AASFAA Fall Conference 2016 Verification and Conflicting Information with PPY

Verification Vs. Conflicting Information The process used by the institution to check the accuracy of the information the student, and parent if a dependent student, provided when applying for Title IV aid. Information is verified by obtaining documentation or, in some cases, a signed statement attesting to the accuracy of the information Resolving Conflicting Information The process of ensuring the consistency of information related to the student’s application throughout the institution. All conflicting information must be reconciled before disbursing any Title IV aid.

17-18 - Prior-Prior Year Begins

PPY and Its Affects Income information collected on the FAFSA will be from one year earlier than what was previously collected – this is sometimes called “Prior Prior Year” or PPY information. Because of this switch in the income information year, students are able to apply for the FAFSA earlier than previously allowed. Below is a table providing the summary of key dates as we transition to using the early FAFSA submission timeframe and earlier income information.

Verification Tracking Groups 2016-2017 Standard (V1) Custom (V4) Aggregate (V5) Household Resources (V6) 2017-2018 Standard (V1) Custom (V4) Aggregate (V5) V6 Eliminated in the 17-18 year

Changes in 17-18 If nontax filer and selected for verification, must get confirmation of non-filing status from IRS (can be obtained from IRS by using Form 4506-T and checking box 7) SNAP and Child Support Paid removed from V1, V4, and V5 Elimination of V6 Tracking Group GEN 16-07 (Publication Date: April 5, 2016)

Verification Notes Income information used for verification on the 16-17 FAFSA may be used to satisfy 17- 18 verification; HOWEVER, schools must obtain new documentation each award year for the number of household members, number in college, and identity and statement of educational purpose Military members unable to obtain a copy of their high school diploma or transcript may use their DD214 as an alternate means to verify their high school completion status

Verification Notes In 16-17, CPS may move applicants from previously assigned Verification Tracking Groups V1, V4, and V6 to Verification Tracking Group V5 based on corrections made to the applicants record or other information available to FSA Right now this is expected to be practice in the 17-18 year as well with the exception of the V6 group that is eliminated in 17-18 Expected to be minimal

Amended Tax Return – 1040X It is NASFAA’s understanding that you cannot automatically use line 8 from the IRS Form 1040X for the amount of income tax paid when completing the verification. You first must check whether line 15 of the 1040X shows an amount for an excess advance premium tax credit repayment. If the tax filer is claiming an excess advance premium tax credit repayment on the amended return, the box for IRS Form 8962 on line 15 will be checked and Form 8962 should be attached to the amended return.

Amended Tax Return Continued If the filer is not claiming an excess advance premium tax credit repayment on the amended return, you may use the amount on line 8 of the amended return for the amount of the taxes paid. However, if the filer is claiming an excess advance premium tax credit repayment on the amended return, you must reduce the amount of taxes paid on line 8 of the amended return by the amount of the excess advance premium tax credit repayment that is reported on line 29 of Form 8962. From NASFAA AskRegs Knowledgebase – NASFAA News 8/15/16

Conflicting Information: GEN16-14 When 2016-2017 and 2017-2018 FAFSAs conflict, ED determines whether potential change in EFC is significant and flags 2017- 2018 with C code and comment code 399 for resolution by school, UNLESS Student is not expected to be Pell Grant eligible in 17-18 Professional Judgment was exercised in either year Dependency status changed Student or parent marital status changed

Conflicting Information: GEN16-14 Only aid applicants with the 399 code on the 2017-2018 ISIR require resolution for cross- year conflicting information Only the 2017-2018 ISIR will carry code 399 Other rules for verification and resolution of other conflicting information are unchanged and must be observed for all applicants

Conflicting Information: GEN16-14 If 2017-2018 ISIR is flagged with code 399, school is not required to resolve conflicts if the school: Never received a 2016-2017 ISIR (i.e., CPS did not provide one to the school’s SAIG mailbox); OR Did not and will not disburse Title IV aid based on either of the ISIRs

Conflicting Information: GEN16-14 If 2017-2018 ISIR is flagged with code 399, school must resolve conflict if school: Received a 2016-2017 ISIR and disbursed, or may disburse, aid based on that 2016-2017 ISIR (regardless of whether school will disburse aid for 2017-2018); OR Received a 2016-2017 ISIR but did not review or process that ISIR (resolution might still affect 2017- 2018 eligibility)

Resolution: GEN 16-14 If either FAFSA used IRS-DRT, that is presumed the correct data unless subsequently changed If data was already verified in either award year, verified data is considered correct and can use this information to submit any needed corrections Exception: amended tax return was filed subsequent to IRS download or verification In all other instances, school will likely need to collect documentation to resolve conflicts

Example 1 Institution receives 2016-2017 ISIR for student Student never attends and no record created in institution’s financial aid management system ISIR goes to “holding” or “staging” table in financial aid system Institution receives 2017-2018 ISIR for student flagged with comment 399 & C code Institution processes 2017-2018 aid; intends to disburse

Example 1 Must the institution resolve the conflicting data? Yes, and must adjust 2017-2018 aid accordingly

Example 1: CAUTION! Be sure to put a process into place to ensure that 2016-2017 ISIRs in staging or holding tables are not overlooked, OR Establish a policy to resolve conflicts for every 2017-2018 ISIR with comment 399, regardless of 2016-2017 ISIR receipt status

Example 2 Student files 2017-2018 FAFSA in December 2016 Institution awards 2017-2018 aid in February 2017 Student files 2016-2017 FAFSA in May 2017 Intends to enroll Summer 2017 (16-17 trailer) A subsequent 2017-2018 ISIR transaction with comment 399 and C code is generated due to new conflict arising out of the new 2016-2017 FAFSA filing

