Since You Asked: FAME Frequently Asked Questions & Answers
Q1: For a clock hour program that has a 900 clock hour academic year definition which equals 1 year for Subsidized Loan Eligibility Used (SLEU) purposes, if you have a student attending 30 hours per week and a student attending 20 hours per week, should you report them both as attending fulltime for the enrollment status?
The reason for the question is because if you report the 20 hours per week student as halftime, won’t that calculate to be 0.5 year for the SLEU? For both of these students, the loan period and the academic year will be reported as the start date to when they will complete 900 hours and both should calculate to be 1 year for SLEU.
A1: For the purposes of prorating subsidized usage periods under the 150% Subsidized Loan limit, ED will not acknowledge enrollment in a clock-hour program that is less than full time. Therefore, for students in such programs, schools must always report a full-time enrollment status to COD. ED has also provided guidance that if a school has a program where students can take a half-time “track” or most take half the expected clock hours per week, it is likely that each “track” is actually a separate program and should be set up accordingly in COD and NSLDS. Also, schools should appropriately publish the length of the separate programs.
Q2: Can we update our Classification of Instructional Program (CIP) codes on our E-App now, or do we have to wait and make the updates at the start of a new award year?
A2: CIP codes can be submitted via the E-App at any time, it doesn’t need to be at the beginning of an award year. Once the codes are changed on the E-App, any future reporting of CIP codes should use the updated codes. When the CIP codes are updated, the Gainful Employment (GE) disclosures should also be updated so that the new codes are used for GE purposes as well.
Q3: Is there any restriction on how old the ATB test is if a student took one prior to July 1, 2012, based on the DCL GEN-12-09 on grandfathering in students?
A3: No, it could have been years ago and the grandfather clause still applies.
Q4: The FAFSA says for question 55 that a student can answer YES if they are in legal guardianship or were in legal guardianship immediately before they reached the age of being an adult in their state. If a student is now 19 and was in legal guardianship until age 18, but only has legal guardianship documents from age 9 when he was placed in legal guardianship, is that sufficient?
A4: It doesn’t matter what age the student was when placed in a legal guardianship. What matters is whether the legal guardianship remained in effect until the student reached the age of adulthood in that state. It is our understanding that, in most cases, a legal guardianship automatically ends once the person becomes an adult.
Q5: If a school does not have conflicting information to raise a question about a student’s legal guardianship status, are they required to obtain proof of legal guardianship pertaining to the student?
A5: No, there’s no requirement to verify legal guardianship, provided the school doesn’t have conflicting information.
Q6: In a situation where a student is found to be in default after the school has already disbursed all aid, what is the school’s responsibility to “help make sure the student arranges to repay the aid for which he/she wasn’t eligible?” (2014-2015 Federal Student Aid Handbook, page 1-53)
A6: Our guidance from ED indicates that the school has no liability in this situation. However, you would provide the same information you would to any student who was in default, explaining the ways in which the default could be resolved (repayment in full, satisfactory repayment arrangement, etc.).
Q7: Our school has a student that will complete his 2-year program in the middle of the second term of the second year (after 2 courses in that term that are each a month in length in the term). Since the student is actually enrolled in the second term of the academic year, is proration required?
A7: Since in the case described the student is actually enrolled in the second term of the two-term academic year (although finishing before the end of the second full term), proration does not apply. That is, proration does not apply because the student is enrolled in both terms that normally comprise your academic year, e.g., fall and spring terms.
Q8: If a student is married, but separated, and they file a single return, why does it have to be corrected when the standard exemption is the same $6,100.00? The 2014-15 FAFSA now asks what return the tax filer submitted.
A8: It may not be the dollar amount of the standard exemption that is creating an issue. Based upon the limited information shared, a guess is that the different tax filing status is creating a suggestion of the possibility that there may be a dependency status conflict.
As indicated in ED’s 2014-2015 Summary of Changes for the Application Processing System Guide released on IFAP on December 20, 2013, ED added the new questions and related comments applicable to tax filing statuses for 2014-2015. The tax filing status questions were added to give schools an alert to “potential” inconsistencies in the tax filing status and the marital status reported. (For example, someone may have reported on their FAFSA that they are married, but the tax return filed shows single status.) While there are situations where the apparent discrepancy is legitimate and valid (e.g., a student was single as of December 31 of the tax year, but got married on or after January 1 of the new year but before filing the FAFSA), ED apparently believed there were enough circumstances of invalid statuses that it implemented these new codes and comments.
The latest guidance we have from ED is in the Electronic Announcement on IFAP dated May 15, 2014. While ED does encourage schools to review an applicant’s record when any of these new comment codes are included on the ISIR to determine if the reported statuses are correct and that the correct income and other information were reported on the FAFSA, it is not “required” to do so. The tax filing status, in and of itself, is not considered to be “conflicting information” as described in the regulations in 34 CFR 668.16(f). (Naturally, if there are other issues that would constitute conflicting information, those issues would have to be resolved.)
Having said the above, we do encourage schools to ensure the accuracy of the statuses if one of the comments are on the student’s ISIR to ensure that correct income information, household size, etc., are correctly entered. While it is true that the tax filing status in and of itself may not affect the EFC, it can be an indicator of other potential issues, such as a student having incorrectly reported income or household size, etc.
Schools should indicate in their written policies and procedures how they are going to handle such situations when one of the new comment codes are present on a student’s ISIR. (ED even indicates that schools may decide to review such situations on a case by case basis.)
Q9: Was the interest subsidy restored during the 6-month grace period on Subsidized Direct Loans for undergraduate students?
A9: Effective July 1, 2014, all new undergraduate Subsidized Direct Loans first disbursed on or after July 1, 2014, will again receive interest subsidy during the 6-month grace period. The provision of interest subsidy during the grace period had been temporarily eliminated for all new loans first disbursed during the period of July 1, 2012 through June 30, 2014, as a result of the federal fiscal year 2012 (FY 2012) budget bill. Since Congress did not act to extend or make permanent the elimination of the interest subsidy, all new loans first disbursed after July 1, 2014, became eligible for the interest subsidy during the grace period. No action was required on a school’s part to make this happen. However, all schools should ensure that their consumer information and loan counseling materials are accurate in regard to the current availability of the interest subsidy during the grace period.
Q10: In calculating a Return to Title IV funds (R2T4), we can use any loan funds that were disbursed after a student ceased attendance but prior to the institution’s date of determination (DOD) as aid that “could have been disbursed” (CHBD). We can also include loan funds as CHBD that were not disbursed but for which the student was eligible based on the loan having been originated prior to the student withdrawing (or otherwise becoming ineligible) and an appropriately executed and signed master promissory note being received prior to the R2T4 calculation. What about loans disbursed after the DOD? Would it be the same as the scenario just described except it was already disbursed? If so, what is the difference?
A10: A disbursement after the DOD would have already been considered as CHBD funds in the R2T4 calculation since it did not meet the criteria for a “disbursed” loan in the calculation. If it is coming in as a disbursement after the DOD, it would have had to have also met the requirements for a late disbursement and/or post-withdrawal disbursement (PWD) in order for the disbursement to have been considered made correctly.
