2017–18 Verification A NASFAA Authorized Event Presented by Brandi Esuzor Financial Aid Systems Administrator Chattahoochee Technical College GASFAA Fall Workshop 10/5/2017

Lesson 1: Introduction to Verification

Verification Introduction The process used by the institution to check for accuracy of FAFSA data Reduce error rates in applicant-reported data Verification Insure eligible applicants receive correct amount of Title IV aid

Introduction Regulations define which applications, data elements, and documentation Verification applies to recipients of subsidized Title IV aid: Federal Pell Grant Federal Supplemental Educational Opportunity Grant (FSEOG) Federal Work-Study (FWS) Federal Perkins Loan Direct Subsidized Loans

Conflicting Information Must be resolved for all award years, even retroactively, unless: Student dies during the award year; or Conflicting data are received after the student is no longer enrolled at the school and does not intend to re-enroll

Central Processing System (CPS) Selection Process Applications can be selected by: Central Processing System (CPS) Institution OR

Verification Exclusions Verification not required under certain circumstances Entire application Spousal data Parental data Certain data elements Institutional exemption

Institutional exemption Exclusions Entire application Spousal data Parental data Certain data elements Institutional exemption Entire application excluded if student: Only eligible for unsubsidized Title IV aid (see exceptions) Transfers and was verified at another school Will not receive aid for reason other than failing to complete verification

Institutional exemption Exclusions Entire application Spousal data Parental data Certain data elements Institutional exemption Entire application excluded if student: Is selected for verification or changes verification tracking groups after ceasing to be enrolled at the school and all aid is paid Dies during the award year

Institutional exemption Exclusions Entire application Spousal data Parental data Certain data elements Institutional exemption Entire application NOT excluded if selected for: High school completion, and Identity/Statement of Educational Purpose NOTE: Student eligibility issues must be verified if selected in tracking group V4 or V5 while still enrolled

Institutional exemption Exclusions Entire application Spousal data Parental data Certain data elements Institutional exemption Parental data is excluded if both parents: Die, or the only parent on the FAFSA dies Are mentally incapacitated, or the only parent on the FAFSA is incapacitated

Institutional exemption Exclusions Entire application Spousal data Parental data Certain data elements Institutional exemption Parental data is excluded if both parents: Cannot be contacted and whereabouts are unknown Reside in a country other than the U.S. and cannot be contacted by normal means of communication

Institutional exemption Exclusions Entire application Spousal data Parental data Certain data elements Institutional exemption Spousal data excluded if applicant’s spouse: Is deceased or mentally incapacitated Cannot be located because contact information is unknown and cannot be obtained by the applicant

Institutional exemption Exclusions Entire application Spousal data Parental data Certain data elements Institutional exemption Spousal data excluded if applicant’s spouse: Is residing in a country other than the U.S. and cannot be contacted by normal means of communication

Institutional exemption Exclusions Entire application Spousal data Parental data Certain data elements Institutional exemption Number in dependent student’s household if: Parents are married and household size is 3 Parent is unmarried and household size is 2

Institutional exemption Exclusions Entire application Spousal data Parental data Certain data elements Institutional exemption Number in independent student’s household if: Student is married and household size is 2 Student is unmarried and household size is 1

Institutional exemption Exclusions Entire application Spousal data Parental data Certain data elements Institutional exemption Institution excluded (exempt) if a foreign school participating in Direct Student Loan program and not located in a state NOTE: Quality Assurance (QA) schools are no longer exempt from federal verification after 2016–17

Verification Selection Process Customized approach Varies from applicant-to-applicant May be information not used in expected family contribution (EFC) CPS FAFSA School

Verification Tracking Groups Standard Verification Group Custom Verification Group Aggregate Verification Group V1 V4 V5

Verification Tracking Groups Tax filer income information Nontax filer income information Household size Number in college V1

Verification Tracking Groups High school completion Identity and Statement of Educational Purpose V4

Verification Tracking Groups Tax filer income information Nontax filer income information Household size Number in college High school completion Identity and Statement of Educational Purpose V5

Automatic-Zero EFC Qualifiers Data Element to Verify (any tracking group)* Dependent Student’s Parent(s) Independent Student (and Spouse) Adjusted gross income Tax filers Income earned from work Nontax filers Household size No Yes High school completion, identity, and SEP V5 only * If applicant does not qualify for Automatic Zero EFC, update the application and verify remaining data elements applicable to tracking group.

