Transcript Slide 1

KASFAA
Spring 2007 Conference
Bowling Green, KY
April 11-13, 2007
Removing the Mask from
Verification
Presented by:
Victoria Owens
Director of Student Financial Aid
Jefferson Community & Technical College
Louisville, KY
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
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:
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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
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
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
Verification Options
• 30% Option
– School must verify all CPS-selected
verifications up to 30% of the school’s total
number of federal aid applicants.
– School-selected do not count
– Conflicting information corrections do not
count
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)
Acceptable Documentation
from 2007-2008 Federal Student Aid Handbook
US 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.
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.
Acceptable Documentation
- Number Enrolled in College
Must 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 school’s records.
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 provider’s format
– IRS Form 8453 does NOT have enough information &
cannot be used for verification
• Document must have signatures (or preparer’s
stamp or other official validation)
• Must be complete and legible
Acceptable Documentation
- Income Earned from Work (Non-filers)
• Individual’s 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
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 individual’s correct filing status
Reference: IRS Publication 17, 501, or 570
Acceptable Documentation
from 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.
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.
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)
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)
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 student’s 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.
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 applicant’s
marital status change.
• Adjustments- change made by aid administrator
using professional judgment.
Answer to Question
from 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]
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