2014-2015

Verification

 Process of verifying accuracy of the Free Application for Federal Student Aid (FAFSA) data  Regulations define:  Whose application must be verified  FAFSA information to be verified  Documentation used to verify data elements  Regardless of verification selection, must always resolve discrepancies and conflicting information

Objectives

 Determine who and what needs to be reviewed  Compare and review acceptable documentation  Review FAFSA/tax transcript and/or other documentation for conflicting information  Determine if corrections are required

Step One - Determine Who Needs to Be Verified

 Determine who and what needs to be verified  FAFSAs are selected for verification by the Central Processing System (CPS) or the school  Corrected FAFSAs are re-evaluated  Institutions must verify all applicants selected by CPS for verification  School to select any student for verification Note: A school must verify any FAFSA information it has reason to believe is inaccurate regardless of selection by CPS

Step One - Verification Selection

 ISIR indicates in the Verification Flag field whether applicant has been selected  Y= Selected for verification  N = Not selected for verification  * = Selected on a subsequent transaction  Federal Student Aid Handbook and Federal Register   Provide written guidance on specific items to be verified for tax filers and non-tax filers Describe acceptable documentation

Step One - Verification Indicator - CampusVue

Step One - Verification Indicator

Step One - ISIR Verification Flag

Step Two – Compare Data

 Review and compare original data reported on FAFSA to appropriate documentation received  Schools must rely on the information provided by the IRS as the primary source of documentation for verification purposes  ED no longer considers it reasonable for an institution to accept anything less reliable than direct IRS-supplies evidence for verification of income data

Step Two - What Documents Do

  

I Need?

For taxable income, base year tax information    Verification Worksheet IRS Data Retrieval Tool (Flag 02) IRS Transcript For untaxed income and benefits     Must receive a W-2 from for each source of employment income Signed statement giving the sources and amounts of the person’s income earned from work no on W-2s and certifying that the person has not filed and is not required to file a tax return (Verification Worksheet) Official agency documentation Signed statement Other acceptable documents are listed in the FSA Handbook Application and Verification Guide

Step Two - Special Circumstances – Extension Filer

 Extension Filer     Verification is complete if you have  Documentation of IRS extension – IRS Form 4868, Application for Automatic Extension of Time to File U.S. Individual Income Tax Return  --and Copy of all W-2(s) or if self-employed, a signed statement with the amount of their AGI, and their U.S. income taxes paid MAY require an individual granted a tax filing extension to provide a copy of their completed and signed tax return when filed MUST verify AGI and taxes paid, if you receive a copy of the return MAY return all funds disbursed, if you do not receive copy

Step Two - Special Circumstances – Amended Tax Return

 Students or parents who file an amended return cannot use the IRS Data Retrieval Tool (DRT)  Required Documentation  Signed copy of the IRS Form 1040X that was filed --and  Signed copy of the original tax return that was filed, a tax return transcript, or any IRS transcript (such as a return transcript for taxpayer or RTFTP) that includes all the income and tax information required to be verified: AGI, income tax paid, education benefits, etc.

Step Two - Special Circumstances – Separated, Divorced, Widowed, or Married to Another Individual

 Individual filed a joint return now separated, divorced, widowed, or married to another individual  IRS Tax Transcript  Copy of W-2 form from individual whose income was included on FAFSA

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Step Three – Identify Conflicting Information

Review the FAFSA/tax transcript for conflicting information     Filing requirements  Example – married filing head of household Personal exemptions  Example – student claimed him/herself and parent claimed the student as well Correct filing status  Example – eligible to file a 1040A or 1040EZ but filed a 1040 Items to consider     Large amounts of taxable interest but no cash, checking, or savings listed on FAFSA Business income listed but no net worth of business listed on FAFSA Scholarships and grants not listed in gross income  Example – AmeriCorps, Fellowships, Assistantships Taking both tuition and fee deduction as well as one of the education tax credits

Step Four – Are Correction Required

 Determine if corrections are required  Data on the application agrees with verification documentation  Funds my be approved/disbursed based on valid ISIR  Application data does not agree with verification documentation  The EFC must be recalculated through corrections  School can perform the recalculation or require the student to submit the correction Note: The school/student must correct and submit for processing any errors reported on the original FAFSA that would change the EFC or that determine the students’ eligibility for aid.

