Removing the Mask from Verification

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Removing the Mask from Verification
KASFAA Spring 2007 ConferenceBowling Green,
KYApril 11-13, 2007
Presented by Victoria Owens Director of Student
Financial Aid Jefferson Community Technical
College Louisville, KY
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What is Verification?

• The confirmation of the information provided by
  the students (and parents or spouses) on their
  applications.
• Confirms the accuracy of specific data elements
  reported on FAFSA
• Subject to options by financial aid
  administrators
• Sometimes uncovers conflicting information

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Required Verification Items

• Household Size
• Number in College
• Adjusted Gross Income (AGI) or income from work
  for non-taxfilers
• US Taxes Paid
• Certain types of untaxed income and benefits
• Social Security benefits
• Child Support
• IRA/ Keogh deductions
• Foreign income exclusions
• Earned income credit
• Interest on tax-free bonds
• All other untaxed income included on US income
  tax return, excluding information on the schedules

34 CFR 668.56
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Required Policies

• Your Verification policy must be written and
  cover the procedures regarding
• Deadlines for documentation consequences for
  failing to meet deadline
• A method of notifying students of award changes
  due to verification
• Required correction process
• Referral of overpayment cases to the US
  Department of Education
• You must also provide selected applicants with
  written information covering
• Documents required for verification
• Student responsibilities
• Notification methods

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Verification Options

• Applications are selected for verification either
  by the Central Processing System (CPS) or by the
  school.
• The Student Aid Report (SAR) or the Institutional
  Student Information Record (ISIR) will indicate
  selection by CPS
• School selection
• Beyond those selected by CPS (Ex. 100)
• May verify data items other than CPS-selected
  required items
• Have reason to believe data is questionable

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Verification Options

• 30 Option
• School must verify all CPS-selected verifications
  up to 30 of the schools total number of federal
  aid applicants.
• School-selected do not count
• Conflicting information corrections do not count

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Verification Exclusions

• Selected applicants may be exempt from
  verification requirements.
• Examples include but not limited to
• Student applicant incarcerated at time of
  verification
• Student applicant is recent immigrant (i.e.-
  arrived to US during calendar years 2007 or 2008)
• Death of student applicant
• Student applicant is Pacific Island resident

34 CFR 668.54(b)
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Acceptable Documentationfrom 2007-2008 Federal
Student Aid HandbookUS Department of Education
verification worksheets are not required for
documentation collection. School may create its
own verification documents as long as
information/signatures are obtained.
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Acceptable Documentation- Household Size

• Listing
• Names of household members
• Their ages
• Their relationship to the student
• Option to not verify, if following apply
• Household size is same as reported verified in
  the previous year,
• You received the SAR/ ISIR within 90 days after
  the application was signed
• For dependent students, the size reported for
  married parents is 3 or 2, if the parent is
  single, divorced, separated, or widowed
• Household size is 2 for a married independent
  student or one if the student is single,
  divorced, separated, or widowed.

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Acceptable Documentation- Number Enrolled in
CollegeMust meet criteria as defined on FAFSA

• Listing
• Names
• Ages of those enrolled
• Name of school of attendance
• Option to not verify, if following apply
• The reported number enrolled is one (the student
  only),
• You received the SAR/ ISIR within 90 days after
  the application was signed
• The family members are also enrolled at least
  half time at your school you have confirmed
  enrollment through your schools records.

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Acceptable Documentation- Adjusted Gross Income
(AGI) US Taxes Paid

• Tax documents depend on filing method- paper or
  electronic
• IRS Form 1040EZ, 1040A, 1040
• E-file providers format
• IRS Form 8453 does NOT have enough information
  cannot be used for verification
• Document must have signatures (or preparers
  stamp or other official validation)
• Must be complete and legible

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Acceptable Documentation- Income Earned from
Work (Non-filers)

• Individuals W-2 forms
• Signed statement certifying non-filer status and
  listing the sources amounts of income.
• Special Note If you have reason to believe this
  person would have been required to file a US tax
  return, this constitutes conflicting information
  and must be resolved

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Acceptable Documentation

• Financial Aid Administrators are not expected to
  be tax experts, but should know
• Whether an individual is required to file a
  federal tax return
• That an individual cannot be claimed by more than
  one person
• The individuals correct filing status
• Reference IRS Publication 17, 501, or 570

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Acceptable Documentationfrom 2007-2008 Federal
Student Aid Handbook

• Using a joint return to figure individual AGI and
  Taxes paid
• Tax Table (preferred method). Use IRS Tax Table.
  Calculate using deductions exemptions the
  individual would have used if filed a separate
  return.
• Proportional distribution. Determine percentage
  of joint AGI belonging to the individual assess
  the joint taxes paid by that same percentage.

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Acceptable Documentation- Untaxed Income and
Benefits

• Except for Social Security benefits and child
  support, the required items can be verified using
  the tax return or alternative tax documents.
• Not required to verify any untaxed income
  benefit received from a federal, state, or local
  government agency on the basis of a financial
  need assessment.

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Completing the Process

• Interim Disbursements- disbursement made before
  verification is completed (if you have no reason
  to believe the SAR/ISIR information is
  inaccurate.)
• School is liable if verification shows student
  not eligible for amount paid or if student never
  completes the process.
• Limitations vary based on program (Pell, Perkins,
  SEOG, FWS, Staffords)

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Completing the Process

• Selection after Disbursement-
• School must verify before making further
  disbursements.
• There is a change flag on the ISIR to call
  attention to this situation.
• IF verification yields reduced or ineligible aid,
  the student is responsible for repaying all aid
  (though Stafford loan funds FWS wages earned
  can be kept)

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Completing the Process

• After Documentation is Complete
• School must compare documents to SAR/ ISIR
  considered for payment.
• All correct info- may award disburse
• Errors/ inconsistencies revealed- may have to
  make corrections or update information.
• Tolerance
• 400 total difference
• NO non-dollar item difference
• May award without submitting correction or
  recalculating the EFC.
• Note No tolerance for errors in non-dollar
  items- school/ student must correct it.
• Deadline
• As published in Federal Register- expected to be
  Sept 24, 2008 or 120 days after the last day of
  students enrollment, whichever is earlier.
• Late Disbursement
• If processed SAR/ISIR with official EFC while
  student was still enrolled.
• If EFC changes as result, Pell awarded based on
  the higher EFC.

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Corrections, Updates, and Adjustments

• Corrections- information reported on initial
  FAFSA is wrong or was incorrect at the time.
• Updates-changes to FAFSA info. Which was correct
  when initially filed but has since changed.
• Dependency status, household size, number in
  college.
• Updating not permitted when a result of
  applicants marital status change.
• Adjustments- change made by aid administrator
  using professional judgment.

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Answer to Questionfrom Conference Session

• Question If a student was independent at time
  of filing FAFSA due to being pregnant however,
  at the time of verification the student has had a
  miscarriage, how does that affect her status?
• Answer (from NASFAA Training Tech Assistance)
  Dependency status must be updated. 668.55

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Questions?

• Verification Resources/ Tools
• Federal Student Aid Handbook Application and
  Verification Guide section
• Code of Federal Regulations
• Both located at the Information for Financial Aid
  Professionals (IFAP) website
• www.ifap.ed.gov