Transcript Verification

Verification
TASFAA 2011 ABC Workshop
Consuela Mitchell
Director of Student Financial Aid Services
Tarrant County College-NE Campus
2011-2012 Application & Verification Guide (AVG)
http://ifap.ed.gov/fsahandbook/1112FSAHandbookAVG.html
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Verification Topics
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Policies and procedures
Whose application must be verified
Quality Assurance Program requirements
Which data elements must be verified
Acceptable documentation
Data element corrections
Data element updates
Interim disbursements
Verification time frames
Changes beginning 2012-2013
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Verification
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Process of verifying accuracy of FAFSA data
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Regulations define:
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Whose application must be verified
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Data elements to be verified
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Documentation used to verify data elements
(AVG-80)
(AVG-82-83)
(AVG-85)
Regardless of verification selection, must
always resolve discrepancies and conflicting
information
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Verification Policies and
Procedures
Must:
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Be written
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Address school options where flexibility exists
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Be made clear to all students
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Be consistently applied
(AVG-79)
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Verification Policies and
Procedures
Must include:
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Procedures for identifying and processing selected applications
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Deadline for applicant to provide documentation
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Consequences of failure to meet deadline
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Procedures applicant must follow to correct application information
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Method for notifying applicant of verification results and change in
EFC and/or award
Procedures for referring overpayments to ED
Procedures for referring cases of suspected fraud or other criminal
misconduct to ED Office of Inspector General
(AVG-79)
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Whose Application Must Be
Verified?
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Applicants selected by Central
Processing System (CPS)
Applicants selected by institution
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Programs to Which Verification
Applies
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Federal Pell Grant
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Campus-based programs
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Subsidized Direct Loan program
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30% Verification Option
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30% is cap, not minimum
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Applications making up 30% must be CPS-selected
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If more than 30% selected by CPS, may choose to verify
more than 30%
Document files of CPS-selected applicants not verified
30% option does not relieve institution of responsibility to
resolve conflicting information
*30% cap eliminated beginning 2012-2013*
(AVG-80-81)
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Institutionally-Selected
Applications
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Institution can select additional applications
not selected by CPS
Selection may be based on such data
elements as:
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Estimated tax figures
Low family income levels
Large household size or number in college
Completion of certain FAFSA data elements
Other institutional criteria
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Verification Exclusions
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Certain types of applicants and data elements
exempt from verification
Reason for verification exclusion should be
documented in student’s file
Except for applicant who dies during the award
year, if conflicting information or reason to
believe application information is inaccurate,
exclusions do not apply
(AVG-81-82)
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Verification Exclusions
Exclusions include or are limited to:
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Entire application—student and
parent data
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Applicant’s spousal data only
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Certain data elements
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Quality Assurance Program
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Participation voluntary
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ED provides guidelines, tools, and incentives for participation
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Participating schools exempt from prescribed verification requirements
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School sets verification parameters
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School must reassess and self-correct verification process on ongoing
basis
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Every other year – Random Sample must be completed
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Quality Assurance Website: http://ifap.ed.gov/qahome/Default.html
(AVG-80)
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Required Verification Data
Elements
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Household size
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Number enrolled in college
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Adjusted gross income (AGI)
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U.S. income tax paid, and
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Certain untaxed income and benefits
*required elements also change beginning 2012-2013*
(AVG-83)
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Required Verification Data
Elements
Certain untaxed income and benefits
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Child support
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IRA/Keogh deductions, and
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Interest on tax-free bonds
(AVG-88)
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Required Verification Data
Elements
Other untaxed income and benefits on the tax return
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Tax-exempt interest
income
Deductible IRA or
Keogh payments
Untaxed IRA
distributions and
pension or annuity
payments
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Homebuyer tax credit
Making Work Pay tax
credit
(AVG-19)
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Items That May Be Verified
Using the Tax Return
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Adjusted gross income
U.S. income tax paid
IRA/Keogh deductions and payments
Untaxed portions of pension distributions
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Untaxed IRA distributions
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Interest on tax-free bonds
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(AVG-85)
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Acceptable Tax Return
Formats
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Photocopy, facsimile, or digital image of original paper tax return
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If original copied without signature, at least one filer must sign
copy
Tax form completed to duplicate original return and signed by at
least one filer
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Other signed e-file documentation
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Form 8453 is a signature form for e-filers and not acceptable
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In lieu of return with filer signature, a return with tax preparer’s
stamped, typed, signed, or printed name, and SSN, EIN, or PTIN
(AVG 87-88)
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Alternative Sources of
Documentation
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IRS tax transcript listing tax return
information
Signed statement and W-2s from filer, if
tax return or tax transcript unavailable
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Tax Filing Extensions
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Collect W-2’s and one of following:
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IRS Form 4868; or
Copy of IRS approval of extension
beyond 4-month extension
Collect and review tax return when filed
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Child Support Documentation
Obtain verification worksheet or written statement
certifying amount of child support received for all
children
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Statement must be signed by applicant and at least
one parent (if dependent)
Statement must be signed by applicant if
independent
If support paid through government agency,
statement from that agency is acceptable
(AVG -88)
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Child Support Documentation