Is ED’s customized approach to verification appropriate, or should all students who are selected for verification be required to verify all of the same data elements? Please explain why you feel this way. Does your institution verify data elements beyond those which are selected by the CPS? If so, for which data elements? What research does the institution do to justify the selection of each additional data element? Are there valid reasons for the selection? Page 11

Should your institution be selecting additional data elements (such as dependency status, assets, other real estate and investments, etc.) for verification? If so, which data elements and why? For 2017–18, ED eliminated federal verification of other untaxed income, indicating that historical data revealed no significant changes in expected family contributions (EFCs) as a result of verifying untaxed income. Do you agree? Why or why not? Do you have institutional data that conflict with ED’s findings? Page 12

Required Data Announced Annually Federal Register Dear Colleague Letter

General Documentation Requirements May file FAFSA using estimated data, but must complete verification on actually filed taxes Specified year equals prior-prior year (PPY) data for 2017–18 (i.e., 2015) Can use same 2016–17 documentation to verify certain 2017–18 data elements Tax data elements are verified if either 2016–17 or 2017–18 ISIR contains IRS Request Flag of “02”

General Documentation Requirements 2016–17 Documents AGI Income from work Taxes paid IRA distributions IRA deductions/payments Untaxed pensions Tax-exempt interest Education tax credits High school completion 2017–18 already verified

IRS DRT: Tax return type Tax filing status Exemptions claimed AGI Income from work Taxes paid Untaxed IRA distributions IRA deductions Untaxed pensions Tax-exempt interest Education tax credits

IRS DRT Cannot Be Used Tax return has not yet been filed Amended tax return filed Puerto Rican or foreign (non-U.S.) tax return filed Taxes filed electronically within last 3 weeks Taxes filed by mail within last 11 weeks Parents are unmarried and living together Change in marital status after end of tax year and before filing FAFSA

IRS DRT Cannot Be Used Married independent student and spouse filed separate tax returns Married parents filed separate tax returns Married and filed taxes as head of household First 3 digits of Social Security Number (SSN) are “666” for Pacific Islanders Neither married parent has a valid SSN Both parents entered all zeros for SSN

Tax Return Transcript Can be requested: IRS Get Transcript Online IRS Get Transcript by Mail 1.800.908.9946 Mail or fax IRS Form 4506-T or 4506T-EZ Income Verification Express Service

Acceptable Alternative Tax Transcripts Record of Account Transcript Tax Return Database View (TRDBV) Transcript Return Transcript for Taxpayer (RTFTP) Any IRS Tax Transcript with All Required Data

Verification Worksheets ED provides suggested text annually School may: Use ED’s suggested text or create its own Create a comprehensive worksheet or customize it according to selected data School must use ED’s Identity and Statement of Educational Purpose text as is

Acceptable Signature Formats “Wet” Photo-copied Faxed Electronic

AGI—Tax Filers Unaltered IRS DRT data Tax Return Transcript Acceptable alternative IRS tax transcripts Foreign tax returns U.S. Territory tax returns

AGI—Tax Filers

AGI—Tax Filers: Alternative Documents Tax return filing extensions Amended tax returns Tax account information cannot be located Inability to obtain a Tax Return Transcript

U.S. Income Tax Paid—Tax Filers Tax Return Transcript 1040 Transcript—Income Tax After Credits Per Computer minus Excess Advance Premium Tax Credit Repayment Amount 1040A Transcript—Tentative Tax Per Computer minus Total Credits Per Computer 1040EZ Transcript—Total Tax Liability TP Figures Per Computer minus Health Care: Individual Responsibility 1040 Line 56 minus Line 46 1040A Line 28 minus Line 36 1040EZ Line 10 FAFSA Student Question 37 Parent Question 86

Income Earned from Work—Nontax Filers U.S. individuals Statement or verification worksheet; Form W-2 from each employer; and IRS Verification of Nonfiling Letter Foreign residents Wage and Tax Statement or equivalent; Statement or verification worksheet; and Verification of Nonfiling from tax authority