Step Four - Submit Corrections

 Submit correction(s) through Central Processing System (CPS)

Step Four - ISIR Corrections

 Submit all changes utilizing the corrections tool on CPS main menu

Step Five – Update CampusVue

 Once verification complete update student record in CampusVue

Step Five – Update CampusVue

 Complete verification with CampusVue

Step Five – Update CampusVue

 Once student record updated on ISIR Verification screen within CampusVue the Financial Aid Packaging screen will update automatically

2014-15 Verification

 Verification Tracking Group Summary  Retained from 2013-14     V1 – Standard Verification Group V3 – Child Support Paid Verification Group V4 – Customized Verification Group V5 – Aggregate Verification Group  Eliminated  V2 – SNAP Verification Group  Added  V6 – Household Resources Verification Group 21

Verification Tracking Groups

 5 Verification Tracking Groups • V1, V3, V4, V5, V6 • Items to verify based on group

V1 - Standard

Tax Filers

   AGI  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 SNAP (Food Stamps) Child Support Paid Note: IRA Rollovers – Applicants are instructed to subtract rollover amounts from untaxed IRA distributions or untaxed pensions if an amount is present after IRS data is transferred

V1—Standard (cont.)

Non-Tax Filers

     Income Earned from Work Number of Household Members Number in College SNAP-Food Stamps Child Support Paid

V1 – Non-Tax Filers

 If an institution questions a claim that the tax filer is not required to file, must require applicant to submit a “Verification of Non-filing”  Obtained by the tax filer using IRS Form 4506-T and checking box 7  “Verification of Non-filing” for 2013 tax year not issued until after June 15, 2014

Number In Household – Dependent Student

 In addition to the student, the household size may include  Student’s parent(s)    Biological parent Adoptive parent Stepparent  Student’s siblings  Other individuals only if   They live with and receive more than half of their support from parent(s) Parent(s) will continue to provide more than half of their support during the award year

Number In Household – Dependent Student

 If biological or adoptive parents are separated or divorced, parent is: • Individual with whom the student lived more during 12 months prior to signing of FAFSA • If the student did not live with one parent more than the other, include the parent who provided the greater amount of support during the 12 months prior to signing the FAFSA or the most recent year in which support was provided  Include the stepparent in household size only if parent and stepparent were married on the date the FAFSA was signed

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Number In Household – Independent Student

Student’s spouse Student’s dependent children • Student’s dependent child need not live with student, but student must provide more than half the child’s support during the award year • Include student’s unborn child if student will provide more than half the child’s support from birth through the end of the award year • Foster children are never included in the household size Other individuals only if   They live with and receive more than half of their support from the student Student will continue to provide more than half of their support during the award year

Number In College

 Always include the student  Do not include the parent  Include household member if enrolled or accepted for enrollment when  At least half-time  Program leads to recognized educational credential  Eligible institution that is not a U.S. Service Academy

V3 – Child Support Paid

 Child Support Paid by:    The student and/or The student’s parent (dependent student) The student’s spouse (independent student)  Documentation  Signed Verification Worksheet  If you believe the information is inaccurate, student must provide the following   Copy of separation agreement or divorce decree that shows amount of child support to be provided Statement from person receiving the child support showing   Amount provided Copies of the child support checks/money order receipts

V4 - Custom

 HS Completion Status  Identity/Statement of Educational Purpose  SNAP  Child Support Paid

