FAFSA 101 - High Level Overview

1. FAFSA 101 -High Level Overview Rachel Coghlan, October 8, 2015

2. Agenda • Present an high-level overview of the FAFSA and Central Processing System (CPS) lifecycle • High level changes for 2016 - 2017

3. What is the Central Processing System? • Center of a large process designed to deliver billions of dollars of federal student aid • Primary role is to process financial aid applications (FAFSA forms) to determine eligibility • Interacts with: • Millions of students and their families • Thousands of postsecondary institutions • Federal agencies • Contractors • Private and State agencies

4. Also known as • Different acronyms associated with CPS: • Front End Business Integration (FEBI) • Application Eligibility Determination System (AEDS) • That FAFSA system

5. IRS EDE Destinations (Schools, States and Servicers) FAFSA (IDC) FAFSA on the Web Products SAIG Internet FSAIC Social Security Admin. CPS COD Selective Service Dept. of Homeland Security Veterans Admin. NSLDS

6. What is the Central Processing System? • System is organized around three major components which interact: • Web Applications: Inputs and Outputs • Eligibility Determination (a.k.a. Mainframe, CPS): Processing • PC Software: Inputs and Outputs

7. Eligibility Determination Functions • Receives data • Processes data • Calculates EFC • Disseminates data to students, schools and other agencies • Performs analysis

8. FAFSA Data Inputs FAFSA on the Web Products FAA Access from Institution EDE from Institution IDC

9. Receive Data Paper Options for Submitting FAFSA Data • FAFSA form (English and Spanish, preprinted or PDF) • Corrections (SAR/Letters) • Submitted to Image Data Capture (IDC) where forms are scanned, imaged and data collected

10. Paper FAFSA Processing FAFSA completed SAR/ E-mail IDC Institution ISIR Data

11. Receive Data Web Options for Submitting FAFSA Data • FAFSA (English and Spanish) • Renewal FAFSA (English and Spanish) • Corrections • FAFSA on the Phone (thru FSAIC) • Submitted by applicants and parents through website

12. Web FAFSA Processing Institutions FOTW SAR Ack/ E-mail ISIR Data

13. Receive Data Options for Submitting FAFSA Data • Schools and Third Party Servicers • FAFSA • Renewal FAFSA • Corrections • Submitted using FAA Access on the Web or EDconnect/SAIG

14. Web/EDE FAFSA Processing EDE thru Institutions FAA Access SAR Ack/E-mail ISIR Data Sent

15. Receive Data • Electronic Receipt and Editing is run on all the FAFSA data that is received • Ensures data and files are valid • Uses data from PEPS interface to verify school codes • Applies data from corrections to data already on database • Pulls forward and converts previous cycle data for Renewal Applications • Checks each field for length and valid values • Sets record source code (type of input) • Common set of code is used for records being entered through the web and all processed paper and electronic records • Some edits apply only to web records and some apply only to paper records

16. Process Data – Matches • External Matches – data is sent to: • Social Security Administration (SSA) • Selective Service • Department of Homeland Security (DHS) • Veterans Administration (VA) • National Student Loan Data System (NSLDS)

17. IRS EDE Destinations (Schools, States and Servicers) FAFSA (IDC) FAFSA on the Web Products SAIG Internet FSAIC Social Security Admin. CPS COD Selective Service Veterans Admin. NSLDS Dept. of Homeland Security

18. Process Data – Matches • Social Security Administration (SSA) • Verify SSN for student, parent1/father, and parent2/mother • Verify citizenship status for student • Makes use of prior cycle data from Multi-Year Applicant Database (MYAD) • Selective Service System (SSS) • Check registration status for applicants born between 1960 and 1998 who answer Are You Male/Female as Male or blank • Register applicants who request registration • Makes use of prior cycle data from Multi-Year Applicant Database (MYAD)

19. Process Data – Matches • Dept. of Homeland Security (DHS) • Verify citizenship status for eligible non-citizens (when student reports an ARN) • If status is not verified on initial match, DHS automatically performs Secondary Confirmation and CPS waits three days for results before processing • System generate a transaction if results are received after three days • Veterans Administration (VA) • Verify veteran status for applicants who answer Yes to the Are You a Veteran question • No match performed for Active Duty Military

