2001-2002 Errata Document

2001-2002 SFA Handbook Errata (Revised on September 5, 2001)

During the printing process, several corrections and policy changes were made to contents of the 2001-2002 Student Financial Aid Handbook. The print copy reflects those changes, and we are posting this list of changes for those of you who downloaded and printed the original PDF editions that were posted to IFAP.

The PDF files on IFAP now correspond to the final print version. Changes/corrections subsequent to the Handbook print edition are listed as "corrections identified after printing," but the PDF files will remain consistent with the print copy.

Application / Verification Guide

Vol. 1: Student Eligibility

Vol. 2: Institutional Eligibility

Vol. 3: Pell Grant Program

Vol. 5: Perkins Loans

Vol. 6: Work-Study

Vol. 7: FSEOG

Vol. 8: Direct and FFEL Loans

Vol. 9: State Grants

Application/Verification Guide: Changes from Original Web PDFs

1. On page AVG-16, the margin note on treatment of W-2 Box 14 items has been removed. The Department had issued this guidance in individual cases in the past, with the indication that the issue would be further explored. In an upcoming Dear Colleague Letter, new guidance will remove all Box 14 items from consideration in the need analysis.

2. On page AVG-20, the definition of family farm in the margin has been revised so that a family farm is one that is the primary place of residence for the student and his/her family, and in which the student (and, for dependent students, parents) materially participated.

3. On pages AVG-45 and 47, the reference to letter 1722 has been removed and replaced with the phrase "tax transcript" to eliminate confusion when students request tax return data from the IRS.

4. On page 68-AVG, the page number has been changed to AVG-68, and the phone number for the Chicago OIG office has been changed to (312) 353-7891.

Corrections identified after printing

1. On page AVG-47, under "If a tax return isn't available," in the second paragraph delete the parenthetical phrase "(and a parent, if the student is dependent)" since the parent's signature isn't required for a tax form that pertains only to the student.

2. On page AVG-32, The first sentence for Questions 66-69 states that the questions are not used for the need analysis. This is wrong---both question 66 and 69 are used in the need analysis.

Volume 1, Student Eligibility: Changes from Original Web PDFs

1. On page 1-28, in the margin note "Use of Copy of I-94," a refugee or asylee does not submit an original I-94 when applying for a change in status, so the note was amended to reflect that.

2. On page 1-55, the paragraphs under "Bankruptcy" were modified to show that the guidance applies in the case of a borrower who has listed a defaulted loan or a grant overpayment in a pending bankruptcy case.

Corrections identified after printing

1. On page 1-55, under "Total and permanent disability cancellation," the date for the beginning of the establishment of the three-year conditional discharge period should be July 1, 2002 and not 2001. The three-year period that follows loans discharged for total and permanent disability between July 1, 2001 and June 30, 2002 is not a conditional discharge period because the loan will actually be discharged; if such a borrower then tries to get another loan within three years of the discharge, the discharged loan must be reinstated. Also, the certification from the physician must state that the student can engage in substantial gainful activity---the alternative about being able to attend school is not an option

Volume 2, Institution Eligibility and Participation: Changes from Original Web PDFs

1. In Chapter 1, on page 2-20 we re-ordered the paragraphs. On page 2-21, we revised the first paragraph after the formulas so that the text more accurately reflects the results of the required calculations. The school uses the resulting number of credit hours to determine if a program is eligible under the eligible program requirements explained under Types of eligible programs at a proprietary or postsecondary vocational institution.

In order to meet minimum eligibility standards, the conversion formula must yield one of the following results:

* a program offered in semesters or trimesters must provide at least 16 semester or trimester credit hours over 15 weeks;

* a program offered in quarters hours must provide at least 24 quarter credit hours over 15 weeks;

* a ten week program that admits as regular students only persons who have completed the equivalent of an associate degree must provide at least 8 semester or trimester credit hours, or 12 quarter credit hours.

5. In chapter 6, on page 2-140, under "Grant Overpayments," we have clarified the timeframe in which we expect an institution to report to NSLDS a student who has failed to take one of the three positive actions to extend his or her eligibility within the 45-day period. The addition reads:

If no positive action is taken by a student during the 45-day period, the school should report the overpayment to NSLDS immediately after the 45-day period has elapsed. Because making this change in the NSLDS system is a simple process, we expect an institution will complete it within a few days after the end of the 45-day period.

6. In chapter 6, on page 2-143, in the margin, we added a discussion of a how a school returns Pell funds repaid by students who have made arrangements with the school.