Request additional documentation if information
provided appears inaccurate
Copy of separation agreement or divorce
decree
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Signed statement from parent providing
support
Copies of canceled child support checks or
money order receipts
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(AVG-88-89)
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Number in Household & in
College
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Statement or verification worksheet listing each household
member’s:
 Name
 Age
 Relationship to applicant
 Postsecondary school (if any) attending at least halftime in program leading to recognized educational
credential
If institution doubts statement, it should obtain statement
from each postsecondary institution listed by applicant
(AVG -83-84)
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Verification Corrections
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Changes to data elements that were incorrect at time of
application
If data correct as reported and valid ISIR/SAR:
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Pay Federal Pell Grant, FSEOG, and Federal Perkins
Loan
Employ students under FWS
Certify/originate and disburse/deliver Direct
Subsidized Loans
(AVG 89-91)
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Tolerance Option
$400 net error tolerance for all Title IV programs (also eliminated
beginning 2012-2013)
*note: No Tolerance to non-dollar items like HH & # in college*
FAFSA
Parent AGI
+ Student AGI
+ Parent Untaxed Income
+ Student Untaxed Income
– Parent U.S. Taxes Paid
– Student U.S. Taxes Paid
= FAFSA data (uncorrected sum)
Net Difference:  $400
Correct
+
+
+
–
–
Parent AGI
Student AGI
Parent Untaxed Income
Student Untaxed Income
Parent U.S. Taxes Paid
Student U.S. Taxes Paid
= Correct data (corrected sum)
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Example: Tolerance Option
Data
Parent AGI
Parent Untaxed Income
Student AGI
Student Untaxed Income
Parent U.S. Income Taxes Paid
Student U.S. Income Taxes Paid
FAFSA Data
$15,800
+
1,200
+
9,200
+
0
–
500
–
200
= $25,500
Correct
+
+
+
–
–
$15,500
1,500
9,200
0
0
300
= $25,900
Net difference: $25,500 – $25,900 = $400
tolerance so not req’d to submit corrections)
(w/in
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Recalculating EFC: Federal Pell
Grant Program
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If net error is greater than $400,
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Recalculation of the EFC is necessary
If net error is less than or equal to $400,
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No recalculation of the EFC is necessary
(AVG-91)
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Verification Updates
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Changes to data elements that were correct
at time of application but have since changed
Applicable only to 3 items:
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Dependency status
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Number in household
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Number of household members enrolled in
college
(AVG 99)
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Verification Updates
Dependency status
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All students must update dependency status if
it changes at any time
Cannot be updated if it changes as result of
change in student’s marital status
(AVG-100-101)
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Verification Updates
Number in Household and Number in College
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If selected, data must be accurate as of
verification
If not selected, cannot update for changes
occurring after original application filed
If not selected, not required to monitor data
element change
(AVG-101)
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Verification Updates
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Cannot update change in student’s marital
status
Must update household size if dependent
student’s parent remarries after application,
before verification
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Professional Judgment
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If using PJ authority to adjust data elements
used to calculate EFC on a selected application,
application must be verified first
If using projected-year income data to
recalculate EFC, projected-year data do not need
to be verified
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Interim Disbursements
In the absence of conflicting information or reason to
believe information is inaccurate, institutions have the
following disbursement options when verification still
incomplete:
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Federal Pell Grant and campus-based programs:
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Withhold payment
Make 1 disbursement for 1st payment period
Employ applicant up to 60 days under FWS
(AVG-89,91)
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Interim Disbursements
Direct Subsidized Loans:
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Refuse to certify or originate loan; or
Certify or originate loan, but not
disburse/deliver loan proceeds
(AVG-91)
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Interim Disbursements
Verification not required for:
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Direct Unsubsidized Loans
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PLUS Loans
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TEACH Grant
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Nonfederal LEAP and SLEAP awards
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Robert C. Byrd Honors Scholarships
(AVG-81)
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Interim Disbursements
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If school makes interim disbursement and student
later determined ineligible, or if verification not
completed, award for which student is ineligible is
an overpayment
Student with overpayment is ineligible for Title IV
funds
School liable if overpayment not resolved
(Chap. 5)
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Verification Time Frames
Institution determines when in award cycle
to verify based on:
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Institution’s resources and procedures
When verification process would be least
disruptive to office and least problematic
for students
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Verification Time Frames
Verification Deadlines
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Campus-based and Direct Loans:
 Institutionally-established deadline
Federal Pell Grant:
 Institutionally-established deadline
 Institution must have verification documents
and valid SAR/ISIR by earlier of 120 days after
last day of enrollment or deadline published
annually by ED in Federal Register (expected to
be September 24, 2012)
(AVG-92)
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Verification 2012-13 and Beyond
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Changes to the Verification process will become effective July 1,
2012. However, colleges should plan to implement these changes
after January 1, 2012 for the 2012-13 award year.
Several changes have been made. Specific data elements will
be targeted, rather than requiring the same data to be
verified for all applicants.
Additional data elements beyond the five that have been
historically targeted may be added in future years. These may
include whether families have qualified for means tested benefits
or certain categories of financial independence.
The Secretary will publish a list each year of the data elements
that will be included in the verification process 4-6 months prior to
the start of the application processing cycle.
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Source: Final Federal Register October 29, 2010 Regulations: 668.51.61
Verification 2012-2013 and Beyond
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Schools must verify all cases selected. The 30% cap has been
eliminated.
Tolerance levels for dollar items has been eliminated. Instead, all
changes must be submitted to the CPS for reprocessing if the
change is $25 or more. All non-dollar item changes (e.g.
household size/number in college) must also be submitted.
The regulations now clarify that verification must be completed on
selected applications (if selected by the CPS or the school) before
a school may exercise Professional Judgment. The results of
verification & PJ changes cannot be submitted on the same day.
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The changes impose new requirements for the recovery of Title
IV funds if a school opts to use interim disbursements.
Conflicting documentation -- regardless of verification -- must still
be resolved.
Source: Final Federal Register October 29, 2010 Regulations: 668.51.61
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Available Resources
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Federal Student Aid Handbook
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Application and Verification Guide
http://ifap.ed.gov/fsahandbook/1112FSAHandbookAVG.html
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Institutional Policies and Procedures
IRS Publication 17 found at
www.irs.gov
Me!
[email protected]
817-515-6792
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