20. Process Data – Matches • National Student Loan Data System (NSLDS) • Prescreening for all applications and corrections: • Verify default and overpayment status for all applicants • Receive Financial Aid History information for ISIR • Post-screening: System generates a transaction if status changes at NSLDS

21. Process - Matches • By Pass process to stop the Matches • Suspension of Match • CPS can stop sending records to a Match if needed while still processing the record • On resumption of the match these records can be system generated to go through the match • Match Holding • Outside agency cannot return records sent to them for matching in the time needed for the compute process • These records can be withheld from the compute process, but all other records can continue • Once the data is returned from the agency the held records will be computed

22. Process Data – Matches • There are 3 internal matches conducted • Drug Abuse Hold • SSA Death Master File • Department of Defense (DOD) match • Data from these agencies are held within CPS

23. Process Data – Matches • Department of Justice (DOJ) Drug Abuse Enforcement hold file • File is provided by DOJ every two weeks • Contains persons who are denied federal student aid due to drug abuse convictions • System generates a transaction if status changes either put on hold or released • SSA Death Master File (DMF) • File is provided by SSA weekly • Contains all persons for which SSA has death records • System generates a transaction for already processed records

24. Process Data – Matches • Department of Defense (DOD) Match file • File is provided by DOD monthly • Contains persons whose parent or qualifying guardian was a member of the Armed Forces and died as a result of service in Iraq or Afghanistan after 9/11/01 • Set DOD Match Flag for matching applicants to indicate possible grant eligibility • System generate a transaction for already processed records

25. Process Data - Edits • Compute Edits • Substantive edits on application data to determine if an EFC can be calculated • Edit for basic eligibility requirements (name, date of birth, citizenship, drug offense conviction, dependency status) • Edit for validity and consistency of financial data • Records are processed through groups of edits • Results from one group of edits are used in the next group

26. Process Data - Edits • Groups of Compute Edits • Initial Common Edits – performed on all records (1000 and 3000 series) • Model/Dependency determination • Simplified Needs Test/Auto Zero EFC • Accuracy, completeness, and consistency of identity and demographic information

27. Process Data - Edits • Groups of Compute Edits • Dependent Student Edits – performed on dependent records (4000 and 5000 series) • Accuracy, completeness, and consistency of parents’ and dependent student’s information • Marital status, family size • Tax filing status • Income and asset information

28. Process Data - Edits • Groups of Compute Edits • Independent Student Edits – performed on independent records (6000 series) • Accuracy, completeness, and consistency of independent student’s information • Marital status, family size • Tax filing status • Income and asset information

29. Process Data - Edits • Groups of Compute Edits • Final Common Edits – performed on all records (7000 series) • College choices • Processing results • External match results • Set internal flags (SAR C flag, Pell Grant flag, Pushed ISIR flag, change flags)

30. Process Data - Edits • Types of Compute Edits • Assumption Edits - assume a logical response for missing or incorrect data based on comparison with other responses provided by the applicant • Assumed values are used in calculating the EFC • Data is identified as assumed for both the student and the FAA • Reject Edits – missing or significant conflict in key information, and a logical assumption can not be made • An EFC is not calculated • Fields are highlighted and SAR comments are provided • A correction is required

31. Process Data - Edits • Warning Edits - data is questionable or contradicting but not severe enough to be rejected • Includes cross year edits • EFC is calculated • Fields are highlighted and SAR comments are provided

32. Calculate EFC • EFC Calculation • Performed for non-rejected and signature only reject records • Six possible formulas used; type determined based on: • Dependency status • Family size/marital status for independents • Simplified needs test

33. Calculate EFC • EFC Calculation • Calculate primary and secondary EFC if SNT is met and asset information is provided • Calculate eleven alternate EFCs for programs of less than and greater than nine months • If Auto Zero EFC is met, set EFC to zero but calculate Total Income

