March 16, 2023
On Tuesday the Department of Education (ED) opened a 60-day comment period on a proposed new information collection by which institutions will be required to report individual students’ Federal Work-Study (FWS) earnings through the Common Origination and Disbursement (COD) system. While previous mention of this new reporting requirement referred only to collecting the student’s calendar year FWS earnings, the documents published this week indicate that several additional FWS-related fields will be required for 2024-25.
For background, ED developed this new reporting process because of two FAFSA changes made by Congress in the FAFSA Simplification Act. The first change prohibits ED from asking additional questions beyond a list specified in Section 483(a)(5), where FWS earnings are not included. The second change, in Section 483(a)(2)(F), requires ED to “take steps necessary” to collect applicants’ FWS earnings data without adding a question to the FAFSA, “including by collecting such information from institutions.”
FWS earnings are necessary to calculate the Student Aid Index (SAI) because they will continue to be treated as an exclusion to income in the SAI calculation as they are currently in the Expected Family Contribution (EFC) formula.
While the statutory changes apply to the 2024-25 FAFSA, they refer to calendar year 2022 FWS earnings since prior-prior year data is used. ED officials indicated at the Federal Student Aid Training Conference (FSATC) that institutions would be required to report 2022 FWS earnings prior to the launch of the 2024-25 FAFSA, which ED is required by law to release by Dec. 31, 2023. FWS earnings data will then be sent from COD to the FAFSA Processing System (FPS) (currently referred to as the Central Processing System, or CPS) to be used in the SAI calculation.