To return current year Pell funds repaid by a student, a school enters (in RFMS) a negative disbursement for the amount of the payment, and deposits the funds in its Pell account. If a student makes a payment on a previous years Pell overpayment, a school makes the aforementioned RFMS entry, and returns the funds to the Department using the same procedures the school follows when making other GAPS returns.

Pell Award after Return of Funds and Transfer to a New School

Consider a student who is eligible for Federal Pell Grant funds and who transfers from one school (school A) to another school (school B) within the same award year. Before paying any Pell funds to the student, school B must determine the percentage of eligibility remaining to the student. After transferring, a student's remaining Pell Grant eligibility during an award year is equal to the percentage of the student's Scheduled Award that remains unused times the student's scheduled award at the new school. (A Scheduled Award is the amount of Federal Pell Grant funds a student with a specific EFC and COA would receive in an award year if he or she attends full-time for the entire academic year. An Annual Award is the amount of Federal Pell Grant funds a student with a specific EFC and COA would receive in an award year based on the "Disbursement Schedule" appropriate to his or her enrollment status.)

School B may pay the student a Pell Grant only for that portion of an academic year in which the student is enrolled and in attendance at school B. The grant must be adjusted, as necessary to ensure that the funds received by the student for the award year do not exceed the student's scheduled award for that award year.

The award for each payment period is calculated using the (full) Scheduled Award. The student receives a full award until the student has received 100% of the student's remaining eligibility. This avoids a school having to ration the remaining amount by splitting it evenly across the remaining terms.

To calculate a transfer students' remaining eligibility, School B must first determine what percentage of the Scheduled Award the student used at School A. On the student's current ISIR, in a section headed 200X - 200X Pell Payment Data, school B will find an entry for % Sch. Used. School B subtracts the percentage listed under % Sch. Used from 100%. The remainder is the unused percentage of the student's scheduled award - the percentage the student may receive at school B. (One uses percentages rather than dollars because a transfer student may have different scheduled awards at the two schools, and using percentages rather than dollars adjusts for this possible difference.) School B then multiplies the percent of eligibility remaining times the scheduled award at the new school. The result is the maximum amount of Federal Pell Grant funds the student may receive at school B during the balance of the award year.

Note: Following the appropriate procedures relative to the figure reported in % Sch. Used will ensure that a transfer student does not receive more than 100% of the student's scheduled award. Therefore, school B may ignore the actual grant and overpayment amounts from school A in school B's calculations.

Example of Calculating a Pell Award After Return and Transfer

On August 21, 2000, Trillian Prefect enrolled at Milliways Community College (MCC). After just two weeks, Trillian decided that she preferred studying purely technical subjects. She withdrew from MCC, and on September 5, 2000 began studying robotics at Vogon Technical Training Center (VTTC).

When the financial aid officer at VTTC examined Trillian's 2000-2001 ISIR, he found the following entry:

%Sch.Used: 10.0 As Of: 09/01/2000 Pell Verification EFC: 0

The aid officer subtracted the 10% used previously from 100% and found that the percentage of Trillian's Scheduled Award that remained unused was 90%. Therefore, Trillian was eligible to receive 90% of her scheduled award during the balance of the award year. The costs at VTTC are much higher than those at MCC. Trillian's scheduled award at VTTC was $3,750.00.

The aid officer performed the required multiplication and determined that Trillian could receive as much as $3,375.00 (.90 X 3,750 = 3,375) if she remained enrolled at VTTC for the balance of the year.

During the first semester, Trillian received $1,875 (3375 / 2 = 1,875) in Pell funds. However, in the second semester, Trillian could only receive funds until her total reached $3,375. Therefore, for that semester, she could only receive $1,500 (3,375 - 1,875 = 1,500).

Volume 3, Federal Pell Grant Program: Changes from Original Web PDFs

1. Pages 3-43 through 3-45 have been edited to more clearly present the formulas.

Corrections Identified after printing:

1. For Chapter 2 only, Calculating the Federal Pell Grant--Subtract two from the listed page numbers when referencing subject headings in the printed handbook. Printed TOC page numbers for chapter 2 are correct for the electronic version on IFAP.

2. Page 3-11: Valid output document clarified. Text added under heading--"Documenting the Student's Eligibility for Payment," third and forth sentences should read "A valid output document is one in which all the information used to calculate the EFC is complete and accurate. The school must have received a valid output document containing an eligible nine-month EFC while the student is still enrolled and eligible." (text added on page 11 and in between what is currently on page 11 and p.12.

