National Association of Student Financial Aid Administrators

The following is a presentation prepared for: MASFAA Indianapolis, IN October 6 -9, 2013

Eunice Powell – Senior Training Specialist Division of Training & Regulatory Assistance



IRS DRT Student FAFSA CPS School © 2013 NASFAA 3


Foreign Tax Return Amended Return Tax Transcript Identity Theft Tax Extension Number in College Household Size Student Child Support Paid SNAP IRS DRT FAFSA Name Change Statement of Educational Purpose Notary Public School High School Completion Home School Completion GED Doogie Howser?

V5 V1 V2 V3 V6 V4 CPS © 2013 NASFAA 4

Overview of Session

• Review verification tracking groups and changes for 2014 –15 • Address a variety of questions on verification topics • Discuss your institutions’ – Policies – Practices – Challenges – Success stories © 2013 NASFAA 5

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Verification Tracking Groups and Codes 2013 –14

V1 V2 V3 V4 V5

Standard SNAP Child Support Custom Aggregate

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2014–15 Tracking Groups and Codes

2013 –14 V1 V2 V3 V4 V5

Standard SNAP FSA Use Only Child Support Custom Aggregate Household Resources 2014 –15

V1 V2 V3 V4 V5 V6 © 2013 NASFAA 8

V6 Household Resources Tracking Group

Other Untaxed Income • Payments to tax-deferred pension and savings • Child support received • Housing, food, and other living allowances paid to members of the military, clergy, and others • Veterans noneducation benefits • Other untaxed income • Money received or paid on the applicant’s behalf © 2013 NASFAA 9

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Verifying Income

Tax Filers V1 V3 V4 V5 V6 Adjusted Gross Income (AGI) U.S. Income Tax Paid Untaxed portions of IRA distribution/ pensions IRA deductions and payments Tax exempt interest income Education credits Nontax Filers Income earned from work © 2013 NASFAA 11

Verifying Income

• Include income for both of student’s legal parents if parents live together – See GEN-13-12 • No information yet on verification impact of Supreme Court decision on Defense of Marriage Act (DOMA) – GEN-13-12: April 29, 2013 – GEN-13-16: June 13, 2013 – Supreme Court decision: June 26, 2013 V1 V3 V4 V5 V6 © 2013 NASFAA 12

Household Information

• Indicate household members enrolled at least half time in a Title IV-eligible program during award year, other than parents • Impact of GEN-13-12 on household size V1 V3 V4 V5 V6 © 2013 NASFAA 13

Household Information

• Household size not verified if – Independent student  Household size is one and applicant is single  Household size is two and applicant is married – Dependent student  Household size is two and parent is single  Household size is three and parents are married or unmarried and living together • Number in college not verified if “1” reported V1 V3 V4 V5 V6 © 2013 NASFAA 14

SNAP/Child Support Paid

• Verify for all tracking groups if SNAP or child support paid is included on ISIR • Although SNAP tracking group is removed, remains required verification item • An institution may accept records of electronic payments of child support paid • If no amount originally reported on FAFSA, update ISIR with corrected amount V1 V3 V4 V5 V6 © 2013 NASFAA 15

High School Completion

• May rely on document institution collects for admission or other purposes if the document: – Demonstrates high school completion (not 7 th semester transcript) – Is readily available • Foreign diploma or “Secondary school leaving certificate” for foreign students • Alternative documentation does not include self certified statement of completion V1 V3 V4 V5 V6 © 2013 NASFAA 16

Equivalent of High School Diploma

Submit documentation for 1 of the 4 following equivalents:

GED Certificate GED Transcript State Certificate

– Student passed a state authorized exam – State recognizes as equivalent of a high school diploma

Academic Transcript

– Student successfully completed two-year program acceptable for full credit toward bachelor’s degree V1 V3 V4 V5 V6 © 2013 NASFAA 17

Equivalent of High School Diploma

Student who excelled academically in high school, and: • Did not complete high school • Is enrolling in an associate or higher level program

Documentation From High School

- Student excelled academically

Institutional Documentation

- Student met school’s formal, written policy for admission V1 V3 V4 V5 V6 © 2013 NASFAA 18

