VerificationChangesF..

Report
MASFAA 2013
October 6th – 9th, 2013
Indianapolis, Indiana
Verification Changes For
2014-15
Jamie A. Malone
U.S. Department of Education
Verification Selection
CPS applies risk model to FAFSA data
Goal is to target verification based upon most error
prone data items specific to an applicant
 Non-selected applicants are again subject to risk
model when submitting corrections
Corrections flagged as PJ are not subject to
verification edits
 Adding/deleting a school code can trigger a
verification selection
2014-15 Verification
Verification items
June 13, 2013 Federal Register
Retained all items subject to verification in
2013-14
DCL GEN-13-16, June 13, 2013
• Added new tracking group
Household Resources
2014-15 Verification Tracking Groups
Verification Tracking Groups
Each group has specified verification items
• V1
• V3
• V4
• V5
• V6
Student stays in same group, regardless of ISIR
corrections
Group Number Will Show As Verification Tracking FLAG on ISIR
Verification Flags On ISIR
Verification Flag
Y = selected for verification
N = not selected for verification
* = selected for verification on a subsequent
transaction
Verification Selection Flag
Blank = transaction not selected for verification
Y = transaction now selected for verification when
transaction being corrected was not selected
2014-15 Verification
ED will not publish a Verification Worksheet
• Use suggested text that will be provided in
upcoming IFAP Electronic Announcement
IRS request instructions attached to DCL GEN-13-16
Do not send families to IRS office to request
transcripts

Verification Exclusions
No Verification Required
 Student dies
 Student receives no Title IV aid
 Student eligible only for unsubsidized aid
 Transfer student who completed verification at
previous school and current school can obtain
certification with ISIR transaction number from
previous school
Verification Exclusions
Verification of parental information not required Parents cannot be reached by normal means of
communication
 Both parents are mentally incapacitated
Verification of student’s spouse’s information not
required Spouse is deceased
 Spouse is mentally incapacitated
 Spouse cannot be reached by normal means of
communication
Verification & Professional Judgment



Regulation codifies FSA policy that all applicants
selected for verification must complete verification
before any PJ adjustments to FAFSA are made
Refers to HEA section 479A(a)
Statement must be included in school’s written
policies and procedures about verification
V1 Standard Tax Filers

Adjusted Gross Income
 U.S. Income Tax Paid
 Untaxed Portions of IRA Distributions
 Untaxed Portions of Pensions
 IRA Deductions and Payments
 Tax Exempt Interest Income
 Education Credits
 Number of Household Members
 Number in College
 And if included on ISIRNutrition Assistance Program (SNAP – Food Stamps)
 Child Support Paid
 Supplemental
V1 Standard Non Tax Filers

Income Earned from Work
 Number of Household Members
 Number in College
 And if included on ISIR
Supplemental Nutrition Assistance Program (SNAPFood Stamps)
Child Support Paid
V3 Child Support Paid

Child Support Paid by the student (or spouse),
the student’s parent or both
V4 Custom



High School Completion Status
Identity/Statement of Educational Purpose
And if included on ISIR
Supplemental Nutrition Assistance Program
(SNAP-Food Stamps)
Child Support Paid
V5 Aggregate