Income Earned from Work—Nontax Filers Tax Return Transcript 1040 Transcript—Wages, Salaries, Tips, etc. + Business Income or Loss Sch. C Per Computer + Farm Income or Loss (Schedule F) Per Computer 1040A Transcript—Wages, Salaries, Tips, etc. + Business Income or Loss Sch. C Per Computer + Farm Income or Loss (Schedule F) Per Computer 1040EZ Transcript—Wages, Salaries, Tips, etc. 1040 Lines 7 + 12 + 18 + Schedule K-1, Box 14, Code A Form W-2, Box 1 1040A Line 7 1040EZ Line 1 FAFSA Student Questions 39 and 40 Parent Questions 88 and 89

Untaxed Income and Benefits—Tax Filers Untaxed portions of IRA distributions IRA deductions and payments Untaxed portions of pension/annuity distributions Tax-exempt interest income Education tax credits

Untaxed Income and Benefits—Tax Filers

Tax Filers—Untaxed Income and Benefits

Tax Filers—Untaxed Income and Benefits

Dependent Household Size Applicant Applicant’s parents living in household Parents’ other children (including graduate students but not foster children supported by another entity), if parents will provide more than half support from 7/1/17 through 6/30/18 Applicant’s children, if parents will provide more than half support from 7/1/17 through 6/30/18 Parents’ or applicant’s unborn child, if born before 6/30/18, and parents will provide more than half support from projected birth date to 6/30/18 Other persons living with and receiving more than half support from applicant’s parents from application to 6/30/18

Independent Household Size Applicant Applicant’s spouse living in household Applicant’s children (including graduate students but not foster children supported by another entity), if applicant will provide more than half support from 7/1/17 through 6/30/18 Applicant’s/spouse’s unborn child, if born before 6/30/18, and parents will provide more than half support from projected birth date to 6/30/18 Other persons living with and receiving more than half support from applicant from application through 6/30/18

High School Completion High school diploma always preferred Several types of documents can be used School may accept alternative documentation only when: Secondary school documentation is unavailable (e.g., closed school, deceased parent who provided home schooling) Foreign refugees, asylees, and victims of human trafficking who cannot obtain diploma or secondary school leaving certificate

Identity/Statement of Educational Purpose

Optional Institutionally Selected Data Assets Cash, savings, and checking Real estate and investments Other forms of untaxed income Untaxed Income Payments to tax-deferred pension and savings plans Child support received Housing, food, and other living allowances paid to members of the military, clergy, and others Veterans noneducation benefits Other untaxed income not reported elsewhere on FAFSA Money received or paid on student’s behalf

Optional Institutionally Selected Data Cannot include resources specifically excluded from need analysis, such as: Federal veteran’s educational benefits Military housing/housing allowance Combat pay Means-tested welfare benefits Foreign income exclusions School must decide what constitutes acceptable documentation Can be same as current or past ED requirements

Financial Aid Administrators and Tax Expertise Aid Administrator must know: Whether required to file a tax return Correct tax filing status for a tax filer Cannot be claimed as an exemption by more than one person

Verification Status Codes Verified Without documentation Selected/Not verified Not verified V W S Blank

Learning Activity: Required Verification Documentation Page 44

Learning Activity: Required Verification Documentation Review the case studies described on pages 44-46. In each case, determine what documentation must be collected to complete verification on federally selected applications, and what signatures are required, if any. Record your answers to the questions on pages 44-46.   Page 44

Learning Activity: Required Verification Documentation 1. Karl   What is the Verification Tracking Flag for this Tracking Group? _________ What documentation is federally required from Karl? V4 Copy of his high school diploma or final transcript that includes the date his diploma was awarded. Valid unexpired government-issued photo ID. Sign a Statement of Educational Purpose. Page 44

Learning Activity: Required Verification Documentation 1. Karl   What documentation is federally required from Rick? Which documents require Karl’s signature? Which documents require Rick’s signature? Rick does not need to provide any documentation. For 2017–18, child support paid is not included in Tracking Group V4. Karl needs to sign the Statement of Educational Purpose. Rick does not need to sign any of the documents. Page 44

