Office of Postsecondary Education - U.S. Department of Education

WReier-Aviles on DSKGBLS3C1PROD with RULES266906 Federal Register / Vol. 75, No. 209 / Friday, October 29, 2010 / Rules and Regulationscommenters requested that there be nochange in this area or that FAAs bepermitted to make dependency statuschanges under certain circumstances,such as during verification, or at theirdiscretion. For example, one commentersuggested requiring the reporting of achange to dependency status until thefirst disbursement of title IV, HEA aidhas been made and that if thedependency status update results in achange in the applicant’s EFC, the lowervalue should be used. A couple ofcommenters observed that students whomarried late in the award year wouldbecome independent and need to havetheir aid repackaged for the award year.One commenter opposed all mid-yeardependency status changes because theyundermine the ‘‘snapshot’’ approach tothe application process and create alarge administrative burden. Anothercommenter noted the potential forstudents who divorced and becamedependent again to lose eligibility forthe aid they received because theirparents would refuse to provideinformation for the application. Stillanother remarked that it is hard forinstitutions to track dependency statusduring the award year because accuratetracking requires that students notify theinstitution of changes. One commenter,who stated that he appreciated thatwhen an update is due to a change inthe student’s marital status, institutionswould only be required to make theupdate if notified by the student, alsonoted that this approach can penalizethe student who is honest and reportsthe marital status change. Thiscommenter argued that such a change independency status should be reflectedin the application for the following year,as occurs under the current regulations.Another commenter suggested thatalthough the Department affirmed that itis not the institution’s responsibility toinitiate updating, this view ignores theburden imposed on institutions toresolve conflicts in information theyreceive from different sources. Thiscommenter requested relief forinstitutions so that they would onlyneed to make a dependency statuschange in ISIR information if thestudent or family was the source of theinformation supporting the dependencychange. Another commenter askedwhether institutions are required tokeep track of potential dependencystatus changes that are indicated byother campus offices when the studentdoes not report the change. Onecommenter asked that there be a cut-offdate after which an institution would nolonger be required to make dependencystatus changes. Another commenteragreed with the Department’s logic fornot having a cut-off date, and asked thatinstitutions be permitted to set theirown date based on their academiccalendar.One commenter who supported midyeardependency status changesrequested that the Department allowupdates to household size and numberin college when there is a change inmarital status. Another commenterasked for early implementation of§ 668.55(c) because students areadversely affected by the currentregulations.Discussion: We agree that mid-yearverification updates to household sizeand number in college and dependencystatus updates would be burdensome toinstitutions if they resulted from achange in a student’s marital status.Accordingly, we have revised§ 668.55(a) to provide that if anapplicant’s dependency status changesat any time during the award year, theapplicant must update his or her FAFSAinformation, except when thedependency status change is due to achange in the applicant’s marital status.Also, to reduce burden to institutionswith regard to updating information, in§ 668.55(b)(2), we specify that anapplicant is not required to providedocumentation of household size,number in college, or the financial dataof an applicant’s spouse during asubsequent verification of these dataitems if the information has notchanged. However, new paragraph (c) ofthis section would allow the institution,at its discretion, to require an applicantto update the applicant’s marital status,even if it results in a change in theapplicant’s dependency status, if theinstitution determines the update isnecessary to address an inequity or toreflect more accurately the applicant’sability to pay.In response to the comments aboutestablishing cut-off dates for makingupdates, we note that under the revisedprovisions, an institution that decides tohave marital status updated pursuant to§ 668.55(c) may also incorporate in itspolicy a cut-off date after which it willnot consider any updates to a student’smarital status.Changes: We have revised § 668.55(a)to provide that if any of the factors thatimpact an applicant’s dependencystatus changes at any time during theaward year, the applicant must updatehis or her FAFSA information, except ifthe item is the applicant’s marital status.Paragraph (b) of § 668.55 has beenrevised to provide that an applicant whois selected for verification of his or herhousehold size or number in collegemust update those items to be correct asVerDate Mar2010 14:10 Oct 28, 2010 Jkt 223001 PO 00000 Frm 00076 Fmt 4701 Sfmt 4700 E:\FR\FM\29OCR2.SGM 29OCR2of the date of verification, except whenthe update is due to a change in theapplicant’s marital status. As revised,§ 668.55(b)(2) also provides that anapplicant is not required to providedocumentation of household size ornumber in college during a subsequentverification for the same award year ofeither item if the information has notchanged. Finally, paragraph (c) of§ 668.55 provides that an institutionmay, at its discretion, update anapplicant’s marital status, even if theupdate will result in a change in theapplicant’s dependency status if theinstitution determines the update isnecessary to address an inequity or toreflect more accurately the applicant’sability to pay.Comment: One commenter askedwhether, when a student’s marital statusis updated, the student must have his orher spouse’s income reported to the CPSfor recalculation of the student’s EFC.Another commenter requested that theDepartment clarify how to treat incomein cases when the student marries ordivorces, regardless of whetherverification was performed. A thirdcommenter wondered why thehousehold size and number in collegeitems are updated while the income andassets items are not updated for newfamily members (e.g., the stepparent ofa dependent student or the spouse of anindependent student).Discussion: As we stated earlier inthis preamble, we have revised § 668.55to provide that there is no updating ofan applicant’s dependency status basedon a change in marital status except atthe discretion of an FAA. In such caseswhere an FAA chooses to update astudent’s dependency status as a resultof a change in the student’s maritalstatus regardless of whether the studentis being verified, all of the informationmust be consistent with the change tothe marital status. This includes income(either adding the spouse’s income ordeducting a former spouse’s income) aswell as household size and number incollege. Note, however, that the revisedregulations do not allow for updatingwhen an otherwise independent studentmarries or divorces, i.e., there is nochange in dependency status and thestudent is not selected for verification.During verification, household sizeand number in college are updated, butthe income and assets of new familymembers are not typically includableitems on the FAFSA; for example, theincome or assets of a grandparent whocomes to live in the dependent student’sfamily would not be includable.Moreover, section 475(f)(3) of the HEAexcludes a stepparent’s income andassets from being reported on the