test transcripts of State-authorized examinations (e. g. , GED test, Hi. SET, TASC, or other State-authorized high school equivalency examinations) are acceptable documentation of high school completion only if: • The official test transcript specifically indicates that a State has determined that the test results are considered by the State to meet its requirements of high school equivalency; or • The official test transcript includes language that the final score is a passing score 49

High School Completion Status • Homeschooled Documentation: • • 50 Credential, transcript, or the equivalent, signed by the parent or guardian, that lists the secondary school courses completed by the applicant and documents the successful completion of a secondary school education; or A secondary school completion credential for home school provided for under State law

Identity/Statement of Educational Purpose • Students that appear in person Documentation: • Present to an institutionally authorized individual An unexpired valid government-issued photo identification; and • A signed statement of educational purpose provided by ED, cannot be modified • • Maintain an annotated copy of the identification: The date documentation was received; and • The name of the institutionally authorized individual that obtained the documentation • 51

Identity/Statement of Educational Purpose • Student unable to appear in person Documentation: • Must provide the institution— A copy of an unexpired valid government-issued photo identification AND • An original, notarized statement of educational purpose signed by the applicant, cannot be faxed or scanned • Maintain a copy in the file • After examining the original Statement of Educational Purpose for accuracy and completeness, the institution may convert it into an electronic record • 52

V 5 – Aggregate High School Completion Status • Identity/Statement of Educational Purpose AND • All items indicated-Tax Filer (V 1) • All items indicated-Non-Tax Filer (V 1) • 53

V 6 – Household Resources All items indicated-Tax Filer (V 1); or • All items indicated-Non-Tax Filer (V 1); AND • Other untaxed income from 2016 -17 FAFSA: • • 54 Payments to tax-deferred pension and savings Child support received Housing, food, and other living allowances paid to members of the military, clergy, and others Veterans noneducation benefits Other untaxed income Money received or paid on the applicant’s behalf

V 6 – Household Resources • Other Untaxed Income Documentation: Documentation • Signed statement listing – • Sources and amounts of income for tax year 2015; and • Copy of IRS W 2 s for sources of employment income received for tax year 2015, where applicable 55

V 6 – Household Resources If school determines amounts provided do not appear to provide sufficient support for family members reported, the applicant (and parent/spouse) must: • • • 56 Provide additional signed statement listing other resources used to support family (may include items not required to be reported on FAFSA or other verification forms) Explain how financially supported during 2015 calendar year

V 6 – Household Resources • Institutions should use reasonable judgment when evaluating the validity of the income information provided by students and parents who are placed in Verification Tracking Group V 6 • “Reasonable” may differ among institutions • Institutions may choose to accept a signed low-income statement, an income-to-expenses comparison, or other documentation as determined by the institution 57

Verification – Hot Topics Amended Tax Returns • Transcript Requests • Identity Theft • 58

Amended Tax Returns • If the institution is aware that an amended tax return was filed, to complete verification, the applicant must submit — • Transcript obtained from the IRS that lists tax account information for the filer(s) for 2015, and • A signed copy of IRS Form 1040 X that was filed with the IRS • Refer to Dear Colleague Letter – GEN-15 -11 59

Transcript Requests – 2016 -17 Transcript Requests • Online Get Transcript by Mail, • Automated phone tool (1 -800 -908 -9946) • Paper Form 4506 -T or 4506 T-EZ generate a paper transcript • (Refer to Appendix A of the 2016 -17 Verification Suggested Text) 60

Identity Theft – 2016 -17 A tax filer who is unable to obtain an IRS Tax Return Transcript because of IRS identity theft, calls a special IRS group at 1 -800 -908 -4490 • Upon verification of identity, the tax filer can obtain a paper copy of an alternative document unique to identity theft issues (Tax Return Data Base View (TRDBV)) • The TRDBV is an official transcript that can be submitted to the school to meet verification requirements • (Refer to Dear Colleague Letter – GEN-15 -11) 61

Verification – Overview Data • For the 2014 -15 cycle, approximately 5. 3 million applicants (26. 0%) were selected for verification; to date for 2015 -16, approximately 4. 9 million applicants (28%) have been selected 62