V5 - Aggregate

 HS Completion Status  Identity/Statement of Educational Purpose --AND  All items indicated->Tax Filer (V1)  All items indicated->Non-Tax Filer (V1)

V4 and V5 – High School Completion Status

 Documentation:  High school diploma; or   Final official high school transcript showing date diploma awarded; or “Secondary school leaving certificate’’ for students who completed secondary education in foreign country and unable to get copy of high school diploma/transcript Note: If, prior to being selected for verification, an institution already obtained HS completion status records for other purposes, the institution may rely on those records as long as it meets ED HS completion criteria

V4 and V5 – High School Completion Status

 Documentation: Recognized equivalent of a high school diploma   Copy of student’s General Educational Development (GED) certificate, an official GED transcript that indicates the student passed the exam, or a state authorized high school equivalent certificate; or Academic transcript of a student who has successfully completed at least a two-year program that is acceptable for full credit toward a bachelor's degree; or  Student excelled academically in HS and met all criteria to be admitted into a 2-year degree program or higher

V4 and V5 – High School Completion Status

 Documentation: Homeschooled  Transcript, or the equivalent, signed by the parent or guardian, that lists the secondary school courses completed by the applicant and documents the successful completion of a secondary school education; OR  A secondary school completion credential for home school provided for under State law

V4 and V5 – Identity/Statement of Educational Purpose

 Documentation: students that appear in person  Present to an institutionally authorized individual  A valid government-issued photo identification; AND  A signed statement of educational purpose  Provided by DOE, cannot be modified  Maintain an annotated copy of the identification:   The date documentation was received; and The name of the institutionally-authorized individual that obtained the documentation

V4 and V5 – Identity/Statement of Educational Purpose

 Documentation: student unable to appear in person  Must provide the institution—  A copy of a valid government-issued photo identification AND  An original, notarized statement of educational purpose signed by the applicant   Cannot be faxed or scanned After examining the original Statement of Educational Purpose for accuracy and completeness, the institution may convert it into an electronic record

V6 – Household Resources

  All items indicated-Tax Filer (V1); or All items indicated-Non-Tax Filer (V1); AND  Other untaxed income:         Untaxed Portions of IRA Distributions Untaxed Portions of Pensions IRA Deductions and Payments Tax Exempt Interest Income Other Untaxed Income on the 2014–15 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 non-education benefits (Questions 45h and 94h) Other untaxed income (Questions 45i and 94i) Money received or paid on the applicant’s behalf (Question 45j) Education Credits Supplemental Nutrition Assistance Program (SNAP–Food Stamps), if included on the ISIR Child Support Paid, if included on the ISIR

V6 – Household Resources

  Other Untaxed Income Documentation:   1. Signed statement listing – sources and amounts of income for tax year 2013 2. Copy of IRS W2s for sources of employment income received for tax year 2013 where applicable If school determines amounts provided do not appear to provide sufficient support for family members reported, the applicant (and parent/spouse) must:   Provide additional signed statement listing other resources used to support family (may include items not required to be reported on FAFSA) Explain how financially supported during 2013 calendar year

V6 – Household Resources

 Small number of students will be selected to verify household resources  V6 Verification Worksheet will be used to verify household resources  VWS collects more detailed information on Q45 and Q94 of the FAFSA  Comment section collects optional additional information related to student/parent situation  FAA will make the determination that the family had sufficient resources 40

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IRS Data Retrieval and Verification

An institution may consider information retrieved through the IRS data retrieval process as acceptable verification documentation if:    The Secretary has identified those items as having come from the IRS and The items have not been changed IRS Request Flag = 02 Items that may be verified      AGI U.S. income tax paid Untaxed IRA distributions Untaxed pensions Education credits   IRA deductions and payments Tax-exempt interest