34. Final Processing - Verification • Verification Selection • Records with EFCs subjected to verification selection, including signature only rejects • Target is to select 30% of applicants • 2.5% selected randomly • 2.5% held immune from selection to be used as a control group

35. Final Processing - Verification • Verification Selection • Currently use mutually exclusive, collectively exhaustive targeted criteria • Priority used to determine if record will be selected • Only Pell eligible selected except for random selection and fraud identity

36. Final Processing - Edits • Final Edits • Comments set for verification selection (8000 series) • Comments on each record reviewed for conflicts and redundancy; switches and suppressions performed (9000 series)

37. Disseminate Data • Database is updated with results of processing from beginning to end • Results made available to the parties below • Applicant/parents • Schools • State and Third Party Agencies • FSAIC/FSA • Other FSA/Government systems

38. Disseminate Data • Applicant/Parents • Student Aid Report (SAR) sent to student via e-mail or paper • SAR Acknowledgement sent to electronic applicants who do not have e-mail address • E-mail sent to parents of dependent students

39. Disseminate Data • Schools • ISIRs sent to institutions listed on application • Automatically sent (pushed) if: • Selected for verification • EFC changes • SAR C flag status changes • Reject status changes • Transaction is system generated

40. Disseminate Data • Schools • If not pushed, school has option of receiving ISIRs automatically daily or requesting when desired • ISIR Datamart is populated with all transactions which allows FAAs to request specific ISIR if their school code is present

41. Disseminate Data • State and Third Party Agencies • ISIRs made available to states where applicant is a resident or is attending school • Also available to third parties acting as servicers for institutions • Option of receiving ISIRs automatically daily or requesting when desired • ISIR Datamart is populated with all transactions which allows agencies to request specific ISIR data as needed

42. Disseminate Data • FSAIC/FSA • Data made available to Customer Service representatives and FSA staff through Inquiry subsystem • Includes application and processed data as well as images of forms submitted on paper

43. Disseminate Data • FSAIC/FSA • Allows CSRs to answer questions, provide processing results, and make limited corrections for applicants and other authorized parties • Allows FSA staff to review data, make corrections, and perform special processing requests

44. Disseminate Data • FSAIC/FSA • Management Information System (MIS) collects and extracts data for reports and displays them using a reporting tool (OLAP) • Provides FSA with near real-time and YTD data on processing status and results

45. Disseminate Data • Other FSA Systems • Interface with Common Origination and Disbursement (COD)/NSLDS to exchange data • Demographic Data Exchange File sent daily • Includes all transactions processed • Contains all application and processing data • Used by COD/ NSLDS to update information on its database • Recipient File received from COD as needed • Used for Verification Selection analysis, End Of Year Report, and statistical analysis

46. Perform Analysis • Sample Database • Statistically reliable sample of applicants is drawn for analytical purposes • Sample is drawn on a continuous basis with every compute as well as on a stand alone basis four times a processing cycle • Data can be merged with recipient data from COD • Used for many routine as well as ad hoc analyses

47. Perform Analysis • Annual Requirements Analysis • Statistical analysis performed to evaluate effectiveness of warning, assumption, and reject edits • Statistical analysis to derive most effective verification selection criteria

48. Perform Analysis • IRS Statistical Study • Statistical analysis performed each year to evaluate accuracy of applicant reporting and determine potential Pell misallocated awards • Sample of FAFSA applicants sent to IRS for matching against IRS database • Compares FAFSA data to IRS data to determine discrepancies and effect on award

49. Perform Analysis • Pell Grant End of Year Report • Generates end of cycle data tables for congressional report as well as FSA research • Produces sample file of applicant and recipient data for use in program modeling and budget projections

50. 2016-2017 Changes • High Level Changes • Schools will only see their school code on the student’s processed record on both the ISIR and in FAA Access. State Agencies will continue to see all school codes • Verification • Will not include graduate students in the fraud criteria • Students will now be switched between verification criteria on corrections if the update data puts them in a different criteria • Will system generate a new record type ‘5L’ when someone added to the suspect identity file has already been processed