On December 12, 2024, the U.S. Department of Education (Department) issued an Electronic Announcement (GENERAL-24-143) outlining additional flexibilities for institutions handling late disbursements for students who filed paper FAFSA forms for the 2024-25 award year. This announcement is particularly relevant for financial aid professionals managing Title IV funds and aims to address challenges posed by delays in processing paper FAFSA forms. Below is a summary of the key updates and implications for institutions.
Extended Use of Application Receipt Date to Determine Late Disbursement Eligibility
The Department has extended the ability to use the Application Receipt Date of a paper FAFSA to establish late disbursement eligibility for the entire 2024-25 academic year. Previously, this flexibility was limited to the summer 2024 term (announced in GENERAL-24-94). This extension ensures that Title IV-eligible students who submitted paper FAFSA forms before their enrollment ended can still receive aid, even if their FAFSA was processed after they completed their enrollment.
Documentation Requirements: When possible, schools should rely on the Application Receipt Date indicated on the student’s Institutional Student Information Record (ISIR) from the FAFSA Processing System (FPS). However, if the Application Receipt Date on the ISIR is inaccurate, institutions may use alternative documentation to support the use of an earlier submission date. Acceptable documentation includes:
- A copy of the original paper FAFSA form
- Mailing receipts or delivery confirmations from the mailing service
- A signed statement from the student attesting to the submission date of the paper FAFSA form
Institutions must maintain this documentation in the student’s file to confirm eligibility, even if the ISIR’s Application Receipt Date is later than the date the institution documents.
Additional Flexibility in the 180-Day Late Disbursement Timeframe
Under existing regulations (34 C.F.R. § 668.164(j)), late disbursements must occur within 180 days of a student’s withdrawal or other ineligibility date (e.g., dropping below half-time status or completing their enrollment period). However, delays in paper FAFSA processing might render students ineligible to receive these funds within the standard 180-day timeframe.
To mitigate this issue, the Department has introduced an alternative start point for the 180-day timeframe for paper FAFSA filers. Specifically, for students who filed paper FAFSA forms for the 2024-25 award year, the 180-day late disbursement clock will now begin on the later of:
- The date the student withdrew or otherwise became ineligible for the award year.
- The earliest Transaction Processed Date with an official Student Aid Index (SAI).
This adjustment ensures that students affected by paper FAFSA processing delays retain access to Title IV funds they are eligible to receive.
Key Resources for Implementation
Financial aid offices should consult the following resources for additional guidance:
- Late Disbursement Requirements: Refer to the 2024-25 FSA Handbook, Volume 4, Chapter 2.
- ISIR Record Layouts and Processing Codes: Consult the 2024-25 FAFSA Specifications Guide, Volume 4.
If you or your office is concerned about these changes, please do not hesitate to reach out to our compliance experts at info@heag.us. We hope this information helps you ensure that students who rely on paper FAFSA submissions are not unfairly disadvantaged by processing delays. Financial aid professionals should familiarize themselves with the extended use of the Application Receipt Date and the adjusted 180-day late disbursement timeframe to better serve affected students and remain compliant with Title IV regulations.