Can a School Assume Housing Status When Packaging Students?

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This guidance is not award-year-specific and applies across award years.

Yes, unless the school already knows the student's housing status at the time of packaging. The school can assume housing status when packaging students, but if the school doesn't actively collect it up front, the school has to inform the student and give them the opportunity to change or correct it.

There is often a big difference between a student living on campus versus living off campus versus living at home with parents. Therefore, as a general rule, it is NASFAA's understanding based on Section 472 of the Higher Education Act of 1965 (HEA), as amended, [20 USC 1087LL] that the school should have a way of knowing a student's housing intentions in order to assign the correct housing component in the COA, but we recognize that not all schools proactively collect this information up front before packaging. Knowing up front before packaging is ideal, but it is not required. However, if the school knows the student's housing status before packaging, it must use that housing status when packaging the student. According to guidance NASFAA has received from the U.S. Department of Education (ED), if the school knows the student's housing status but does not use it when packaging, the school has failed the administrative capability requirement under 34 CFR 668.16(f) and is liable for that mistake. On the other hand, in a situation where the school informed the student about updating housing status, but the student never bothered to inform the school, then ED doesn't "see how the school could be liable for not having the most current information."

That said, let's look at an example. When packaging a returning student for the current award year, the school uses the housing status from the prior award year (an assumption) and sends a notification advising the student of this and that any changes to that status should be reported to the financial aid office. The school includes language that failure to update the aid office could impact the student's aid eligibility. When the student notifies the aid office, it repackages the student.

According to ED, "That [seems] a reasonable approach to us given the new environment in which the housing question is no longer on the FAFSA. We can’t know how every school will handle the situation, nor would we want to investigate them all. If a school had no policy of informing students about how it was going to fill in housing status or how students could correct that or why they should, that would probably NOT be a reasonable approach."

ED goes on to provide the following alternatives for how to accomplish the same goal: "We’re not saying that schools can’t have other forms or ask students where they will be living—we’re saying that they can’t make the awarding or disbursing of Title IV aid contingent on students filling out that other form or otherwise providing that information. Presumably schools will now include a statement with their award letter, maybe in bold caps, that students will need to let the school know what their housing will be for the coming enrollment. Maybe schools where most of the students live on campus will assume that situation for the housing status pending an update from students to the award letter. Maybe some will call students or send them separate emails. They are free to do whatever they think will help make these determinations—as long as they ultimately don’t refuse to award or disburse Title IV aid because they never got the information from a student. The FAFSA is the only form that students absolutely must fill out for the receipt of Title IV aid. The law is clear about that."

Reference guidance under "The Application Process: FAFSA to ISIR" in the Application and Verification Guide (AVG) volume of the FSA Handbook regarding the restriction on requesting other forms or applications for Title IV aid. See also AskRegs Knowledgebase Q&A, Are We Required To Have Separate COAs For Students In Different Living Arrangements? 

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