High School Completion Status
Identity/Statement of Educational Purpose
AND
All items indicated in V1
 Tax Filer
 Non-Tax Filer
V6 Household Resources
For both tax filers and nontax filers:
• All items indicated in V1
AND
•
Other Untaxed Income on the 2014–2015 FAFSA–
• Payments to tax-deferred pension and savings (Questions 45a and
94a)
• Child support received (Questions 45c and 94c)
• Housing, food and other living allowances paid to members of the
military, clergy and others (Questions 45g and 94g)
• Veterans noneducation benefits (Questions 45h and 94h)
• Other untaxed income (Questions 45i and 94i)
• Money received or paid on the applicant’s behalf (Question 45j)
DOCUMENTATION
Acceptable Documentation
For Items on 2013 Tax Return
•
Information obtained through IRS data retrieval on
FOTW
IRS Request Flag value of 02
OR one of the following-• Tax Return transcript obtained from the IRS
• Record of Account Transcript obtained from the IRS
• Return Transcript for Taxpayer (RTFTP) obtained
from the IRS
2014-15 IRS Data Retrieval
IRS Data Retrieval will populate on FOTW• Adjusted Gross Income
• U.S. Income Tax Paid
• Untaxed Portions of IRA Distributions
• Untaxed Portions of Pensions
• IRS Deductions and Payments
• Tax Exempt Interest Income
• Education Credits
School must have code 02
2014-15 IRS Data Retrieval
CANNOT BE USED when• Married independent student and spouse filed
separate tax returns
• Married parents of dependent student filed
separate tax returns
• When dependent student’s parents are unmarried
and living together
• When student or parent had marital status change
after 12/31/13
• When student, spouse, or parent filed an amended
tax return – 1040X
From Program Integrity Q&A
QuestionWhat if school has both IRS data retrieval information
and the IRS Tax Return Transcript?
AnswerIf any “per computer” amount on Tax Return Transcript
differs from data retrieval amount by $25.00 or more,
ISIR must be corrected.
Rollover On Tax Return
IRS data retrieval will populate ISIR with untaxed
income
 You must collect Written statement from tax filer indicating the
amount of the distribution that was excluded because
it was an IRS authorized rollover
OR
 Signed and dated notation indicating “Rollover” on
IRS Tax Return Transcript
2014-15 Verification
When is collection of a paper 2013 tax return
acceptable?
• Amended tax return was filed
• Victim of IRS identity theft
• Filed non-IRS income tax return
Amended Tax Returns
Acceptable documentation
• Signed copy of the amended tax return (1040 X) that
was filed
AND
• Either a signed copy of the original tax return that was
filed, an IRS tax return transcript, an IRS Record of
Account Transcript, or a Return Transcript for Taxpayer
(RTFTP)
Victims Of Identity Theft
Collect a signed copy of the paper 2013 tax return that was
filed AND a copy of IRS Form 14039 “Identity Theft Affidavit”
 For taxpayer who does not have IRS Form 14039, collect
either—
 A signed and dated statement indicating tax filer was
victim of IRS identity theft and that IRS is investigating.
Must include certification that taxpayer did file IRS
Form 14039 and did not keep copy OR was not
required to file such form
OR
 A copy of a police report related to identity theft filed by
the tax filer
Taxpayer Has IRS Extension
Verification is complete if you have -– Documentation
of IRS extension for tax year 2013 &
– 2013 W-2 forms or statement from self-employed
individual
 School may require an individual granted a tax filing
extension to provide a copy of their completed and
signed tax return when filed
 If school receives a copy of the return, it MUST verify
AGI and taxes paid
 If school does not receive copy, may return all funds
disbursed
IRS Tidbits