Verification – EFC Change Data Among those selected for verification, most either do not submit a correction or do so with no impact to their EFC • For V 1, however, 42% saw a correction that led to a change to their EFC • 63

Verification – EFC Change Data Among those where a change to EFC occurs, the impact is obvious • After being flagged for verification, about 759 k students corrected their application leading to an EFC change between 1 and 500. About 319 k saw a change between 501 and 1, 000 • 64

Verification – Operations Verification Tracking Selection Criteria: Verification Tracking Flag Verification Tracking Group Verification Selection Criteria V 1 Reserved for FSA Use Only N/A V 3 Reserved for FSA Use Only N/A V 4 Custom Verification Group Record selected for Identity criteria V 5 Aggregate Verification Group Record selected for combination of Identity criteria, “Standard Verification” criteria and Total Income/Household Size V 6 65 Record selected because conditions based on statistical analysis error-prone risk model were met V 2 Standard Verification Group Household Resources Verification Group Record selected for Total Income and Household size

Verification – Operations • Based on the data on the record and if a record was selected for verification and financial data was transferred from the IRS, then either: • • 66 No fields will need to be verified based on the values in Marital Status, Household Size, and Number in College Only Household Size and Number in College

Verification – Tracking Group Beginning in 2016 -17, a student may go to tracking group V 5 from V 1, V 4, or V 6 • Verification can be set on the application or correction • Verification Selection Change Flag • • • 67 Y: indicates verification was not set and now record is selected for verification C: indicates the verification tracking group has changed

Same for 2016 -17 – Not Selected If the applicant would have been selected based on standard verification criteria and • Tax return data for the student and parent(s) for a dependent record or for the independent student • Retrieved from the IRS and not changed on the FAFSA • Responses to Household Size and Number in College questions seems logical • Record will not be selected for verification 68

Same for 2016 -17 – Not Selected • Logical answers include the following: Dependent Students Independent Students Parents’ Marital Status Number in College Married 3 1 Not Married 69 Household Size 2 1 Student’s Marital Status Household Size Number in College Married 2 1 Not Married 1 1

IRS Data Retrieval Tool • Applicants selected for verification – V 1 -Standard Verification • Who transfer their income tax return information unchanged using the Internal Revenue Service Data Retrieval Tool (IRS DRT) – When initially completing the FAFSA using FAFSA on the Web (FOTW) • When making corrections on FOTW • • Are considered to have verified the FAFSA IRS information • • • 70 Adjusted Gross Income, taxes paid, and the applicable untaxed income items and education credits Unless changes were made to the transferred information or institution has reason to believe that the information transferred is inaccurate School only needs to verify # in HH and # in College

IRS Data Retrieval Tool • IRS Request Flags IRS Request Flag Blank Description IRS Data Retrieval Tool not available 00 01 Student/Parent was presented with the IRS Data Retrieval Tool and elected to use it, but did not transfer IRS data into the FAFSA 02 IRS data was transferred and was not changed 03 IRS data was transferred and changed 04 IRS data was transferred and then changed on a subsequent transaction 05 Student/Parent was presented with the IRS Data Retrieval Tool and elected not to use it 06 71 Student/Parent was ineligible to use the IRS Data Retrieval Tool IRS data was transferred, but a subsequent change made the student/parent ineligible to use the IRS Data Retrieval Tool

Verification – Operations • Once a record is selected for verification: • Verification selection will not be removed Verification selection reason can only change if the record moves from V 1, V 4, or V 6 to V 5 • Verification will not be removed even if verification reason no longer exists • 72

Verification – Operations • Record selected for verification on 02 transaction, but Selected for both transactions have the Verification Flag verification on 02 transaction. 01 transaction has the * on the SAR to indicate selected for verification 73

Communication with Schools Y Auto Zero EFC Flag XXX EFC Change Flag XXXX SNT Flag XXX Rejected Status Change Flag Verification Selection Change Flag Special Circumstance Flag V 5 C X Duplicate SSN Flag XXX y Address Only Correction X X SAR C Change Flag X 2016 -2017 99999 Change in Verification Tracking Group Selected for Verification Aggregate Verification 74

Communication with Students Current SAR comments: • Dependent Student (170) • • Independent Student (171) • 75 Your FAFSA has been selected for a review process called verification. Your school has the authority to request copies of certain financial documents from you and your parent(s). Your FAFSA has been selected for a review process called verification. Your school has the authority to request copies of certain financial documents from you (and your spouse).