Statement of Educational Purpose/Identity

• Present in person both: – Valid, government-issued photo identification – Signed statement • Notarized if unable to appear in person • Statement must use exact language issued by ED V1 V3 V4 V5 V6 © 2013 NASFAA 19


Submit either:

Transcript (or equivalent)

– Lists secondary school courses completed – Documents successful completion of a secondary school education – Signed by parent or guardian V1 V3 V4 V5 V6 © 2013 NASFAA

Secondary School Completion Credential

– Issued for home school – Recognized under state law 20

Statement of Educational Purpose/Identity

• Institution must authorize individuals who review identity documents • Include authorized individuals in policies and procedures • Maintain annotated copy of ID document – Date identification received – Name of individual who received ID V1 V3 V4 V5 V6 © 2013 NASFAA 21

Statement of Educational Purpose/Identity

Report “Identity Verification Results” for all applicants contacted to verify identity and high school completion • Verification completed in person, no issues found • Verification completed remotely, no issues found • Verification attempted, issues found with identity • Verification attempted, issues found with high school completion • No response from applicant V1 V3 V4 V5 V6 © 2013 NASFAA 22

Untaxed Income

• V6 Household Resources Verification Tracking Group • Untaxed income items not on IRS tax return • V6 must also verify: – Income – Household size / number in college – SNAP, if reported on FAFSA – Child support paid, if reported on FAFSA V1 V3 V4 V5 V6 © 2013 NASFAA 23

Untaxed Income

If combined income sources appear too low to financially support family: • Contact student or parent to request sources and amounts of financial support received during 2013 calendar year • ED will provide suggested text • Correct for additional income, if any, identified during process V1 V3 V4 V5 V6 © 2013 NASFAA 24

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Must we complete verification for a student receiving only a Direct Unsubsidized Loan?

• No, unless the student is eligible for need-based aid but has declined it, or later becomes eligible for need-based aid • Strongly encouraged to verify high school completion status and identity/statement of educational purpose for V4, V5 applicants © 2013 NASFAA 26

For institutionally selected students, must we request the same documents specified by ED?

• Institution can determine what elements to verify and what documentation to accept for applicants it selects – If CPS selects applicant on a subsequent ISIR, institution must collect required documentation • Quality Assurance (QA) institutions are exempt from verification rules • Corrections must be sent to CPS © 2013 NASFAA 27

What are we supposed to verify for Automatic Zero EFC students?

• Minimal requirements for V1 and V5 • Dependent students – Parents’ AGI if tax filer – Parents’ income earned from work if nontax filer – Receipt of SNAP if auto zero based on SNAP • Independent students – AGI if tax filer – Income earned from work if nontax filer – Number of household members – Receipt of SNAP if auto zero based on SNAP © 2013 NASFAA 28

What are we supposed to verify for Automatic Zero EFC students?

• Must verify high school completion status and identity/statement of educational purpose for V4, V5 • Must also verify SNAP and child support paid, if reported on ISIR • Untaxed income verification for V6 pending ED guidance • (This guidance applies to 2013–14, ED has not yet released official 2014 –15 guidance) © 2013 NASFAA 29

How do we identify and handle IRS rollovers of IRA’s, pensions, or annuities?

• Untaxed portion of IRS distribution on ISIR


indicate rollover, or actual distribution • Additional documentation needed from tax filer to identify IRS rollover – Signed statement, or – Signed, dated IRS Tax Return Transcript with “Rollover” noted beside applicable item(s) • Considered a correction, not PJ © 2013 NASFAA 30

Are we supposed to use text provided by ED for verification requests?

• Suggested text provided in lieu of verification worksheets • Must use exact wording for Statement of Educational Purpose • All other examples are suggestions • ED will provide suggested text for new V6 verification tracking group (untaxed income) © 2013 NASFAA 31

Can we update a student’s marital status change only during verification?

An institution

may require

an applicant to update dependency status at any time during the award year due to a marital status change • To address an inequity or to reflect more accurately the applicant’s ability to pay • The applicant need not have been selected for verification • Other items must also be updated to reflect the marital status change (household size, number in college, spouse’s income, etc.), which may require verification © 2013 NASFAA 32

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Please send your questions to: [email protected]

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