IRS Data Retrieval

 IRS Data Retrieval Not Available When:         Student and/or parent did not indicate on the FAFSA that the tax return has been completed Marriage date is January 2013 or later First three digits of student and/or parents SSN are 666 Tax return was amended Student and/or parent filed a Puerto Rican or foreign tax return Student and/or parent is married and filed the tax return either as head of household or married but filing a separate return Neither married parent entered a valid SSN A non-married parent or both married parents entered all zeroes for the SSN

43

IRS Data Retrieval Tool

 IRS Request Flags

IRS Request Flag Blank Description

IRS Data Retrieval Tool not available

00 01 02 03 04 05 06

Student/Parent was ineligible to use the IRS Data Retrieval Tool Student/Parent was presented with the IRS Data Retrieval Tool and elected to use it, but did not transfer IRS data into the FAFSA IRS data was transferred and was not changed IRS data was transferred and changed IRS data was transferred and then changed on a subsequent transaction Student/Parent was presented with the IRS Data Retrieval Tool and elected not to use it IRS data was transferred, but a subsequent change made the student/parent ineligible to use the IRS Data Retrieval Tool

ISIR Request Flag

45

IRS Data Retrieval Tool

• • • Applicants selected for verification – V1-Standard Verification • • • Who transfer their income tax return information

unchanged

the Internal Revenue Service (IRS) Data Retrieval Tool – using When initially completing the FAFSA using FAFSA on the Web (FOTW) When making corrections on FOTW • • Are considered to have verified the FAFSA IRS information Adjusted Gross Income, taxes paid, and the applicable untaxed income items and education credits Unless changes were made to the transferred information or institution has reason to believe that the information transferred is inaccurate School

only needs to verify

# in HH and # in College

Verification – IRS DRT Usage Data

• • • Those using the DRT tend to be less likely to be selected for verification Among Pell eligible independent students, those not selected had an initial DRT usage rate of 71%, compared to just 49% of those selected After being selected for verification, however, the usage rate among those eligible to use the DRT increased by nearly 20 percentage points 46

Verification - Exclusions

 No verification required if –  Applicant is eligible to receive only unsubsidized aid  Applicant received no aid for reasons other than failure to complete verification  Transfer student already completed verification for the award year at a prior school  Current school must collect statement from prior school, providing transaction number of applicable ISIR  Current school must pay on verified transaction  Death of applicant

Verification - Exclusions

 Not required to verify FAFSA information for parents of dependent student or spouse of independent student if parents/spouse  Reside outside U.S. and cannot be contacted by normal means of communication  Cannot be located because contact information is unknown and cannot be obtained  Mentally incapacitated  Deceased (spouse)

Verification & Increasing Pell Eligibility

 No longer limits student to lesser Pell award if verification completed after enrollment  Student would receive Pell payment based upon correct EFC  Must have valid ISIR to support disbursements

Verification & Professional Judgment

 All applicants selected for verification (either by ED or school) must complete verification before any PJ adjustments to FAFSA  School’s written verification policies and procedures must include statement that no adjustments can be made until verification is completed  If applicant NOT selected for verification:  Verification NOT required  May perform PJ as usual

Verification Policies and Procedures

Must:  Be written  Address school options where flexibility exists  Be made clear to all students  Be consistently applied

Tracking and reporting the results of V4 and V5 for 2014/2015 to the Department of Education

V4 and V5 Tracking Results – 2014/2015

 Whom to report –  Student for whom school received an ISIR with a Verification Tracking Group of V4 or V5 AND  For whom school requested verification documentation Note: Do NOT include students the school selected for verification of identity or high school completion status

V4 and V5 Tracking Results – 2014/2015

 When to report  Beginning with the 2014-15 FAFSA processing year  On a regular basis with all reporting for 2014-2015 submitted within a short time after the end of the 2014 2015 award year  Future Federal Register Notice will provide specific deadlines to submit all documentation for 14/15

V4 and V5 Tracking Results – 2014/2015

How to Report: FAA Access to CPS Online updated to add “Identity Verification Results” to the home page

