The 2020 Federal Student Aid (FSA) Training Conference took place last week, and there were some announcements about changes to financial aid policies that will benefit students.
Some quick background: This annual, multi-day event is hosted by the U.S. Department of Education and is focused on training for financial aid administrators around the country. Like almost every other event in 2020, this was a virtual conference (not
without technical difficulties) that attracted a record number of attendees. The conference usually has 5,000-7,000 financial aid professionals. This year, registration approached 16,000. Perhaps the downside of the event was that all sessions were pre-recorded,
and there was no opportunity for live interaction and Q&A.
Update From FSA COO Gen. Mark Brown
The conference opened with a warm welcome from General Mark Brown, Chief Operating Officer for FSA. He spoke about FSA’s Next Gen initiative, a broad effort to simplify the process of applying
for, managing, and repaying federal financial aid. He also noted FSA has adopted a strategic plan for which the first goal is to “put people first.” This translates to making sure qualified people are in the appropriate positions at FSA.
Gen. Brown also mentioned the extraordinary effort that that FSA has made/continues to make to adjust to pandemic realities. His message included his motto of “Stay in the fight,” at a time when the fight is most important for our students and parents.
Big News on FAFSA Verification
In terms of relevance to those of us who help families through the FAFSA and verification processes, the best news of the conference is that the verification selection rate has dropped to 18% for 2021-22 filers. The rate represents a 4% decrease from
the last cycle.
FSA uses a machine learning model (MLM) to determine which FAFSA filers are selected for verification, based on risk scores. The MLM retrains each year. The Department conducted a cost-benefit analysis and determined that the costs outweigh the benefits
when more than 18% of FAFSA filers are flagged for verification. Please note that the 18% selection rate is for all filers. There will be a higher selection rate among the pool of students who are eligible for Pell Grants.
FSA’s reduced verification rate is projected to reduce verification melt by as many as 50,000 FAFSA filers for the next academic year.
Please note that the presentation included the point that colleges may not require tax transcripts unless they have reason to suspect something is amiss with a signed copy of tax forms that were submitted. If colleges in your area are still requiring
a tax transcript as the general rule, you may wish to share this information with the college and remind them they must accept signed tax forms unless there is an issue.
We would be remiss not to mention that FAFSA completion is down 16% year-over-year for high school seniors. We will be helping many students through verification, assuming we can get more students
from the high school class of 2021 to get their FAFSA filed.
New Annual Loan Acknowledgment, Mobile App Updates, and Other News
Perhaps the new federal requirement for the annual student loan acknowledgement will become the key messaging piece for the 2021-22 academic year.
This new requirement for student or parent borrowers is intended to help borrowers better understand their loan balances, interest and accrual rates, and projected repayment amounts. The new process will be in addition to the current MPN and entrance
counseling requirements. Students will have the opportunity to review College Scorecard data to help with the perspective about total amounts commonly borrowed.
This requirement will begin for the next academic year, and the acknowledgement is slated to be ready in March 2021. There is not a demo site available. As more information is released, we will share it with NCAN members so you can develop appropriate
messaging for your students.
Moving forward, please be clear about this one point: If a borrower does not complete the acknowledgement, no loan will credit to their account. Please also note that this is an annual requirement for the borrower. Current borrowers will review their
loan history and acknowledge new loans for the coming year.
Enhancements to FSA’s myStudentAid mobile app were released this week. While there are some minimal changes to the FAFSA completion portion of the app, the most significant updates are
all related to student borrower information and processes. Features such as a loan simulator, the new annual student loan acknowledgement, and a public service loan forgiveness tool are major new features.
We’re still waiting on some additional critical information from FSA. Since the government is operating under a continuing resolution, there are no Pell Grant tables available for next year (because lawmakers have not yet finalized the legislation that
determines final Pell Grant amounts for 2021-22). As soon as Congress passes a final budget bill, Pell Grant tables can be released. We anticipate there will be a small increase in the maximum Pell Grant amount for next year.
If and when there is another COVID relief package, there may be additional funds directed to K-12 and higher education. We will need to wait for specifics in that type of package to know what may be available to students.
It is our hope to keep members as up to date as possible with information coming from Federal Student Aid. We applaud FSA’s work to continue to assist students during this particularly difficult period.
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