Learning Activity: Required Verification Documentation 2. Lizzie   What is the Verification Tracking Flag for this Tracking Group? _________ What documentation is federally required from Lizzie? V1 Written statement or verification worksheet indicating: Names and ages of Lizzie, Carol, Tyreese, Mika, and Daryl, and their relationships to Lizzie. Name of the school Mika will attend during 2017–18. Page 45

   Learning Activity: Required Verification Documentation 2. Lizzie   Who must sign all of the documentation requested?  Yes  No Lizzie’s signature  Yes  No Carol’s and Tyreese’s signatures  Yes  No Carol’s or Tyreese’s signatures You have reason to believe the number in college may be inaccurate. What must you collect from Lizzie?    Documentation from Grove College that Mika will be enrolled at least half time in a program during 2017–18. Page 45

Learning Activity: Required Verification Documentation 3. Maggie   What is the Verification Tracking Flag for this Tracking Group? _________ What documentation is federally required? V1 From Maggie: Written statement or verification worksheet indicating she has not and is not required to file a tax return, and the source of her 2015 income. Verification of Nonfiling Letter dated on/after 10/1/16. W-2 from her employer. Page 46

Learning Activity: Required Verification Documentation 3. Maggie   What documentation is federally required? From Glenn: Tax return transcript to verify AGI, taxes paid, untaxed portions of IRA distributions or pensions, IRA deductions and payments, tax-exempt interest, and education tax credits. Page 46

   Learning Activity: Required Verification Documentation 3. Maggie   Who must sign all of the documentation requested?  Yes  No Maggie’s signature (worksheet)  Yes  No Glenn’s signature (worksheet)  Yes  No Both signatures (tax documentation) You learn Glenn filed an amended return for 2015. What must you collect from Maggie and/or Glenn?    Glenn must provide a copy of the IRS tax transcript (unsigned) and a signed copy of IRS Form 1040X. Page 46

Lesson 2: Changing Applicant Data

Corrections Correction Update Adjustment Changes to data that were incorrect when FAFSA was filed Update Changes to data correct when FAFSA was filed but later changed Adjustment Change made by aid administrator using professional judgment (PJ)

Corrections Data Correct as Reported Required CPS Reprocessing Optional CPS Reprocessing Disburse grants FWS employment may begin Originate and disburse loans Change in a single dollar item of $25 or more Any errors in nondollar items School may choose to submit all corrections to CPS

Quick Quiz 1: 1. What is a correction? 2. What makes a SAR or ISIR valid? 3. A school must submit corrections to the CPS for changes in a single dollar item of $25 or more.  True  False 4. How are overawards treated differently for the campus-based programs, compared to others such as the Federal Pell Grant Program? 5. What does Comment Code 399 indicate? Page 108

Learning Activity: Corrections Page 109

 Learning Activity: Corrections 1. Damaris is a dependent, second-year student. Before the FAFSA was filed, Damaris and her family moved. Since her FAFSA was a renewal, the old address carried over. She used the IRS Data Retrieval Tool successfully. She was selected for verification and is eligible for subsidized aid. The institution completed verification, but noticed on all of Damaris’ documentation, her address was different. She explained the circumstances. Is this correction:  Optional  Required  Page 109

 Learning Activity: Corrections 2. Timothy is in his last year of college. He has never been selected for verification—until now. This year, he is now Pell-eligible, despite the fact that 2015 tax and income information was used to complete both the 2016–17 and 2017–18 FAFSA. He initially reported four people in his household, but on the verification form, he reported seven. His family had been supporting his aunt and her two children since December of the prior year, after she lost her job and her apartment building was destroyed in a fire. Is this correction:  Optional  Required  Page 109

Updates Correction Update Adjustment Changes to data that were incorrect when FAFSA was filed Update Changes to data correct when FAFSA was filed but later changed Adjustment Change made by aid administrator using professional judgment (PJ)

Updates Dependency status (not due to student marital status change) Required anytime Household size/Number in college (not due to student marital status change) Required at verification Dependency/marital status Household size Number in college Optional anytime to address inequity/ability to pay

