MASFAA 2013October 6th – 9th, 2013Indianapolis, Indiana

Verification Changes For 2014-15Jamie A. Malone

U.S. Department of Education

Verification SelectionCPS 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 itemsJune 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 GroupsVerification Tracking GroupsEach 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 ISIRVerification FlagY = selected for verificationN = not selected for verification* = selected for verification on a subsequent

transaction

Verification Selection FlagBlank = transaction not selected for verificationY = 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-13-16Do not send families to IRS office to request

transcripts

Verification Exclusions

No Verification RequiredStudent diesStudent receives no Title IV aidStudent eligible only for unsubsidized aidTransfer student who completed verification at

previous school and current school can obtain certification with ISIR transaction number from previous school

Verification ExclusionsVerification of parental information not required-Parents cannot be reached by normal means of

communicationBoth parents are mentally incapacitatedVerification of student’s spouse’s information not required-Spouse is deceasedSpouse is mentally incapacitatedSpouse 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 ISIR-

Supplemental Nutrition Assistance Program (SNAP – Food Stamps)Child Support Paid

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 (SNAP-Food 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 V1AND• 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 DocumentationFor 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 CreditsSchool must have code 02

2014-15 IRS Data RetrievalCANNOT 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

Question-What if school has both IRS data retrieval information and the IRS Tax Return Transcript?

Answer-If 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 ExtensionVerification 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 DocumentationIncome earned from work for non-tax filerSigned 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 FormORSigned 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 HouseholdSigned 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 FAFSADocumentation 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 FAFSAStatement 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&AWhat should be done when FAFSA/ISIR does not reflect receipt of SNAP benefits, but verification documentation does reflect receipt? Three Part Answera) 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 StatusRecognized 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 StatusForeign 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 PurposeDocumentation 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 State-issued identification, or passport); and

• A signed statement of educational purpose

Identity/Educational PurposeDocumentation 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 PurposeDocumentation 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 ChangesStudents 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&AQuestion-May a school disburse unsubsidized aid before completing verification when student has eligibility for subsidized aid?Answer-Yes, 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!

Or you can email your comments to: Joann.borel@ed.gov

http://s.zoomerang.com/s/JamieMalone

QUESTIONS?

Jamie A. MaloneTraining OfficerU.S. Department of Education312-730-1528jamie.malone@ed.gov