Verification – Operations • Reminder: If institution approves a special circumstance request and changes the student’s data, the institution must submit the changes to the CPS and set the Professional Judgment (PJ) Flag Set PJ to 1. • Note: Do not set the PJ Flag for verification corrections 76

• FAA Access – Identity Verification Results In 2014 -15 an Identity Verification Results reporting function was added to FAA Access • Schools report the identity verification results for students who have been selected for verification under V 4 or V 5 • Schools should be reporting this information on a regular basis • (Refer to Electronic Announcement posted November 6, 2014) 77

FAA Access – Identity Verification Results FAA have multiple options for loading Identity Verification Results • 2016 -2017 78

FAA Access – Identity Verification • FAAs can manually enter SSNs/Name ID/ Verification Results from a dropdown menu on this page 2016 -2017 79

FAA Access – Identity Verification Results • FAAs can upload a flat file of SSNs/Name ID/ Verification Results from their database Select file from database by browsing 0099999 2016 -2017 80

FAA Access – Identity Verification Results • Dropdown options will be 81 Verification completed in person, no issues found Verification completed remotely, no issues found Verification attempted, issues found with identity Verification attempted, issues found with HS completion No response from applicant or unable to locate

Verification – Identity Verification Data For the full application cycle, there were 355, 276 identity verification results submitted out of 528, 638 • Among the reported results, no issues were found for 49% of applicants, while issues were either found or verification could not be completed for 51% of those flagged • 82

Verification – Data Notes VRF Table 1: Data retrieved from Central Processing System (CPS). The full cycle numbers based on last transaction and includes rejected applications. VRF Table 2: Data on the number of records selected for identity verification retrieved from Central Processing System (CPS), is based on the last transaction on file for the 2014 -15 cycle, and includes rejected applications. Outcomes of identity verification based on an analysis results submitted through September 2015 by schools via FAA Access. VRF Figure 1: Data retrieved from Central Processing System (CPS). Data based on the last transaction on file through October 31, 2015, and includes rejected applications. VRF Figure 2: Data retrieved from Central Processing System (CPS). Data based on a comparison between the transaction in which an applicant was selected for verification and the last transaction on file for each respective applicant. EFC is generally not calculated on rejected transactions and are, therefore, excluded from analysis. VRF Figure 3: Data retrieved from Central Processing System (CPS). Data based on a comparison between the transaction in which an applicant was selected for verification and the last transaction on file for each respective applicant. EFC is generally not calculated on rejected transactions and are, therefore, excluded from analysis. Changes in EFC are reported in absolute value terms. 83

Verification – Resources • 2016 -17 • • 84 Federal Register Notice, published June 26, 2015, Free Application for Federal Student Aid (FAFSA) Information To Be Verified for the 2016 -17 Award Year Dear Colleague Letter GEN-15 -11, Published June 29, 2015, 2016 -17 Award Year: FAFSA Information to be Verified and Acceptable Documentation

Verification – Resources • 2016 -17 Verification Suggested Text and Availability of 2015 IRS Tax Information; Electronic Announcement Published on November 18, 2015 http: //ifap. ed. gov/eannouncements/111815 Verification. Suggested. Text. Availabi lity 2015 IRSTax. Info 20162017. html • Program Integrity Q & A Website (verification topic) http: //www 2. ed. gov/policy/highered/reg/hearulemaking/2009/integrity-qa. html 85

Unusual Enrollment History 86

Unusual Enrollment History (UEH) Beginning with the 2013 -14 award year, the Department added an Unusual Enrollment History (UEH) flag that indicates that a student has an unusual enrollment history based on the receipt of Federal Pell Grant (Pell Grant) funds • We added the flag to address possible fraud and abuse in the Title IV student aid programs • 87