Quick Quiz 2: 1. An update is a change to data elements that were incorrect at the time the FAFSA was filed.  True  False 2. What items can be updated on the FAFSA under certain conditions? Page 113

Quick Quiz 2: 3. A school may allow an update to marital status under which of the following circumstances?  To address an inequity  To more accurately reflect the student’s ability to pay educational costs  For a student in special circumstances  For a dependent student’s parents after verification is completed in special circumstances 4. Household size and number in college may be updated only for applicants selected for verification.  True  False Page 113

Learning Activity: Can an Update Be Made? Page 114

 Learning Activity: Can an Update Be Made? 1. Jasmine was selected for verification. All necessary documentation was submitted and verification was completed. The next month, Jasmine’s mother goes to the courthouse to marry her longtime love. Can an update be made?  Yes  No Why or why not?  The change to marital status occurred after verification was complete. Page 114

 Learning Activity: Can an Update Be Made? 2. Desmond completed his undergraduate program at the end of the summer session in July. He is scheduled to begin his graduate program at the same institution in September. Summer marked the beginning of his institution’s academic year. Can an update be made?  Yes  No Why or why not?  As a graduate student, Desmond is no longer a dependent student and his dependency status must be updated to reflect this change. Page 114

 Learning Activity: Can an Update Be Made? 3. Tina is an incoming freshman with four people in her household—her mother, her father, and her twin sister Toya. Toya was going to work for a few years first, before college. Tina only included herself in the number in college. Tina’s FAFSA was selected for verification. Toya decided to attend the same college. Tina has not yet completed verification. Can an update be made?  Yes  No Why or why not?  Since Tina’s application was selected for verification, the number in college must be updated to reflect her sister’s plans. Page 114

How does your institution handle changes in dependency status How does your institution handle changes in dependency status? Do students self-report or do you flag changes on student ISIRs? Do you think it is fair that parental data associated with a change in marital status can only be updated if the dependent applicant is selected for verification? Why or why not? For what reason may you deny an update due to a change in an applicant’s marital status? Page 115

Professional Judgment Adjustments Correction Changes to data that were incorrect when FAFSA was filed Update Changes to data correct when FAFSA was filed but later changed Adjustment Change made by aid administrator using professional judgment (PJ)

Professional Judgment Adjustments Optional Discretion granted to financial aid administrators under section 479A(a) of Higher Education Act of 1965 (HEA), as amended Verification of specified-year data and resolution of conflicting information required before PJ

Divorce Unusual uncovered medical/dental expenses Loss of employment Extraordinary dependent care Secondary school tuition Unusual uncovered medical/dental expenses Parent/spouse death Divorce Possible Special Circumstances

Quick Quiz 3: 1. Financial aid administrators must use professional judgment for special circumstances.  True  False 2. If a student is selected for verification, the student must be __________ and any conflicting information __________ before professional judgment is performed. 3. Define specified year. Page 118

Quick Quiz 3: 4. The specified-year data for the 2017–18 award year is for ________.  2015  2016  2017 5. The institution is required to maintain documentation to substantiate any PJ decisions that are made.  True False Page 118

Quick Quiz 3: 6. The HEA identifies which of the following as examples of special circumstances for which the financial aid administrator may exercise PJ on a case-by-case basis?  Housing status that results in an individual being homeless  Unemployment of a family member or independent student  Medical expenses that are covered by insurance  Elementary and secondary school tuition expenses  Unusually high child care or dependent care costs  A student or family member who is a dislocated worker  The number of parents enrolled at least half time in a degree, certificate, or other program leading to a recognized educational credential at a Title IV-eligible institution Page 118

Learning Activity: Professional Judgment and Verification Page 119

 Learning Activity: Professional Judgment and Verification 1. During the verification process, Shruti, a first-year student, reveals that her mother is also enrolled half-time at the institution. Normally, parents are not included in the number in college. Can the institution use professional judgment to include Shruti’s mother in college? Can an update be made?  Yes  No  The parent may be included in the number in college if enrolled at least half-time in an eligible program at an eligible institution, if the financial aid administrator can document special circumstances warranting the adjustment. Page 119

