While the U.S. Department of Education (ED) stated prior to the government shutdown on October 1, 2013 that it believed there would likely be little impact felt if the shutdown did not last long, there appears to be some circumstances that are impacting the Federal Student Aid process, other financial resources available to students in the near term, as well as reporting and information dissemination capabilities.
Tax Return Transcripts: The first area of concern that has surfaced to bring immediate questions to mind is in regard to tax return transcripts for those students required to submit them for verification purposes. The preferred method for verifying students’ and parents’ information submitted on tax returns is through the IRS Data Retrieval Tool (DRT) process utilized as part of the initial FAFSA application or through corrections submitted via FAFSA-on-the-Web. Our best understanding at this point is that the IRS DRT process is to be operational during the government shutdown. However, for those students not able to or choosing not to use the IRS DRT process, students do have to provide tax return transcripts (except in very limited situations described in the 2013-2014 Federal Student Aid Handbook’s Application & Verification Guide). It is being reported that there are difficulties in getting IRS tax return transcripts processed. Some have questioned whether schools may opt instead to use signed copies of paper IRS tax returns for verification due to the shutdown. The guidance from ED is that only in very limited situations are copies of paper tax returns considered acceptable for completing the verification process. A “government shutdown” is not described as one of those limited situations. ED acknowledged in an August 21, 2012 Electronic Announcement that the instances described as one of the limited situations “may not reflect all of the unique filing circumstances where a signed copy of a tax return or other documentation may be acceptable documentation.” The statement went on to say that ED “will continue to provide guidance as appropriate.” But, since no ED personnel are available to clarify if this would be another unique circumstance where a signed copy of a paper tax return would be deemed acceptable, schools are not able to unilaterally decide that paper tax returns may be accepted due to the government shutdown.
Schools are reminded that they do have the “option” to utilize interim disbursements as described in the Application and Verification Guide (page AVG-86). Interim disbursements are allowed prior to completion of verification of selected applicants if you have no reason to question the accuracy of the information on the FAFSA. The interim disbursements provision allows an institution to make one disbursement of Pell, Perkins, and FSEOG funds for the applicant’s first payment period, permits FWS employment for the first 60 consecutive days after the student enrolls for the award year, and allows the institution to originate, but not disburse, a Direct Subsidized Loan. Should schools choose to use this option, they must be aware that the school is responsible for any overpayments that result due to unresolved issues of verification (e.g., not getting the required documentation and completing verification) and/or not receiving final corrected and valid ISIRs within the appropriate time frames.
Aid to Military Students: It has been reported that military students starting a course after October 1, 2013 will not be eligible for Tuition Assistance until Congress passes a funding bill for FY 2014. Students will be affected even if they requested funding prior to October 1 but did not start classes until that day or after. Veteran students may choose to utilize their veterans’ benefits toward courses in this situation. But, even they may be affected if the shutdown lingers late into this month as the Department of Veterans’ Affairs claims processing and payments will be suspended when currently available funds run out.
Reporting and Information Dissemination Capabilities: Institutions that may desire to submit their IPEDS Fall Cycle reporting information that is required will find that the IPEDS Web site is shut down. Therefore, schools will not be able to complete their IPEDS Fall cycle submissions during the government shutdown. It is possible, and may be reasonable to expect, that ED will modify Fall data submission deadlines in consideration of the impact of the shutdown.
Likewise, since the IPEDS Web site is powered by the National Center for Education Statistics (NCES) and its Web site is not functioning during the government shut down, this impacts its affiliated Web sites, or ones with which it is integrated. Some other important consumer information sites such as College Navigator and the College Affordability and Transparency Center, are also not accessible during the shutdown. Institutions that may use such sites to assist in complying with consumer information disclosure requirements should be aware that appropriate consumer information disclosures must still be provided students, prospective students, etc., as applicable under consumer information disclosure regulations whether the Federal sites are available to assist in some measure as a tool or not.
More information will be provided regarding the impact of the government shutdown as it becomes available.