Washington Update

FAFSA Updates 

ED Reprocessing Individual Student Institutional Records (ISIRs) – The U.S. Department of Education (ED) will continue reprocessing known mistakes with ISIRs it has discovered. Institutions may use the ISIRs they currently have to make financial aid awards. If the new ISIR results in more student aid eligibility, institutions will be required to use that data. The reprocessing will occur within two primary categories: 

• FAFSA Processing System – ED next week will reprocess ISIRs due to mistakes it made impacting 10 percent of FAFSA submissions, including incorrect calculations made with the Student Aid Index for dependent students with assets. Much of this reprocessing will result in lower student aid eligibility. 
• IRS Direct Data Exchange – By May 1, ED will reprocess ISIRs due to IRS mistakes  impacting another 20 percent of FAFSA submissions. These mistakes include tax credits and amended returns. Most will result in less financial aid eligibility. 
• New Data to Help Institutions Make Awards to Unaffected Students – Based on feedback from the field, ED will directly provide institutions list of students unaffected by IRS and FAFSA processing errors, so schools can begin to immediately package aid for such students.  

Updates On Student FAFSA Corrections – According to the U.S. Department of Education, students will be able to log back in to make corrections to their FAFSA record by next week. As with most years, any student needing to make corrections may do so by logging into their account. Students should be able to review their updated FAFSA Submission Summary within one to three days of submitting a correction. ED states that 95 percent of student corrections this year involve six known issues the agency is prioritizing in its website testing. 

APLU Joins Higher Education Community Letter Describing FAFSA Challenges 
In late March, APLU joined a higher education community letter to ED describing challenges institutions face when processing ISIRs. The letter detailed the impact of delays in releasing the FAFSA miscalculations in the Student Aid Index, and technical issues setting up Student Aid Internet Gateway (SAIG) mailboxes.  

Updates to Issues Impacting Contributors without SSNs 
ED announced a resolution to an issue for eligible citizen or resident FAFSA applicants with a noncitizen parent or spouse who cannot contribute their FAFSA income data because they do not have a Social Security Number. Updated guidance can now be shared with students and their families. 

Department of Education Releases Guidance on FAFSA Data Use and Sharing  
On April 8, ED released guidance outlining how state higher education agencies can share FAFSA completion data with scholarship organizations or programs like TRIO and GEAR UP. The guidance also clarifies how institutions and state agencies may use FAFSA data to reach out to students who may be eligible for means-tested federal benefits. 

Previously, when students imported their data from IRS using the FAFSA data retrieval tool, federal tax information was considered FAFSA data and could be used by institutions to determine eligibility and connect students with other aid and provide more personalized student services. Following the implementation of the FUTURE Act, ED is now receiving federal tax information directly from IRS, which may bring stricter IRS confidentiality requirements.  

APLU understands the tremendous challenges the difficult FAFSA rollout has created for students, their families, and institutions. The association is in regular contact with ED and continues to push for an expedient resolution to challenges. In our communications, we are underscoring the concerns we are hearing from member institutions. 

U.S. Department of Education Delays Gainful Employment Reporting Deadlines to October 1  
In 2023, the U.S. Department of Education announced final gainful employment and financial value transparency regulations. The regulations are designed to increase transparency around financial costs and earnings outcomes while applying accountability to applicable programs that fail certain thresholds. On March 29, ED published an electronic announcement delaying the gainful employment and financial value transparency reporting deadlines from July 31 to October 1. 

Per ED, the shifted deadline is intended to provide institutions with the necessary time to compile their data while maintaining the agency’s planned release of the first metrics in early 2025. ED published a Dear Colleague Letter, which provides an overview of the reporting requirements. 

U.S. Department of Education Announces New Student Loan Discharge Plans 
On April 8, ED announced a new set of student loan discharge plans that would bring the total number of borrowers eligible for student loan forgiveness to over 30 million. The plans would be implemented through new federal regulations, with a formal notice and comment period this year. The new plans would automatically discharge debt for borrowers eligible for relief through the Saving on a Valuable Education (SAVE) plan, closed school loan discharges, Public Service Loan Forgiveness (PSLF), or other existing forgiveness opportunities, even if they have not successfully applied for that assistance. 

Additionally, the new proposal seeks to eliminate undergraduate debt for borrowers who have been in repayment for at least 20 years and graduate school debt for borrowers who first entered repayment 25 years ago; eliminate debt for borrowers who enrolled in low-financial-value schools; and forgive debt for those with certain types of financial hardship. The plan would forgive up to $20,000 in debt for borrowers who owe more than they borrowed. 

The announcement contains state-by-state data on impacted borrower counts and outstanding balances for borrowers approved for discharge across Public Service Loan Forgiveness, Income-Drive Repayment including the new Saving on a Valuable Education repayment plan, and Total and Permanent Disability.