Unusual Enrollment History (UEH) • We are concerned about an enrollment pattern in which a student attends an institution • • 88 long enough to receive Title IV credit balance funds, leaves without completing the enrollment period, enrolls at another institution, and repeats the pattern of remaining just long enough to collect another Title IV credit balance without having earned any academic credit

UEH – Overview Some students who have an unusual enrollment history have legitimate reasons for their enrollment at multiple institutions • However, such an enrollment history requires a review to determine whethere are valid reasons for the unusual enrollment history • Resolution of a UEH flag is separate and distinct from verification • 89

UEH – Current • For 2015 -16, Pell Grant and Direct Loan disbursement information was evaluated for the past four award years • • Loans do not include Direct Consolidation, Parent PLUS Loans, or Campus-Based Loans (e. g. , Perkins) FAFSA filers were assigned a UEH Flag of ‘N, ’ ‘ 2’ or ‘ 3’, based on the number of Pell Grant/Loan disbursements that a filer received compared to the number of schools that the individual was awarded aid 90

UEH – Current A UEH Flag value of ‘N’ indicates that there is no unusual enrollment history issue and, thus, no ‘C’ Code, no comments, and no action required by the institution • A UEH Flag with a value of ‘ 2’ indicates an unusual enrollment history that requires review by the institution of the student’s enrollment records • • An example of an enrollment pattern that generates a UEH Flag value of ‘ 2’ would be when the student received Pell Grant funds, Pell and Loans, or Loan only at three institutions over two award years 91

UEH – Current • A UEH Flag with a value of ‘ 3’ indicates that the institution must review academic records for the student and, in some instances, must collect additional documentation from the student • • 92 An example of an enrollment pattern that generates a UEH Flag value of ‘ 3’ would be when the student received Pell Grant funds at three or more institutions in one award year Note that there is no UEH Flag value of ‘ 1’

UEH – Overview Data During the 2014 -15 application cycle, 0. 9% of applications were flagged for having an Unusual Enrollment History (UEH) • To date for the 2015 -16 cycle, that figure sits at 3. 0% • 93

UEH – Resolution • Resolving Unusual Enrollment History Flags UEH Flag value is ‘N’: No action is necessary as the student’s enrollment pattern does not appear to be unusual • UEH Flag value is ‘ 2’: The institution must review the student’s enrollment and financial aid records to determine if, during the four award year review period (Award Years 2011 -12, 2012 -13, 2013 -14, and 2014 -15), the student received a Pell Grant/Direct Loan at the institution that is performing the review for 2015 -16. For 2014 -15 and prior only three award years are reviewed • 94

UEH – Resolution If so, no additional action is required unless the institution has reason to believe that the student is one who remains enrolled just long enough to collect student aid funds • If not, the institution must follow the guidance that is provided for a UEH Flag of ‘ 3’ • 95

UEH – Resolution Resolving Unusual Enrollment History Flags • • • UEH Flag value is ‘ 3’: The institution must review the student’s academic records to determine if the student received academic credit at the institutions the student attended during the four award year period (Award Years 2011 -12, 2012 -13, 2013 -14, and 2014 -15) Using information from the National Student Loan Data System (NSLDS), the institution must identify the institutions where the student received Pell Grant/Direct Loan funding over the past four award years (2011 -12, 2012 -13, 2013 -14, and 2014 -15) for 2015 -16. For 2014 -15 and prior only three award years are evaluated 96

UEH – Resolution Resolving Unusual Enrollment History Flags • • Based upon academic transcripts it may already possess, or by asking the student to provide academic transcripts or grade reports, the institution Must determine, for each of the previously attended institutions, whether academic credit was earned during the award year in which the student received Pell Grant or loan funds. For 2015 -16 review four award years and for 2014 -15 and prior review three award years and only Pell Grants • Academic credit is considered to have been earned if the academic records show that the student completed any credit-hours or clock-hours • 97

UEH – Resolution • Academic Credit Earned • • 98 If the institution determines that the student earned any academic credit at each of the previously attended institutions during the relevant award years, no further action is required Unless the institution has other reasons to believe that the student is one who enrolls just to receive the credit balance