3. Page 3-13: The 2001-2002 deadline notice will be published in August, 2001, not July

4. Page 3-14: verification extension deadline is Sept 3rd, 2002, not August 31st

5. Page 3-39: Cite on Formula 1 Calculation should reference only 34 CFR 690.63(b)(3), not (4)

6. Page 3-40: Formula 3 Calculation Cite should read 34 CFR 690.63 (d)(3)

7. Page 3-47: Example mentioned in first paragraph is on page 48 in printed ver, p.50 on IFAP

8. Page 3-51: Crossover Payment Period, Checking Remaining Eligibility Example: replace "term" with "award year" in last sentence

9. Page 3-52: SAR item codes updated in #3 from 88 and 98 to 86 and 97 respectively

10. Page 3-62: Updated URL is now: http://ifap.ed.gov/IFAPWebApp/currentPGRFMSProcessPag.jsp

11. Page 3-63: Last sentence of paragraph defining origination records should read: "The origination record allows RFMS to receive and edit the data to ensure that the student is eligible for the reported Pell amount and to establish the student account in RFMS.

12. Page 3-70: Last paragraph under disbursement Record Acknowledgment: replace "origination record" with "disbursement record"

13. Page 3-82: Reviewing Eligibility Before Payment Cite: Changed to 34 CFR 668.32, 690.75

14. Page 3-83: Under the heading "Payment Options," instead of Ch. 9 of Volume 1, Student Eligibility, see the Application and Verification Guide, Chapter 4, for information on when a student's data must be reprocessed and Chapter 3 of the Application and Verification Guide for information on verification exemptions.

Volume 5 Perkins Loans: Changes from Original Web PDFs

1. Page 18: Changed sentence: A school must use a promissory note that the Department has approved. In Dear Colleague Letter CB-96-8, dated May 1996, and Dear Colleague Letter CB-93-9, dated July 1993, the Department issued both open-ended and closed-ended approved promissory notes for NDSLs and Perkins Loans.

2. Page 18: Added sentences after first paragraph under "Approved Promissory Notes:" If a school uses the July 1993 promissory notes, the school must obtain the borrower's signature for each advance (disbursement) of the loan. If a school uses the May 1996 promissory notes, the school must obtain the borrower's signature only once each award year.

3. Page 18: Deleted paragraph: If a school uses multiple disbursements on a closed promissory note, the borrower must sign for each advance. If there will be only one disbursement, the borrower's signature at the end of the note is sufficient.

4. Page 18: Added sentence: The borrower signs next to the specified amount of the approved loan each time the school awards a new loan. (For July 1993 promissory notes, the borrower must sign the "Schedule of Advances" each time she receives a disbursement.)

5. Page 19: Changed heading: "Changes in Loan Amount Ð May 1996 Notes"

6. Page 31: Edited Graphic "Low-Income Individual Maximum 2000 Income Levels for 2001-2002 Award Year": (in second row of table) Maximum 2000 Income Level

Volume 6 Federal Work-Study: Corrections Identified after Printing:

1. Page 10: Edited Paragraph: The 90% federal share is limited to no more than... the 10% limit on the number of students paid with the 90% federal share does not include student...

Volume 7 FSEOG: Changes from Original Web PDFs

1. Page 5: Added footnote: 1. For example, state scholarships and foundations or other charitable organization funds.

Volume 8, Direct Loan and FFEL Programs: Changes from Original Web PDFs

1. Page 8-17: Corrected sidebar charts which were incomplete

2. Page 8-27: Added new sidebar note on e-signature guidance

3. Page 8-30: Changed text from "In some cases, a new MPN the former MPN has expired." to "In some cases, a new MPN will have to be executed because the multi-year feature of the former MPN has expired."

4. Page 8-33/34: Title: "Number of disbursements" moved from bottom of 8-33 to text it heads on 8-34

5. Page 8-59: Added missing chart: Entrance Counseling/Exit Counseling Note that insertion of missing p 8-59 changes all the subsequent pagination by 2 so that chapters start on an odd # page.

Volume 9, State Grant Programs: Corrections Identified after Printing:

1. Page 9-1: In the paragraph beginning "The SLEAP Program..." has been changed to read "...to assist them in providing grants, scholarships, and community service work-study assistance to eligible needy postsecondary students.

2. Page 9-12: clarification added to first sentence of 2nd explanatory paragraph of the SLEAP Program--"...or by increasing the number of LEAP Program community service work-study recipients. The $5,000 maximum LEAP..."(rest unchanged). 3rd explanatory paragraph on same page should read "Award scholarships to eligible students for merit and academic achievement, or for critical careers. Scholarships for merit and academic achievement can be awarded to eligible students pursuing any field of study...(rest unchanged).

Further changes to the SFA Handbook will be reported when available

SFA Schools ChannelResearch and Publications Group

SFASchoolsPubs@ed.gov

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