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

Federal Register / Vol. 75, No. 209 / Friday, October 29, 2010 / Rules and Regulations66911WReier-Aviles on DSKGBLS3C1PROD with RULES2Comment: One commenter indicatedthat there is a problem with the crossreferencesin proposed § 668.58. Thesame commenter also expressed concernthat this provision does not make clearhow interim disbursements for the FWSProgram are treated if the student afterworking is determined to have anoverpayment.Discussion: We agree with thecommenter that there are problems withthe cross-references for interimdisbursements in proposed § 668.58.Specifically, we believe that in§ 668.58(a)(1) and (a)(3)(i), we need toclarify that corrections to the student’sFAFSA information must be made inaccordance with § 668.59(a). Inaddition, in proposed § 668.58(b) wehad an erroneous cross-reference for theinterim disbursements made under theFWS Program. Proposed § 668.58(b) alsodid not cross-reference each type ofinterim disbursement that is allowedunder certain conditions, either beforeverification is completed or afterverification is completed but before theinstitution has received the valid SARor valid ISIR reflecting the corrections.For clarity, we believe it is appropriateto revise § 668.58(b) so that it addresseseach type of interim disbursement.Further, we believe that specific crossreferencesto § 668.61 need to be addedto § 668.58(b) to clarify how institutionsmust handle any overpayments thatoccur because of an interimdisbursement such as under the FWSProgram.Changes: We have revised§ 668.58(a)(1) and (a)(3)(i) by clarifyingthat corrections to a student’s FAFSAinformation must be made inaccordance with § 668.59(a). Inaddition, we have revised § 668.58(b) tocorrectly and completely cross-referenceeach type of interim disbursement thatis allowed. Further, we have revised§ 668.58(b) to explain, with morespecificity, how institutions musthandle the recovery of each type ofoverpayment due to an interimdisbursement, including those made forthe FWS Program. We also addedspecific cross-references to § 668.61 in§ 668.58(b) to provide clarity toinstitutions on handling the recovery ofany overpayments that may occurbecause of an interim disbursement.Consequences of a Change in anApplicant’s FAFSA Information(§ 668.59)Comment: A number of commentersagreed with the proposal to remove the$400 tolerance reflected in current§ 668.59(a) and, instead, to require allchanges to an applicant’s FAFSAinformation be reported to theDepartment for reprocessing to ensure astudent’s award is based on accurateinformation.Several other commenters objected tothe proposal to remove the dollartolerance because they believed itwould increase administrative burden,particularly for larger institutions, andwould delay payments to students. Onecommenter noted that the currenttolerance allows FAAs to use their ownjudgment to determine when it wasnecessary to reprocess corrections thathave minimal impact on studenteligibility.One commenter noted that removingthe $400 tolerance will not be a problemfor institutions but, like many othercommenters, opposed requiring allchanges to an applicant’s FAFSAinformation to be submitted to theDepartment for reprocessing. Thecommenter expressed concern aboutthis requirement, especially when thestudent’s eligibility either would not beaffected or where there were minorerrors, i.e., an AGI was off by $1. Onecommenter recommended that theDepartment consider providinginstitutions with some administrativerelief in this area, given that institutionswill need to implement several otherchanges as a result of the issuance ofthese verification regulations. Manycommenters recommended that theDepartment retain the current $400tolerance or allow for a reasonabletolerance of a modest sum to allow forminor errors made by applicants andtheir families.Discussion: We appreciate theconcerns raised by commenters andacknowledge the burden associated withhaving to submit all changes to anapplicant’s FAFSA information to theDepartment for reprocessing. While ourgoal is to obtain the most accurate dataavailable to help in our efforts toidentify error-prone applications, weagree that the regulations shouldprovide a means for dealing with minorerrors in financial information reportedon an applicant’s FAFSA informationwithout requiring that these minorchanges be submitted to the Departmentfor reprocessing. While we do not agreethat it is appropriate to retain the $400tolerance from current § 668.59(a), weare revising § 668.59 to address minorerrors in financial information so thatinstitutions need not submit changesresulting from these types of errors tothe Department for reprocessing. It isimportant to note, however, thatinstitutions will still be required tosubmit all errors in nonfinancialinformation to the Department forreprocessing.VerDate Mar2010 14:10 Oct 28, 2010 Jkt 223001 PO 00000 Frm 00081 Fmt 4701 Sfmt 4700 E:\FR\FM\29OCR2.SGM 29OCR2Specifically, we have revised§ 668.59(a) to require institutions tosubmit, for reprocessing, any change toan individual data element on anapplicant’s FAFSA that is $25 or more.For example if the difference reportedfor AGI is $24, and taxes paid is $20, theinstitution would not be required tosubmit changes to the Department forreprocessing. However, if the differencefor AGI is $25, and $20 for taxes paid,the institution would be required toupdate all changes, not just the changethat exceeded the tolerance.We also made conforming changes in§ 668.164(g)(2)(i) to reflect that anydependent student, whose parent isapplying for a Direct PLUS Loan mustcomplete a FAFSA in accordance withsection 483 of the HEA in order toobtain a SAR or ISIR with an officialEFC to meet the conditions for a latedisbursement.In addition we have amended§ 668.164(g)(4)(iv) to reflect the changesthat were made under § 668.59(a) thatrequire all changes to an applicant’sFAFSA information be submitted to theCPS System for correction, exceptfinancial data that is less than $25.Therefore, an institution may not makea late disbursement of any title IV, HEAassistance until it obtains a valid SARor valid ISIR.Changes: We have revised § 668.59(a)to provide that if an applicant’s FAFSAinformation changes as a result ofverification, the applicant or theinstitution must submit to the Secretaryany change to a nondollar item on theFAFSA and any change to a dollar itemon the FAFSA if the change to thatdollar item is $25 or more.We have revised § 668.164(g)(2)(i) torequire an applicant whose parent isapplying for a Direct PLUS loan to havea SAR or ISIR with an official EFC tomeet the conditions for a latedisbursement.We have also revised§ 668.164(g)(4)(iv) to provide that aninstitution may not make a latedisbursement of any title IV, HEAprogram assistance unless it receives avalid SAR or valid ISIR for the studentby the deadline date established by theSecretary in a Federal Register notice.Comment: One commenter stated thatit is not opposed to requiring thatinstitutions submit all corrections toCPS but expressed concern with theincreased number of applicants selectedfor verification when there is a changeto a school code or address.Discussion: It is true that, in a limitednumber of instances, verification couldbe triggered when an applicant makes acorrection to his or her address or to aschool code. This is because the