V4 and V5 Tracking Results – 2014/2015

  The FAA will enter SSN, Name ID (first two letters of the last name), and Verification Results from a dropdown menu on this page Click “Add SSNs” and enter additional ones Manual Entry Option

V4 and V5 Tracking Results – 2014/2015

 Dropdown options will be:      1 - Verification completed in person, no issues found 2 - Verification completed remotely, no issues found 3 - Verification attempted, issues found with identity 4 - Verification attempted, issues found with HS completion 5 - No response from applicant or unable to locate  If issues found with BOTH identity and HS completion, school will indicate issues found with identity (#3)

V4 and V5 Tracking Results – 2014/2015

FAAs will get a confirmation page with the results submitted and can print the page for their records  If a student’s results change after they have been submitted, the school would simply resubmit the student’s information

Verification Policy Reminders & Updates

2014/2015 – Transcripts Unavailable

 In instances where tax filer attempted to request a recent IRS Tax Return Transcript and was unsuccessful:  Signed copy of relevant 2013 IRS tax return AND  Communication from IRS stating request unsuccessful  Letter from IRS (SIGNED BY TAX FILER); or  Screen shot print (SIGNED /DATED BY TAX FILER) AND  Completed and signed IRS Form 4506 T-EZ or 4506-T listing institution as third party  Send to IRS only if doubt paper tax return accuracy

Amended Tax Returns

If the institution is aware that an amended tax return was filed, to complete verification, the applicant must submit —  Signed copy of the relevant tax return or IRS Tax Return Transcript AND  Signed copy of the 1040X that was filed with the IRS 61

Identity Theft for 2014-15

 Beginning with the 2013 tax year, a tax filer who is not able to request an IRS Tax Return Transcript because of identity theft, will be able to call a special IRS toll free number (1-800-908-4490)  Upon verification of identity, the tax filer can request the IRS provide a paper copy of an alternative document unique to identity theft issues (Tax Return Data Base View - TRDBV)  The TRDBV is an official transcript that can be submitted to the school to meet verification requirements DCL – GEN-14-05

Transcript Requests – 2014-2015

 Online IRS Transcript requests  Beginning with tax year 2013, once an online transcript request is validated, the IRS will return in real-time, a transcript in portable document format (pdf) through the new “Get Transcript Online” tool  Tax filer can print/save/forward pdf transcript as needed  Other Transcript Requests  Tax filers can submit requests via - IRS2GO mobile app, online “Get Transcript by Mail”, automated phone tool (1 800-908-9946), or paper Form 4506 or 4506-T  These request methods will result in a paper transcript DCL – GEN-14-05

Verification Resources

 Part of program integrity package  Notice of proposed rulemaking: June 18, 2010  http://edocket.access.gpo.gov/2010/pdf/2010-14107.pdf

 Final regulations: October 29, 2010  http://edocket.access.gpo.gov/2010/pdf/2010-26531.pdf

   FAFSA-IRS Tax Return Transcript Matrix  http://www.ifap.ed.gov/eannouncements/031612FAFSA1213VerificationIRSTa xReturnMatrix.html

2012-13 Application and Verification Guide  http://www.ifap.ed.gov/fsahandbook/attachments/1213AVG.pdf

GEN-12-07—Acceptable Documentation for Income and Taxes  http://www.ifap.ed.gov/dpcletters/attachments/GEN1207.pdf

Resources

 FSA Training Conference for Financial Aid Professional 2013 - Ginger Klock and Carney McCullough | U.S. Department of Education  Federal Update Part II 2014, KASFAA Annual Conference – David Bartnicki| U.S. Department of Education

Resources

   Federal Student Aid - The New Verification – PASFAA Conference – Ammmarie Weisman (October, 2012) Department of Education – Customized Verification 2013-14 and Beyond – Carney McCullough & Marilyn LeBlanc (2012) NASFAA Core 2013-14 – Verification Module 4 (2013)