The following are notes of items of interest from the 2018 FSA Conference



10% of all FAFSAs are being filed using the mobile app.

ED wants to reduce the burden on students selected for verification. The 19-20 selection rates are much lower than this period for 18-19. The 18-19 rates were much higher than ED anticipated.

ED will be issuing guidance soon that will allow for the use of paper returns. It’s anticipated that this will be applicable to 18-19. Nonfilers who are unable to obtain documentation of nonfiling status will be permitted to submit a statement of nonfiling status if the FAO has no reason to doubt the student/parent. ED should be providing this guidance in the next few weeks.

Betsy Devos indicated we have a crisis related to FSA loans (~43% of all loans are in distress). The total loans held by ED are nearly 1.5 trillion dollars and is a larger portfolio than any private lender’s loan portfolio. It’s also approximately equal to 10% of our national debt.

ED encourages all organizations working with students to look for ways to improve Student Financial Literacy. ED is currently working on better communication with borrowers using the mobile app.


Negotiated rulemaking will begin in January. ED will bring specific proposals to the 1st round of negotiated rulemaking.

ED is still working on the Borrower Defense NPRM comments. ED is also still working on the GE NPRM comments. ED is hoping to issue the final rules in the near future.

New Pell payment schedules should be issued in the next few weeks.

The appropriations bill provided for new assistance for borrowers undergoing cancer treatment. These borrowers can receive interest subsidy (on all loan types) during cancer treatment and for 6 months after treatment. A new deferment form will be issued soon.

The federal share of Perkins funds to be returned will not consider unreimbursed cancellations. ED will provide an update on cancellations in the near future.

The redacted versions of the IRS tax transcripts are still acceptable for verification. Taxpayers can use a customer file # that may be helpful in identifying the taxpayer on the redacted transcripts (can’t be the same as the SSN).

The IRS will be eliminating the 1040A and 1040EZ for 2018 and creating 6 new schedules. This will impact determination of eligibility for Simplified Needs Test and Automatic Zero EFC. At this time, ED believes that those that file the new Schedule 1 will be similar to those that were required to file a 1040.
Those that weren’t required to file a Schedule 1 will be similar to those that were eligible to file a 1040A or 1040EZ.

Cohort Default Rates decreased this year to 10.8%.

ED will be announcing soon additional steps to help students impacted by recent disasters.


Although ED has announced that we will be permitted to accept copies of paper returns and signed statements of nonfiling status, ED reminded us that the existing requirements are still in place until that new guidance is issued.

Verification numbers are about 1/3 less than this time last year. Machine Model is being used for selections. ED believes this will assist in reducing the number of students being selected for verification.

IRS will be revamping the tax forms by possibly doing away with the 1040 EZ and 1040A.

Income Verification Express Service (IVES)
• No fees for Title IV Recipients
• Go to E-Services on IRS.GOV for more information


The remainder of the 18-19 FSA Handbook should be posted in the next week.

The new data for the Shopping Sheet should be out soon.

ED is working with the IRS on the new tax forms and how the impact the new forms will have. The new forms combine IRA distributions and Distributions of Pensions so these two questions might be combined on the FAFSA. Additionally, the new forms do not have a numeric value for exemptions so ED is working with the IRS to determine if there is a way for this to transfer over in DRT or if this question should be eliminated. The new tax forms are for the 2018 tax year and will impact 20-21 award year.

The update to the federal register for award year deadlines should be published in the next few weeks.

The aid for Children of Fallen Heroes Scholarship Program is Title IV aid and is subject to R2T4.

There were several questions related to consent by the student/parent to participate in electronic communications. After several discussions on this, ED indicates schools should refer to their legal counsel on what would constitute consent.

ED’s goal going forward is to be timelier on Program Reviews (goal is 6 months or less).

You are not required to verify wages for a tax filer and are not required to update them to agree to the tax transcript. But, you can choose to do so.