UEH – Resolution • Academic Credit Not Earned • If the student did not earn academic credit at a previously attended institution and, if applicable, at the institution performing the review, the institution must obtain documentation from the student explaining why the student failed to earn academic credit • The institution must determine whether the documentation supports • (1) the reasons given by the student for the student’s failure to earn academic credit; and (2) that the student did not enroll only to receive credit balance funds 99

UEH – Resolution • Justification for UEH • Personal reasons • • Academic reasons • • • 100 Illness, a family emergency, a change in where the student is living, and military obligations The student might explain that the first enrollment was at an institution that presented unexpected academic challenges, or The academic program did not meet the student’s needs, as determined by the student The institution should, to the extent possible, obtain third party documentation to support the student’s claim

UEH – Eligibility after Resolution • Approval of Continued Eligibility • • • You can establish an academic plan (ex. SAP appeal plan) and/or; Counsel student on Pell Grant duration of eligibility provisions (LEU) Denial of Continued Eligibility • • You must deny additional Title IV aid if no academic credit was earned at one or more institutions and no documentation or acceptable explanation was provided for each failure Students can appeal the denial with the institution (ex. SAP determinations) 101

UEH – Eligibility after Resolution • Regaining Aid Eligibility • • If aid is denied, you must give the student information on how to regain eligibility Successful completion of academic credit is the basis for a student’s request for renewal of eligibility • • • This can include meeting the requirements of an academic plan that you establish with the student Pell Grant eligibility and campus-based aid begin with the payment period in which the student meets the eligibility requirements (following the period of ineligibility) Direct Loan eligibility is retroactive to the beginning of the enrollment period 102

UEH – FAQ • Circumstances when a student’s 2014 -15 ISIR included a UEH Flag of ‘ 2’ or ‘ 3’, but the UEH Flag value is ‘N’ on the student’s 2015 -16 ISIR • • • 103 If you have previously resolved the 2014 -15 UEH issue, there is no need for any further review If you have not satisfactorily resolved the 2014 -15 UEH issue, you should, but are not required to, hold disbursement of Title IV aid for 2015 -16 until you resolve the earlier UEH issue In doing so, you must review not only the student’s academic record for the 2011 -12, 2012 -13, and 2013 -14 award years noted in DCL GEN-15 -05, but also the more recent 2014 -15 award year

UEH – FAQ • Circumstances where you suspect that a student for whom the Department did not assign a UEH Flag of ‘ 2’ or ‘ 3’ on his ISIR may be applying for and receiving Title IV aid for purposes other than to provide financial support for postsecondary education • • In such instances, you may choose to hold disbursement of Title IV aid until you review the academic history of the student In doing so, you must document the reasons why you took this action, as well as the specific steps the institution took to resolve the institutional selection for UEH review 104

UEH – Operations Unusual Enrollment History Flag • NSLDS has edits to identify records with unusual enrollment histories and set the NSLDS Unusual Enrollment History Flag • Pre-Screening - Unusual Enrollment History Flag: Four flag values (N, Blank, 2, 3) UEH code appears here Note: 1 is not used 105 2

UEH – Operations Unusual Enrollment History Flag • FAA Access – Student Inquiry/e. SAR UEH in e. SAR 106 UEH in Student Inquiry

UEH – Operations Unusual Enrollment History Flag NSLDS Unusual Enrollment History Flag Description SAR C Flag? SAR Comment 1 N/A 2 Unusual Enrollment History 2 (Possible enrollment pattern problem, school may need to resolve) Yes 359 3 Unusual Enrollment History 3 (Questionable enrollment pattern, school must resolve) Yes 360 N For Federal Student Aid Use Only Enrollment pattern not unusual (No school action required) No N/A Record not sent for match No N/A Blank 107

UEH – Operations Unusual Enrollment History Flag • Post-screening Reason Code: • CPS system-generates a new transaction with Reason Code 24 for records that have a change in the NSLDS Unusual Enrollment History Flag value after the initial pre-screening If found during post-screening, reason code appears here #Post screening Reason 24 2 108

