- Higher education institutions must begin reporting individual students’ Federal Work Study earnings as of July 30, 2023, due to changes made by the FAFSA Simplification Act.
- Under the Act, your institution must collect an applicant’s FWS income information to submit to the Department of Education (ED), and ED may no longer add questions to the FAFSA to obtain this information directly from the applicant.
- Schools must report the total gross amount of all FWS earnings for each student to the COD system for any portion of the applicable year.
- Be prepared for the potential time burden and take steps to mitigate the additional impact on staff.
Get specific guidance on how to adapt to this and other industry changes.
The FAFSA Simplification Act (the Act) is making it easier for students to apply for federal student aid, but it also comes with reporting changes for higher education institutions.
As of July 30, 2023, institutions must report individual student’s Federal Work Study (FWS) earnings to the Department of Education (ED) through the Common Origin and Disbursement (COD) system.
Prepare for the upcoming changes by reviewing the details and learn how they could impact your higher ed institution.
What is the FAFSA Simplification Act?
Historically, there have been many concerns about the complexity and length of the Free Application for Federal Student Aid (FAFSA). The lack of transparency and ease dissuaded students and families from applying, ultimately discouraging post-secondary educational attainment.
This prompted Congress to pass the FAFSA Simplification Act in December 2020, which aimed to make it easier for students to apply for federal student aid.
How this impacts FWS data collection
The Act changed how ED obtains the amount of income an applicant earned under the FWS program. ED uses this information to calculate the applicant’s student aid index, and thus their eligibility for certain Title IV aid.
Moving forward, participating higher education institutions must collect information about an applicant’s income earned under the FWS program to submit to ED. ED may no longer add questions to the FAFSA to obtain this information directly from the applicant.
ED will begin collecting this data from institutions after August 1, 2023, to be used in the 2024 – 2025 FAFSA processing cycle.
How these reporting changes will affect your institution
Your school must report, for each student, the total (both institutional and federal share) gross amount of all FWS earning for any portion of the applicable year to the COD system. Amounts reported in COD must be rounded to the nearest whole dollar.
For the 2024 – 2025 FAFSA processing cycle, report FWS earnings disbursed at your institution from January 1, 2022, through December 31, 2022. Per the “calendar-year basis,” include all FWS earning amounts paid during the calendar year (January 1, 2022 – December 31, 2022), even if work was performed outside of the calendar year.
ED estimates organizations will need approximately four additional hours per student employee for this reporting; however, several sources view that estimate as highly unrealistic and anticipate it to be higher.
How to prepare for the reporting change
Familiarize yourself with the COD 2023 – 2024 Technical Reference. New COD system updates are designed to accommodate this reporting change, so review the website in detail to help make the reporting transition easier. Based on your organization’s number of students with FWS earnings, anticipate the potential time burden and take steps to mitigate the additional impact on staff.
How we can help
CLA understands the administrative challenges this can create for your institution. Our higher education professionals can help provide specific guidance on how to adapt to this change.