Changing “income earned from work” will NOT
change the IRS data flag

IRS flags do NOT indicate who made change to
data item
Acceptable Documentation
Income earned from work for non-tax filer
 Signed statement by earner certifying that he/she is
not required to file an income tax return for 2013
 Documentation of sources and amounts of incomeW-2 Form
OR
Signed statement explaining amount of income of
earned, source of income, and reason why W-2 is
not available in timely manner
2014-15 Change for Non Tax Filers
•
Non tax filers are those individuals who state that they will
not file a tax return for 2013 and are not required to file a
tax return for 2013.
• School must make sure person is not required to file per
IRS rules
• W-2 is required but if cannot be provided, school may
accept signed statement certifying• Amount of income earned from work
• Source of income earned from work
• Reason why W-2 is not available in timely manner
2014-15 Change for Non Tax Filers
•
If school doubts claim that did not file tax return for
2013, school MUST require IRS “Verification of
Nonfiling”
• Request using IRS Form 4506-T, box 7
IRS will not provide until after 6/15/14
Acceptable Documentation
Number in Household
 Signed
statement
• Includes name, age, and relationship to applicant
Exceptions to Household Size Verification
For dependent student when parents marital status is
– separated
or unmarried (single, divorced, or
widowed) and family size on the FAFSA is 2
– married and family size on the FAFSA is 3
For independent student who is
– separated
or unmarried (single, divorced, or
widowed) with the family size on the FAFSA is 1
– married and the family size on the FAFSA is 2
2014-15 Change For Household Size
For dependent students
• Must include both of dependent’s student legal
(biological or adoptive) parents if parents live
together, regardless of marital status or gender of
parents
Acceptable Documentation
Number in College
Signed statement
• Name and age of each household
member who is/will attend eligible
postsecondary educational institution as
at least a half-time student in 2013–2014
• Name of the eligible institution(s) that
each household member is or will be
attending during 2013–2014
Not required if applicant is only member in
college
•
Acceptable Documentation
SNAP - Supplemental Nutrition
Assistance Program (Food Stamps)
- if receipt is indicated on the 2014-15 FAFSA
 Documentation
from the agency that issues the Food
Stamps benefit or signed statement from
parent/student that someone in FAFSA household
received benefit in calendar year 2012 or 2013
Acceptable Documentation
Child Support Paid - if reported on the 2014-15
FAFSA
Statement signed by child support payor or spouse-
Amount of child support paid
• Name of the person to whom child support was
paid and
• Name of the children for whom child support was
paid
•
2014-15 Change For Child Support Paid
•
Schools may accept records of electronic payments
as documentation that child support payments were
made
From Program Integrity Q&A
What should be done when FAFSA/ISIR does not reflect
receipt of SNAP benefits, but verification documentation
does reflect receipt?
 Three Part Answer
a) If student qualified for simplified needs test or
automatic zero EFC without receipt of SNAP, no
change to ISIR is required.
b. If student could not have qualified for simplified needs
test or automatic zero EFC because of income, no
change to ISIR is required.
c. If after verification, it is determined that receipt of
SNAP on ISIR will benefit student, school must
change ISIR to reflect receipt.
High School Completion Status
•
•
High School Diploma
• Copy of high school diploma
• Copy of final high school transcript showing
date completed secondary school education
Recognized Equivalent of High School Diploma
• GED certificate
• State certificate received after passing state
authorized exam recognized by state as
equivalent of high school diploma
High School Completion Status
Recognized Equivalent of High School Diploma
• Academic transcript showing successful
completion of at least a two year program
acceptable for full credit toward a bachelor’s
degree
• For associate degree or higher, documentation
showing the student did not graduate from but
excelled academically in high school and meets all
formalized, written admissions policies of
postsecondary school
High School Completion Status
Homeschool
• Transcript or equivalent signed by parent/guardian
that lists secondary school courses completed and
documents successful completion of secondary
school education
• Secondary school completion credential for
homeschool
High School Completion Status
Foreign High School
 If copy of diploma or transcript is not available, obtain
copy of “secondary school leaving certificate” through
appropriate governmental agency of the country (Ministry
of Education) where secondary education was completed
You must determine if foreign secondary school
credential is evidence of completion of equivalent of U.S.
secondary education
2014-15 Change For High School
Completion Status
•
•
If school has obtained acceptable documentation of
student’s high school completion status prior to
verification selection in Group V4 or V5, that
documentation does not need to be obtained again
High completion in a foreign country
 If student cannot provide copy of diploma or transcript,
school may accept copy of “secondary school leaving
certificate” or other similar document obtained through
appropriate government agency in country where high
school was completed (ex: Ministry of Education)
Identity/Educational Purpose
Documentation of identity/statement of educational
purpose
• Appear in person and present to an institutionally
authorized individual-• A valid government-issued photo identification
(driver’s license, non-driver’s license, other Stateissued identification, or passport); and
• A signed statement of educational purpose
Identity/Educational Purpose
Documentation of identity/statement of educational
purpose
• If unable to appear in person, must provide the
institution
• A copy of a valid government-issued photo
identification (driver’s license, non-driver’s
license, or passport); and
• An original notarized statement of educational
purpose signed by the applicant
Identity/Educational Purpose
Documentation of identity/statement of educational
purpose
• School must maintain, an annotated copy of the
identification submitted by the applicant that
includes
• The date documentation was received; and
• The name of the institutionally-authorized
individual that obtained the documentation
Required Verification Text
Schools must use EXACT Department language for
“Statement of Educational Purpose”
 Provided in 6/13/13 Federal Register & IFAP
Electronic Announcement to be posted
2014-15 Change Identity/Statement Of
Educational Purpose
•
•
School must obtain ORIGINAL signed statement of
educational purpose
May convert to electronic record after examination for
accuracy and completeness, for record retention
purposes
Updating
FAFSA information is generally considered a
snapshot
• Must update for –
• Dependency status changes (all applicants,
anytime unless marital status of applicant
changes)
• Household size and number in college for
selected applicants at time of verification
Updating For Marital Status
You may require updating due to change in
applicant’s marital status if you determine update
is necessary to address inequity or accurately reflect
ability to pay and
• Student is selected for verification
OR
• Marital status change results in dependency
status change
Student’s Marital Status Changes
Students use FAFSA on the Web to update their
marital status after submission of FAFSA
 EFC will not be calculated & Reject 21 gets set
 Only an FAA can override the reject
 Instructions have been modified to the following –
“Report your marital status as of the date you
sign your FAFSA. If your marital status changes
after you sign your FAFSA check with the
financial aid office at the college.”
Student’s Marital Status Changes
When you allow an update for change in marital
status, you must update all information to be
consistent with the updated marital status
 Dependency status, adding or excluding spouse’s
income and assets, and adding or excluding parental
information
Verification & Interim Disbursements
For 2012-13 and forward
• Interim disbursements may be made without receipt
of corrected ISIR if completed verification makes no
change to aid eligibility
• However all required corrections must be
submitted to CPS and school must receive
revised ISIR transaction
Verification Completed After Enrollment
Has Ended
 Student no longer limited to lesser Pell award if
verification completed after enrollment ends
 Student would receive Pell payment based
upon correct EFC
From Program Integrity Q&A
QuestionMay a school disburse unsubsidized aid before
completing verification when student has eligibility for
subsidized aid?
AnswerYes, a disbursement of unsubsidized aid may be
made, but the subsidized aid must be included as
estimated financial assistance in determining eligibility.
And once verification is complete, make sure no
overaward exists.
I would appreciate if you would take the time
to submit an evaluation of my presentation.
Please use the link below. Thanks much!
http://s.zoomerang.com/s/JamieMalone
Or you can email your comments to:
[email protected]
QUESTIONS?
Jamie A. Malone
Training Officer
U.S. Department of Education
312-730-1528
[email protected]

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