UEH – Operations Unusual Enrollment SAR Comment • SAR comments and the SAR C Flag will be generated for flags 2 and 3; resolution guidance provided to schools Comment No. SAR Comment School Action to include 359 Action depends on whether the school is a new school for the applicant for 2016 -2017. If not a new school, school not required to take any action but may look into the applicant’s enrollment history. If new school for applicant, school must take certain actions that will be developed by FSA and OPE policy. 360 109 Your school may request additional information to determine your eligibility for federal student aid. Note: This comment will generate a SAR C flag as already documented. Based upon data provided by the National Student Loan Data System (NSLDS), your school will request additional information to determine your eligibility for federal student aid and before disbursement of funds can be made. ” Note: This comment will generate a SAR C flag as already documented. School must take certain enhanced actions that will be developed by FSA and OPE policy.

UEH – Operations The SAR transaction includes the SAR Comment and/or a C Flag as appropriate SAR C Flag appears after the EFC 110

UEH – Data Notes UEH Data: Table 1: Data retrieved from Central Processing System (CPS). The full cycle numbers are based on last transaction and includes rejected applications. UEH Data: Figure 1: Data retrieved from Central Processing System (CPS). Data based on the last transaction on file through October 31 of the first year of each application cycle and includes rejected applications. 111

UEH – Resources • Dear Colleague Letter GEN-13 -09, Published March 8, 2013 -14 Award Year: Students with an Unusual Enrollment History Flag – ‘C’ Code on the ISIR • Dear Colleague Letter GEN-15 -05, Published March 16, 2015 -16 Unusual Enrollment History Flag • 2015 -16 ISIR Guide 112

Planned Application Changes for 2017 -18 113

Changes to the FAFSA for 2017 -18 Students will be able to submit a 2017 -18 FAFSA as early as October 1, 2016, rather than beginning on January 1, 2017. • Students and parents will report income information from an earlier tax year (2015 instead of 2016). • 114

Changes to the FAFSA for 2017 -18 The colleges listed by applicants on the FAFSA will no longer be sent to states in the order in which they’re listed • The pre-printed FAFSA will no longer be available. The PDF FAFSA will still be available for download across multiple Federal Student Aid websites • 115

Important Dates 116

Important Dates January 2015 • 2015 -16 Application Processing System Specifications for Software Developers – Final (posted 1/13/2015) September 2015 • • 117 2016 -17 Application Processing System Specifications for Software Developers – Draft (posted 9/9/2015) 2016 -17 EDE Technical Reference - Draft (posted 9/23/2015)

Important Dates (cont. ) October 2015 2016 -17 EFC Formula Guide (posted 10/6/2015) 2016 -17 CPS Test System User Guide (posted 10/16/2015) • • November 2015 • • 118 2016 -17 SAR Comment Codes and Text (posted 11/17/2015) 2016 -17 Electronic Data Exchange (EDE) Technical Reference - Final (posted 11/17/2015)

Important Dates (cont. ) December 2015 • • • 2016 -17 Summary of Changes for the Application Processing System Guide 2016 -17 ISIR Guide FAFSA on the Web Preview Presentation The CPS Test System is made available CPS Web Applications Demo System, December 27, 2015 119

Important Dates (cont. ) January 2016 Application launch, January 1, 2016 • February 2016 • 120 IRS Data Retrieval Tool, February 7, 2016

Contact Information Carney Mc. Cullough Director, Policy Development Group Office of Postsecondary Education Phone: 202 -502 -7639 E-mail: Carney. Mc. Cullough@ed. gov Misty Parkinson Director, Applicant Products and Customer Service Division Federal Student Aid Phone: 202 -377 -3749 E-mail: Misty. Parkinson@ed. gov 121 Ed Pacchetti Director, Customer Analytics Federal Student Aid Phone: 202 -377 -3877 E-mail: Ed. Pacchetti@ed. gov Maria Marella Application Processing Verification Operations Team Lead Federal Student Aid Phone: 312 -730 -1551 E-mail: Maria. Marella@ed. gov