 Learning Activity: Professional Judgment and Verification 2. Terrell, a third-year independent student, was selected for verification in the V1 verification tracking group. He used the IRS Data Retrieval Tool to transfer his 2015 income tax data. He lost his job at the local bottling plant in early 2016 and has been unable to find work since that time. Can the institution use professional judgment to account for Terrell’s loss of income? Can an update be made?  Yes  No  Loss of income can be accounted for using PJ based on the special circumstances surrounding Terrell’s unemployment. Page 119

 Learning Activity: Professional Judgment and Verification 3. After verification is complete, Chris speaks to his financial aid counselor regarding medical expenses his family has accumulated. The expenses were covered by insurance. Chris’ parents used a flexible spending account provided by an employer to cover the copays. Can the institution use professional judgment for their medical expenses? Can an update be made?  Yes  No  This is not a special circumstance, and PJ cannot be used to include expenses which are covered by another source such as insurance. Page 119

Why do you think PJ may be a good tool to use? Does your institution use PJ? If so, what circumstances does your institution consider for PJ? If not, why? Why do you think PJ may be a good tool to use? How do you think PJ may be used incorrectly? Why do you think there may be an increase in the use of PJ resulting from the use of prior-prior year (PPY) data? Page 120

Lesson 3: Disbursements, Timeframes, and Policies and Procedures

Interim Disbursements Conditions Prior to verification After verification, but prior to receipt of SAR/ISIR

Program-Specific Interim Disbursement Requirements One interim disbursement for first payment period only Federal Pell Grant, FSEOG, and Federal Perkins Loans Employ up to 60 consecutive days after student enrolls FWS

Program-Specific Interim Disbursement Requirements Originate, but not disburse Direct Subsidized Loans Not subject to interim disbursement rules Other disbursement rules apply Direct Unsubsidized Loans, PLUS, TEACH Grant, IASG

Student Deemed Ineligible for Interim Disbursement Disbursement becomes an overpayment if: Verification shows student was not eligible for those funds; Verification not completed before appropriate deadline; or School does not receive valid SAR or ISIR reflecting corrections within deadline specified in regulations

Ineligible for Interim Disbursement Attempt to resolve overpayment by: Applying $300 campus-based overaward tolerance Adjusting subsequent disbursements in award year Reimbursing Title IV program account by requiring student to return funds

Ineligible for Interim Disbursement If unable to resolve overpayment, the school: Is liable for the overpayment Must return funds to Title IV program account by earlier of 60 days after last day of attendance or award year Must reimburse FWS Program and pay student’s wages from institutional funds

Other Program-Specific Disbursement Requirements For unsubsidized-only aid recipients: Verification exclusion does not apply to high school completion, identity, or Statement of Educational Purpose in V4 or V5 Not required to verify other data elements if selected for V5 (income, household size, number in college)

Other Program-Specific Disbursement Requirements Cannot circumvent verification by requesting only unsubsidized aid If not making interim disbursements, and selected for verification: No further disbursements/FWS earnings can be paid until verification is completed Do not return previously disbursed funds while waiting to complete verification

Verification Never Completed for Tracking Group V1 Aid Program Disbursements/ FWS Earnings Pending Verification? School Returns Funds Already Disbursed? Student/Parent Returns Funds Already Disbursed? Title IV Grants No Yes Perkins Loans FWS Direct Subsidized Loans Direct Unsubsidized Loans and PLUS Yes, if verification delayed

Verification Never Completed for Tracking Group V4 or V5 Aid Program Disbursements/ FWS Earnings Pending Verification? School Returns Funds Already Disbursed? Student/Parent Returns Funds Already Disbursed? Title IV Grants No Yes Perkins Loans FWS Direct Subsidized Loans Direct Unsubsidized Loans and PLUS

Learning Activity: Interim Disbursements Page 142

Learning Activity: Interim Disbursements Amelia will be a first-year student at Big Sky University (BSU) in the fall of 2017. BSU’s goal is to notify incoming students of their financial aid awards by January 2. The financial aid office does not complete verification before awarding newly admitted students. Amelia’s parents separated in March 2017 and are in the middle of a contentious divorce. They both want custody of Amelia’s younger brother and disagree over how to pay for Amelia’s college education. As a result, the financial aid office was unable to complete verification before the fall semester started on September 7. Page 142

