FSA's Federal Update in Summary

By Rick Cox

The latest in Federal Updates from FSA’s 2022 conference contains news on some of financial aid's most followed topics. Here are highlights for financial aid administrators.

• Predispute Arbitration Agreements in place must be amended to include the required text provided by the Department of Education.
• The IRS’s Data Retrieval Tool is now FADDX, or Direct Data Exchange, which will directly send student income information from the IRS to FSA in the 2024-2025 year.
• CPS will be retired and will be replaced by FPS.
• IPA will have increased income in 2024-2025.
• The one-time adjustment to provide credit toward IDR and PSLF is scheduled to occur on or after July 1, 2023.
• The history of Negotiated Rulemaking was discussed, as well as items that made final regulations, with implementation set for July 1, 2023. Consensus was approached on an issue-by-issue basis instead of trying to approve the full package under consideration.
• Consensus was reached on the following items:
  ۰ TPD (Total and Permanent Disability Discharge)
  ۰ Interest Capitalization
  ۰ False Certification Discharge
  ۰ Prison Education Programs (PEP)
• Consensus was not reached on these items:
  ۰ Closed School Discharge
  ۰ PSLF (Public Service Loan Forgiveness)
  ۰ Borrower Defense to Repayment (BD)
  ۰ Predispute Arbitration
  ۰ Income Driven Repayment (IDR) Plan
• The requirement for schools offering distance education to all be handled under the main campus was removed from the final regulations.
• FAFSA Simplification requirements implemented for 2023-2024 follow:
  ۰ Removal of all questions or references to Selective Service and drug conviction on the FAFSA
  ۰ Additional demographic survey on sex/gender and race/ethnicity
  ۰ Expansion of Pell LEU restoration
  ۰ Pell eligibility extended to incarcerated students
  ۰ Carry over of answers to the homelessness and unaccompanied youth questions
  ۰ Changes in COA and Professional Judgment (EFC adjustments now referred to as special circumstances and Dependency Overrides referred to as unusual circumstances)
  ۰ Changes for applicants who cannot provide parental information
  ۰ Expanding acceptable documentation for homeless/unaccompanied youth
• FAFSA Simplification changes required for 2024-2025 are:
  ۰ Federal Work Study earnings will be collected/reported in COD. Updating the 2022 FWS earning into COD will be required before October 1, 2023.
  ۰ Expect changes to verification criteria
  ۰ Changes in Pell Grant calculation
  ۰ Income information that was provided by the IRS’s Data Retrieval Tool will now be provided through Direct Data Exchange (DDX)
  ۰ The FAFSA experience for students should be improved with few questions and roles-driven questions
  ۰ EFC will be replaced by SAI (Student Aid Index) and EFA (Estimated Financial Assistance) replaced with OFA (Other Financial Assistance)

Debt relief, payment pause and Fresh Start programs and how these benefit students were also discussed.

Maximum Pell Grant for the 2023-2024 award year has not been set due to waiting on appropriation of the funding.

The COVID-19 national emergency continues through at least February 2023. At this time, waivers are in place and won't end or be phased out until the national emergency is declared over.

Rick Cox is Global’s Executive Director of Regulatory Affairs and Compliance