ED will consider adding social work clinical to the existing guidance on clinical work applicable to the medical/dental/teaching clinical work. ED did not want this guidance to apply to all clinical work/externships/internships.

IRS Request Flags 06 and 07 and Comment Codes 400 and 401 will continue at least through 20/21 award year.


As a reminder, if your GE Program had a failing rate, you are required to post the warning. ED is not planning on doing a 2nd round of GE rates. However, the existing regulations are still in place until new final rules are issued and made effective.

Under the borrower defense regulations, if the repayment rate is less than 50%, you will be required to provide a warning. The average is 24%. 2000 proprietary institutions have repayment rates below 50%.


ED has rebranded all customer facing elements for a unified and consistent brand.

ED anticipates that at some point, borrowers will be able to do an MPN on the mobile app.

ED wants us to encourage students to use the mobile app.

ED’s focus is one phone number (1-800-4-FED-AID) and one website.


The mobile app has the same data protection as

Students are able to provide feedback to improve text on the mobile app.

Applicants/Parents are able to go back and forth between the mobile app and the website. However, if you start on the app and then move the website, all the data is saved but you must navigate all the way through the application until you reach the next section to be completed.

IRS DRT is used by slightly more than 50% of applicants.

More sections of will become more mobile friendly.

The 20/21 FAFSA will be updated to reflect the recent changes IRS made to the tax forms (in effect for the 2018 tax year forward).

FAA Access will be used to report applicants who are eligible for the Children of Fallen Heroes Scholarship. This will then set a flag on the ISIR. Remember – there is no database to confirm a match and the colleges will be responsible for documenting the student meet the requirements for the Children of Fallen Heroes Scholarship.

Upcoming Phase 3 will redesign the correction process. There will be limited correction capability for applicants. The can only add or change schools – nothing else. Applicants will be able to view their SAR.

ED will be masking the SSN on the login view both on the and the mobile app.

ED will be aligning and the mobile app.

The ISIR will indicate whether the application was filed using the mobile app or through


Link to updated Q&As (updated June 2018) -

Auditor must report all 90/10 errors no matter how minor they are.
The auditor must review the 3rd party servicer contract and understand which responsibilities are the schools and which are the servicer’s responsibilities.

The auditor must complete the servicer information sheet. This is specific to that particular school.

For transfer student purposes related to the audit, these are students who transfer within the same award year.

Some errors noted:

  • Auditors are reporting net aid amounts instead of gross;
  • Only reporting withdrawals for which a return was made instead of total withdrawals;
  • Only reporting withdrawals for which a return was made instead of total withdrawals;
  • Not obtaining student level details to properly test the 90/10 calculation;
  • Not testing appropriate number of individuals regarding incentive compensation.


Foreign gifts and contracts need to be reported through the e-app process twice per year. This does not show on the ECAR.

Reminded schools to report changes to the Board of Directors and if possible, include a middle initial. Also, indicate an end date.

Need to provide an update if the 3rd party servicer contact is significantly updated.

If an additional location will offer less than 50% of the program, you don’t report it to add and you don’t need to list it on your ECAR. If it’s 50% or more, it must be reported to ED before disbursing. If the school is provisionally certified or on HCM1/HCM2/Reimbursement, you must wait for approval before disbursing. You must also wait for approval if you are acquiring the assets of another institution subject to loss of eligibility because of default rates or if ED has included a provision in your PPA that approval must be obtained before disbursing. Schools should consult with their SPT if the additional location was a facility of another school or if you are providing a teach out at the location of a closing school.

You must report new programs before disbursing if:

  • The school is provisionally certified;
  • The school is on HCM1/HCM2/Reimbursement;
  • It’s a Direct Assessment Program;
  • It’s a CTP Program;
  • School is subject to the 2 year rule;
  • PPA includes a provision that approval is required.

GE Programs – you must submit the updated program on the e-app within 10 days of receiving approval from your state licensing agency and accrediting agency. You are not required to wait for approval unless subject to the restrictions noted above. However, if ED does not approve the program, the school is liable for all disbursements made.

