FAFSA® and Application Processing System Update Session #GS2 FAFSA® and Application Processing System Update Gregory Fortelny and Misty Parkinson | Dec. 2014 U.S. Department of Education 2014 FSA Training Conference for Financial Aid Professionals

Agenda New FAFSA resources Scheduled enhancements for January 1, 2015 Planned changes for April, 2015 Trends in applicant behavior Important dates Contact information

New FAFSA resources

The FAFSA Process DRAFT

Who’s My Parent? DRAFT

The IRS Data Retrieval Tool

Upcoming Electronic Announcement Issue: If the DHS Match Flag shows a Y or the DHS Secondary Code = Y, a student is eligible for aid and a G-845 is not needed. A G-845 is necessary only if the DHS Match Flag shows an N AND the DHS Secondary Code = N, X or C (no match with DHS). Schools are unnecessarily sending a G-845. Solution: This guidance will be clarified in an upcoming Electronic Announcement.

Scheduled enhancements for January 1, 2015

Foster Care Youth Issue: Legislation now requires the FAFSA to ask applicants if they’ve ever been in foster care. Solution: A new question will display in FAFSA on the Web, and students who answer “Yes” will receive messaging about potential resources available to them.

Foster Care Youth (Cont’d)

Foster Care Youth (Cont’d)

Foster Care Youth (Cont’d)

Freely Associated States Issue: Students from the Freely Associated States often use a new pseudo-SSN each year. This became problematic with the implementation of Pell LEU. Solution: FSA will provide guidance to returning students who are from the Freely Associated States to use the pseudo-SSN already assigned to them when they complete the FAFSA in subsequent years.

Freely Associated States (Cont’d)

Freely Associated States (Cont’d)

Freely Associated States (Cont’d)

Text Updates Issue: Members of the financial aid community have identified specific FAFSA questions that are particularly troublesome for applicants. Solution: Question labels and help text will be modified to provide clearer guidance.

Date of Legal Residence

Neither Citizen Nor Eligible Noncitizen

High School Diploma

Parents’ Number in College Question 74: How many people in your parents’ household (from question 73) will be college students between July 1, 2015 and June 30, 2016?

Legal Parent

Legal Parent (Cont’d)

Amended Return If you, the parent(s), filed a Form 1040X Amended U.S. Individual Income Tax Return for 2014, select Yes; otherwise, select No. The Form 1040X is used to correct your original filed tax return. You are not eligible to use the IRS Data Retrieval Tool if you amended your 2014 federal tax return.

Availability of IRS DRT

Separated For FAFSA purposes, a married couple is separated if the couple is considered legally separated by a state, or if the couple is legally married but has chosen to live separate lives, including living in separate households, as though they were not married. If you and your spouse are separated but living together, select “I am married / remarried,” not “I am separated.”   NOTE: When two married persons live as a married couple but are separated by physical distance (or have separate households), they are considered married for FAFSA purposes.

Gender

School Selection

School Selection (Cont’d)

School Selection (Cont’d)

Planned changes for April, 2015

FSA ID Issue: The FSA ID (username and password) will replace PIN for students, parents and borrowers accessing FSA systems starting on April 25, 2015. Solution: FAFSA on the Web will be updated to require users to authenticate with the FSA ID rather than the PIN.

Trends in Applicant Behavior

Applications and Corrections Applications peaked in 2011-12 with 21.9 million applications submitted, a 36% increase since 2006-07. Applications have since slightly declined Through October, the 2014-15 cycle had about 18.3 million applications, down 2.6% compared to the same time period last year FOTW has increased its share as an application (and correction) data source, accounting for 99% of all applications in 2013-14

Application Completion Times Overall completion times have declined every year since 2010-11 Even accounting for three primary factors influencing completion times—dependency status, renewal status, and EZ form eligibility—improvements in the online application have decreased completion times

Postsecondary Schools Listed Nearly 80% of applicants list one postsecondary school on their FAFSA Among first-time-filing freshmen, 38% report more than one school

IRS Data Retrieval Tool Usage Early in the cycle, many independents have yet to file their taxes by the time they submit their initial application—1.2 million in Q1 of 2013—making them ineligible to use the IRS DRT Among those who had filed their taxes by the time they submitted their initial transaction, about 3.9 million transferred data from the IRS. By their final transaction 4.9 million had transferred data

IRS Data Retrieval Tool Usage Compared to independents, dependent applicants are more likely to apply early in the cycle. Moreover, parents of these early Q1 applicants are more likely to have yet to file (2.5 million) than have actually filed (2.0 million) their taxes Among parents who have already filed their taxes by the initial application, 1.7 million transferred data using the IRS DRT

IRS Data Retrieval Tool Eligibility Among all applicants—regardless of whether they file taxes—the top reasons for DRT ineligibility for both parents and students are having not completed a tax return, DRT availability, and having an amended tax return

