Publication Date: December 6, 2011
Subject: Expected Family Contributions of 99,999
Summary: The purpose of this letter is to describe the special actions that an institution must take, beginning with the 2012-2013 Award Year, when the Expected Family Contribution (EFC) of a student is reported as 99,999.
Over the past several years, there has been an increasing number of Free Application for Federal Student Aid (FAFSA) filers whose EFC equals or exceeds 100,000. However, the Department’s Central Processing System (CPS), the Institutional Student Information Record (ISIR), and the Student Aid Report (SAR) field lengths for EFC are only five digits. This means that a calculated EFC of 100,000 or more results in a CPS stored and ISIR/SAR reported EFC of 99,999.
Expected Family Contribution (EFC) – In most instances, the reported EFC of 99,999 is more than the student’s cost of attendance (COA), and there is little likelihood of any inadvertent awarding of subsidized Title IV aid (Direct Subsidized Loans, Federal Work Study (FWS), Perkins Loans, and Federal Supplemental Educational Opportunity Grants (FSEOG)). Since the maximum EFC for the Federal Pell Grant Program is well below 99,999, the ISIR/SAR reporting of 99,999 has no impact on the calculation of any student’s Pell Grant award. Nor does it impact a student’s eligibility for unsubsidized Title IV aid (Direct Unsubsidized Stafford Loans, PLUS Loans, and TEACH Grants), since EFC is not used to determine eligibility for those programs. However, in those cases where the student’s COA is greater than the reported EFC of 99,999 (or the COA is greater than the reported alternate EFC for periods of other than nine months), subsidized Title IV aid could be inadvertently awarded.
AGI and income earned from work – Similar to the EFC issue, the field length for some FAFSA and FAFSA on the Web (FOTW) data elements is limited to six digits. Thus, a student, or a dependent student’s parent(s), with an Adjusted Gross Income (AGI) or income earned from work of $1 million or more is not able to enter the actual amount of his or her income and is instead instructed to enter $999,999.
Implications - While the number of times these field length limits occur remains very low (less than one-half of one percent of all FAFSA filers), they have increased over the past few years. Because of this and because of higher COAs at some institutions, there is a small but increasing likelihood that the EFC 99,999 reporting limit could result in some students being inadvertently awarded subsidized Title IV aid.
As noted, and as more fully explained below, the potential for incorrect subsidized aid awards due to field length limitations occurs only in those few instances where the student’s COA exceeds 99,999 (or where the student’s COA exceeds the alternate EFC for periods of other than nine months). Thus, for the vast majority of institutions, there is no action to take, and action need only be taken if the student’s ISIR or SAR reported EFC is 99,999 and the student’s COA exceeds the appropriate EFC.
We are considering what system changes (both at the Department and at schools) would be needed to expand the EFC and income fields; however, no system changes are possible for the upcoming 2012-2013 FAFSA processing year. Therefore, to avoid awarding subsidized aid to ineligible students, beginning with the 2012-2013 award year, when a student’s ISIR or SAR includes a reported EFC of 99,999, institutions must follow the interim guidance specified below when evaluating a student’s eligibility for a Direct Subsidized Loan or for an award under the FWS, Perkins Loans, and FSEOG programs.
While we regret the increased workload that this issue may impose on some institutions with high COAs, the need for a hand calculation is limited to only those applicants with a reported EFC of 99,999.
Thank you for your cooperation in this very important Title IV program integrity initiative. If you have any questions, please contact Carney McCullough at firstname.lastname@example.org or Dan Klock at email@example.com.
Eduardo M. Ochoa
Office of Postsecondary Education
Publication Date: 12/7/2011