Learning Activity: Interim Disbursements Big Sky University tentatively awarded Amelia the following aid for the 2017–18 award year: Page 142

Learning Activity: Interim Disbursements 1. Under what conditions could BSU make interim disbursements to Amelia? 2. If BSU makes interim disbursements to Amelia, which Title IV funds could it disburse? BSU could make interim disbursements to Amelia if it has no conflicting information and has no reason to believe her application information is inaccurate. BSU could make interim disbursements of Federal Pell Grant, FSEOG, and FWS funds. Page 142

Learning Activity: Interim Disbursements 3. Amelia is anxious about earning some money to help cover personal expenses, so the financial aid office places her in a FWS position at the library. On what date will Amelia have to stop working through the FWS Program if BSU does not complete verification? If verification is not completed, Amelia will have to stop working through the FWS Program after November 5 (the 60th day of enrollment). Page 143

Learning Activity: Interim Disbursements 4. On September 22, Amelia sees her financial aid counselor. Amelia tells her counselor that she has decided to decline her Direct Subsidized Loan and would like to borrow a Direct Unsubsidized Loan instead, in case it takes her longer than anticipated to complete her bachelor’s degree. BSU has yet to complete verification. May Amelia borrow a Direct Unsubsidized Loan now? Why or why not? Amelia is not eligible to borrow a Direct Unsubsidized Loan. Because she potentially is eligible to receive need-based aid, Amelia cannot not circumvent the verification requirements by requesting to borrow only a Direct Unsubsidized Loan. Page 143

Do you think interim disbursements are a good idea? Why or why not? What issues should a school consider before making interim disbursements? Do you agree with the regulatory provision allowing schools to originate—but not disburse—a Direct Subsidized Loan before completing verification? Why or why not? Page 144

Verification and the Award Cycle Upon receipt of ISIR Before making tentative award After making tentative award, but before award confirmation After student accepts award, but before disbursement After interim disbursement, but before second disbursement

Verification Deadlines Federal Pell Grant deadline Institutional deadline Campus-Based and Direct Loan deadlines

Quick Quiz 2: 1. Define award cycle. 2. All schools must complete verification at the same point in the award process, as determined by ED each year.   True  False  3. Schools can complete verification:  When a student applies for admission  When a student’s application (SAR or ISIR) is received  At a time selected by the student  Before making a tentative award offer  After making a first—but before making a second—disbursement Page 147

Quick Quiz 2: 3. What happens if a student fails to submit required verification documents by an institution’s established deadline? 4. What documentation must the school have in its possession before the final ED-established award year processing deadline in order for a student to avoid forfeiting a Federal Pell Grant award due to verification being incomplete? Page 147

Learning Activity: Interview Page 148

Learning Activity: Interview 1. What is your institution’s deadline for submitting verification documentation? Are there different deadlines for different students? 2. Will your school award aid to an otherwise eligible student if he or she submits verification documentation after your school’s deadline? Why or why not? 3. How does your school publicize verification deadlines to students? Are these methods effective? Page 148

Verification Policies and Procedures Selection Procedures How are students selected Information Shared Documentation requirements Student responsibilities Document Submission Deadlines Consequences for noncompliance Post-Verification Process to correct data Outcome notification to student

Quick Quiz 3: 1. Define policy and procedure. 2. The verification regulations give schools some flexibility when establishing policies and procedures.   True  False  3. Schools are required to have verification policies and procedures addressing:  When documentation requirements may be waived  Selection procedures  Information shared with selected applicants  Applicant verification document submission  Post-verification procedures Page 151

Quick Quiz 3: 4. What information must an institution share with applicants selected for verification? 5. The school must send a written notification of the results of verification to applicants in a timely manner.  True  False  Page 151

Do you agree that institutions should have written verification policies and procedures? Why or why not? How does your financial aid office notify an applicant of the results of verification and any change to his or her EFC? How does your school define “a timely manner” for providing this notification? What additional policies and procedures should schools have for verification? Why? Page 152