Posted Date: July 18, 2014

Author:  Lisa DiCarlo, Director, Student Experience Group, Federal Student Aid
Jeff Baker, Director, Policy Liaison and Implementation, Federal Student Aid

Subject: Issue Alert - Upcoming CPS Reprocessing of Records with Questionable Income Earned from Work Values

Issue

A number of schools have reported that they are finding a high number of applicants with incorrect Income Earned From Work values on 2014-2015 Institutional Student Information Records (ISIRs). We have determined that in most of these cases, the applicant or parent entered cents in the income fields when using FAFSA on the Web instead of rounding to the nearest dollar amount as instructed by the FAFSA on the Web help text and shown on the form:

Picture of the dollar input box field

For example, an applicant with an Income Earned from Work value of $5,000.19 who, as a result of entering both the dollars and cents would have, instead of the correct value of $5,000, a value of $500,019 used in the calculation of the applicant’s Expected Family Contribution (EFC). This would likely result in an incorrect determination of the applicant’s eligibility for a Federal Pell Grant and for other subsidized aid. And, because of the intricacies of the EFC calculation, the Student Aid Reports (SARs) and ISIRs showed many of these applicants as being Pell Grant eligible when, with the correct information, they are not Pell eligible. Although some applicants and many institutions have already identified and corrected the error, not all necessary corrections have been made.

System Correction

On July 1, 2014 we implemented enhancements to FAFSA on the Web that will help applicants better navigate this portion of the site and reduce or eliminate the likelihood of this type of reporting error. First, we changed the entry format for all financial fields so that entries are right-justified as the digits are entered and display immediately preceding the already provided ‘.00’ (cents). Second, when a decimal point is input by the applicant, the site will drop the decimal point and any following digits.

Reprocessing

Even though the above enhancements will eliminate these types of errors in the future, we must ensure that applicants who had made these errors are identified, so that their institutions can work with them to make any necessary corrections. To do so, on the evening of Monday, July 21, 2014, the Central Processing System (CPS) will create system-generated transactions for these applicants.

That will result in new ISIRs being sent to the schools listed on the applicant’s latest CPS transaction and a new SAR being sent to the applicant.

Our initial analysis is that fewer than 200,000 applicants are affected nationwide, with 63 percent of our institutions having fewer than 10 applicants each and another 31 percent having between 10 and 100 applicants each. The remaining six percent will have more than 100 applicants each. In general, schools with higher numbers of affected applicants will be those with higher numbers of FAFSA applicants.

The system-generated SARs will include a comment (Comment Code 023) that will say:

This SAR was produced because an analysis we conducted on the information you reported on your application indicates you may have made an error which could affect your eligibility for federal student aid. Review all financial fields and make any necessary corrections.

The ISIRs produced as a result of the July reprocessing will be sent under the IGSG15OP message class and will include, in addition to Comment Code 023, a value of “02” for the Reprocessed Reason Code (ISIR field #230).

The FAA Information page in Student Inquiry on the FAA Access to CPS Online Web site will initially display only the Reprocessing Code of “02” for the transactions resulting from the July 2014 reprocessing. In late September 2014, we will enhance the Web site to display a full description as follows: “02 - Reprocessed due to Income Earned from Work query result”.

Resolution

Because of the likelihood that an earlier transaction included an incorrect EFC, for each identified reprocessed ISIR, the institution must review, at a minimum, the applicant’s (and if appropriate the applicant’s spouse’s or parent’s) Adjusted Gross Income and Income Earned From Work fields to confirm their accuracy or to make any necessary corrections. Institutions should also review other financial data fields (e.g., income tax paid, assets, untaxed income).

The evaluation may include reviewing documents the institution already possesses (e.g., IRS tax returns or tax return transcripts) or it may require the institution to contact the applicant to obtain either confirmation of the originally reported amount or documentation that can be used by the institution to make the required correction(s). It is acceptable for the institution to use as documentation a notation of a phone call or an e-mail from the applicant or parent, as appropriate.

The review (and any subsequent corrections) should be completed before subsidized Title IV aid is disbursed for the 2014-2015 award year. If such aid has already been disbursed the institution may need to change awards and return (or have the student return) any overawarded funds.

Contact Information

If you have any questions regarding the requirement for institutional review of reprocessed records, contact Kerri Moseley-Hobbs at Kerri.MoseleyHobbs@ed.gov.

If you have any questions regarding the reprocessing described in this message, contact CPS/SAIG Technical Support at 800/330-5947 (TDD/TTY 800/511-5806) or by e-mail at CPSSAIG@ed.gov.

You can also post questions to FSATECH. FSATECH is an electronic mailing list for technical questions about Federal Student Aid systems, software, and mainframe products. For more information on subscribing to FSATECH, go to: http://www.ed.gov/offices/OSFAP/services/fsatechsubscribe.html.

We thank you in advance for your cooperation in resolving this issue so that we can be certain that the correct eligibility for Title IV aid is determined.

   

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