Parent Marital Status Among dependent applications, just under 50k (or 0.6%) reported having a parental marital status of “Unmarried and both parents living together” in the 2014-15 application cycle (through ten months) Among those that had applied in 2013-14 as well, about 43% saw no change in their EFC, 39% saw an increase, and 18% saw a decrease

Data Table and Figure Notes FAFSA Table 1: Data retrieved from Central Processing System (CPS). Includes rejected transactions and excludes system-generated transactions. Due to rounding, values may not add up to 100%. FAFSA Table 2: Data retrieved from Central Processing System (CPS). Data based on initial application and includes rejected applications. Only includes applications processed through FAFSA on the Web (FOTW). The current (2014-15) cycle figures include applications processed through October 31, 2014; all remaining cycle figures include all processed applications. FAFSA Table 3: Data retrieved from Central Processing System (CPS). Data based on initial application and includes rejected applications. Only includes applications processed through FAFSA on the Web (FOTW). The current (2014-15) cycle figures include applications processed through October 31, 2014; all remaining cycle figures include all processed applications. FAFSA Table 4: Data retrieved from Central Processing System (CPS). Data based on initial application and includes rejected applications. Due to rounding, values may not add up to 100%. FAFSA Table 5: Data retrieved from Central Processing System (CPS). Where appropriate, data based on the initial application or the final transaction, both of which include rejections. Only includes independent applications where the student reported “Already Completed” for their tax filing status. The values for initial and last transaction are not subsets of each other as—among other factors—applicants can change dependency status or tax filing status by the final transaction. FAFSA Table 6: Data retrieved from Central Processing System (CPS). Where appropriate, data based on the initial application or the final transaction, both of which include rejections. Only includes dependent applications where the parent reported “Already Completed” for their tax filing status. The values for initial and last transaction are not subsets of each other as—among other factors—applicants can change dependency status or parents can change tax filing status by the final transaction.

Data Table and Figure Notes FAFSA Table 7: Data retrieved from Central Processing System (CPS). Data based on the last transaction on file through October 31, 2014, and includes rejected applications. Data includes all dependent applications. FAFSA Table 8: Data retrieved from Central Processing System (CPS). Data based on the last transaction on file through October 31, 2014, and includes rejected applications. Data includes all independent applications. FAFSA Table 9: Data retrieved from Central Processing System (CPS). Data based on the last transaction on file through October 31, 2014, and includes rejected applications. Data includes all dependent applications. FAFSA Figure 1: Data retrieved from Central Processing System (CPS). Includes rejected transactions and excludes system-generated transactions. The current (2014-15) cycle figures include applications processed through October 31, 2014; all remaining cycle figures include all processed applications. FAFSA Figure 2: Data retrieved from Central Processing System (CPS). Data based on initial application and includes rejected applications. Only includes applicants whose were considered first-time-filers in 2013-14 and self-reported being college freshmen. Due to rounding, may not add up to 100%. FAFSA Figure 3: Data retrieved from Central Processing System (CPS). Data based on initial application and includes rejected applications. Only includes independent applications. FAFSA Figure 4: Data retrieved from Central Processing System (CPS). Data based on initial application and includes rejected applications. Only includes dependent applications. FAFSA Figure 5: Data retrieved from Central Processing System (CPS). Data based on a comparison between an applicant’s last transaction for 2013-14 and last transaction (as of October 31, 2014) for 2014-15. EFC is generally not calculated on rejected transactions and are, therefore, excluded from analysis. Data includes applicants that were dependent in 2013-14, dependent in 2014-15, and reported a marital status of “Unmarried and both parents living together” in 2014-15.

Important Dates

Important Dates September 2014 October 2014 November 2014 2015-16 EFC Formula Guide on the IFAP website, pending final 2014 IRS tax legislation October 2014 2015-16 SAR Comment Codes and Text 2015-16 CPS Test System User Guide 2015-16 Electronic Data Exchange (EDE) Technical Reference - Final 2015-16 ISIR Guide on IFAP November 2014 2015-16 Summary of Changes for the Application Processing System Guide December 2014 FAFSA on the Web Preview Presentation The CPS Test System is made available CPS Web Applications Demo System, December 28, 2014

Important Dates (Cont’d) January 2015 2015-16 Application Processing System Specifications for Software Developers - Final Application launch January 1, 2015 February 2015 IRS Data Retrieval Tool February 1, 2015

Contact Information Gregory Fortelny Acting Director, Customer Analytics Federal Student Aid Phone: 202-377-4681 E-mail: Gregory.Fortelny@ed.gov Misty Parkinson Director, Applicant Products and Customer Service Division Phone: 202-377-3749 E-mail: Misty.Parkinson@ed.gov