Public and nonprofit institutions don’t need to report degree programs. Proprietary institutions must report all programs, including degree programs.

When updating the e-app, the program must match in name and length with the accrediting and state licensing approvals. The CIP code needs to be consistent with the name of the program and the program must lead to a recognized occupation (SOC Code). The program must meet the minimum number of weeks and hours and meet the clock to credit conversion requirements where required. The program cannot exceed by more than 50% the state requirements for that occupation.

For GE Programs (adding or discontinuing, GE Program loses eligibility, name change, change to CIP code or length of program) you must also do the GE certification (see GE Electronic Announcement 77 for certification language). This must be submitted for all GE Programs or the program won’t be approved and you will have to submit it for approval.

Once the e-app has been processed, you have 30 days to sign and return two copies of the PPA.

Common mistakes:

  • If more than one update is being done, you need to check the box for each purpose;
  • If updates are being reported on a recertification, you only need to select recertification as the purpose.

You need to ensure the phone numbers being reported for institutional officers are direct lines and not the main number.

ED’s goal is to review new programs and/or changes within 30 days.

Cybersecurity is one of 7 critical issues facing higher education.

To be successful, cybersecurity needs to be an organizational wide approach and not just for specific areas.

Everyone is responsible for cyber risk and security.

For passwords, the longer the password, the longer it takes for an outside person to crack it.


Programs are reported in weeks, months, or years. If the length of the program is published, you report what is published. If it’s not published, you report 2 years for Associate Degrees and 4 years for Bachelor Degrees. Bachelor completion programs are reported as 4 years.

COD rounds to the loan level. So, if you have 4 SUPs, .25 X 4 = 1.2 years (.25 rounds to .3). If you have 3 SUPs, .33 X 3 = .9 (.33 rounds to .3).

If multiple disbursements are made within a payment period, COD uses the enrollment status for the 1st disbursement and applies it to the entire payment period.

COD treats a rejected record as if it was never sent. If trying to zero out disbursements for a rejected loan, these will reject also.

COD will not make changes to academic year dates. This must be done by the school.
When a closed award year is reopened, an email is sent to the school’s president.


There will be changes on the FISAP for 2020-21 when reporting on behalf of additional institutions. In Part 1 a change will be made to field 5. It will be required to list the amount allocated to each institution and verify that each institution listed is independently eligible for CB Programs.

Verify Part II data Before December 15th and again After tentative awards – there will be no increases after finals.

Part VI – Program Summary
Calculating the Administrative Cost Allowance (ACA) for FWS and FSEOG

  • No more Perkins ACA
  • Must claim before December 15th – No increases permitted

Summer 2019 Electronic Announcements will announce the availability of the 2020-21 FISAP.

ED is discussing the need to determine thresholds for updating the FISAP due to refunds. They did not provide a timeline on when this may take affect but has been included in many discussions.

Getting the Most out of Year-Round Federal Pell Grants

OLD - Students must be less-than-halftime enrollment eligible at all times.
New – Must be enrolled at least half-time to receive the additional award.
The AEI is the means of confirming Year-round Pell eligibility and is only required to be reported on Eligible students as true to certify eligibility between 100-150%.
The Total Eligibility Used (TEU) is the amount of Pell disbursed in all schools for one Academic Year.

COD Technical Reference Volume 2, Section 4 is best used for identifying Year-round Pell Grant Issues.
COD Technical Reference Volume 6, Section 8 is best used for reviewing reports with AEI Pell Grant Issues.

Common Origination and Disbursement (COD) Update:
Release 18.0 – Implementation early April, 2019

  • New AY Set-up for 19-20
  • No new schema
  • CFH Indicator added to 19-20 Pell MRR, Pell Reconciliation, and Pell Grant Year-to Date files
  • Process Demonstrations
  • Return of Title IV migrating to COD
  • FISAP Validation Edits