Example 2 Must the institution resolve the conflicting data? Yes, and must adjust aid for both award years

Example 2: CAUTION! Some institutional processes might not catch the subsequent 2017-2018 ISIR with the new C code until it holds up disbursement for the fall But, the institution has awarded and disbursed 2016-2017 aid in the summer without resolving the conflict as required Be sure to have a process in place that identifies new 2017-2018 ISIRs with comment 399 as they come in and checks whether 2016-2017 aid was disbursed or may be disbursed

Example 3 Institution receives ISIR for 2016-2017; awards and disburses aid Student files 2017-2018 FAFSA in October 2017; ISIR generated with comment 399 and C code

Example 3 Must the institution resolve the conflicting data? Yes, prior to disbursing and 2017-2018 aid No resolution is required for 2016-2017 because it is past the last date to submit ISIR corrections for that award year (Sept 9, 2017)

Example 3: CAUTION! Be sure that all 2017-2018 ISIRs with comment 399 and C code that are received prior to September 9, 2017, have all conflicting data resolved and corrections are submitted (main concern in submitting corrections is with 16-17 because of deadline) NASFAA is seeking clarification for ISIRs received very close to this deadline

Example 4 Student receives aid from institution in 2016- 2017 Student files 2017-2018 FAFSA in May 2017, which is flagged with comment 399 and C code Institution reaches out to student to provide documentation to resolve conflict Student does not respond to request/does not adequately explain the reason for the conflict

Example 4 What must the institution do? Institution must treat 2016-2017 aid as an overaward Institution may not disburse future 2016- 2017 aid Institution may not disburse 2017-2018 aid Institution must cease paying student out of FWS funds immediately

Resolving Conflicting Data: GEN16-14 If the required correction is to the 2017- 2018 record, the institution must correct the 2017-2018 ISIR and use the corrected EFC for awarding and disbursing all Title IV aid for 2017-2018 If the required correction is to the 2016- 2017 record, the institution must correct the 2016-2017 ISIR and ensure that the student’s awards and disbursements for 2016-2017 are based on the correct EFC Exception: 2016-2017 records cannot be corrected after September 9, 2017

Resolving Conflicting Data: GEN 16-14 If in either year aid was disbursed on an incorrect EFC that was lower than the correct EFC, the student is considered overawarded If the school is unable to resolve the conflicting information (student did not respond to the institution’s request for information or student did not adequately clarify the reasons for the conflicting information): Student is considered to be overawarded for any need- based 2016-2017 Title IV aid that was disbursed, and Student must cease earning FWS immediately

Resolving Overawards: GEN 16-14 Student is liable for overpayments Even if aid was used to pay institutional charges, school is not financially liable for any repayment based upon the resolution of conflicting information Overawarded Direct Subsidized Loans are repaid under promissory note (like R2T4)

From GEN 16-14 Strike in 3rd row, 3rd column based on AskRegs posted in NASFAA News on 10/3/16 which supersedes GEN 16-14

Information from the FAQ September 29, 2016 the White House announced that 17-18 Pell Charts will be released in mid- October; date for campus-based aid is based on Congressional action and may not be released until February. 2017-2018 EFC calculation will use updated need analysis tables. Those tables have now been published. COD functionality will not be available for 2017- 2018 award originations until March 2017 IRS DRT will be available on October 1, 2016

Information from the FAQ 2017-2018 FAFSA will not pre-populate income information on a renewal application. The Department of Education will not release the “threshold” amount at which they will flag a student with comment code 399. Any student with a comment code 399 must have conflicting information resolved even if they are not selected for verification. All conflicting information must be resolved before institutions complete a PJ.

Information from NASFAA Q&As Comment Code 399 will only appear on 2017-2018 ISIRs. NASFAA has confirmed with ED that if corrections are made to the 17-18 ISIR to resolve the cross-year conflict, a new 17-18 ISIR will be generated with both the C flag and comment code 399 removed. If corrections are made only to the 16-17 ISIR to resolve conflict, however, a new 17-18 ISIR will not be generated.

Information from NASFAA Q&As “Income data” refers to the untaxed income reported by students/parents as well. If these do not match that could be one cause of the comment code 399. Asset changes would not cause the comment code 399 as those change as of the date the FAFSA is filed. Foreign institutions are required to resolve cross-year conflicting data for ISIRs with comment 399.

Information from NASFA Q&As No 17-18 ISIR will be pushed if a student files a 16-17 ISIR AFTER filing a 17-18 FAFSA; comparison of data occurs only at the point a 17-18 application is filed or corrected. Since the 17-18 ISIR will not be flagged with comment 399, no resolution is required. However, if a school does receive a subsequent 17-18 ISIR with comment 399 as a result of other activity, it must resolve cross-year conflicting data at that point. Also, all other normal conflicting data rules apply.

Information from NASFA Q&As ISIR comment codes 035 and 036 have been revised for 17-18 to indicate parental income or income tax paid conflict with the 16-17 FAFSA, and ISIR comments 395-398 have been added to indicate that student income or income tax paid conflict with the 16-17 FAFSA. Early FAFSA Electronic Announcement #4 lists the FAFSA questions that must be completed using 2015 tax data and consequently, are the data items that could potentially conflict across years. To determine exactly which data item(s) conflict, institutions would need to compare the 16-17 and 17-18 ISIRs.

Information from NASFA Q&As The institution would not be required to reverse a prior PJ decision to resolve conflicting data, nor should the FAA carry forward a previous year’s PJ adjustment without ascertaining that mitigating circumstances applicable to the new year exist. If verification was used in the 16-17 year using extension information, but in the 17-18 year the 2015 tax return information is available, institutions should use that data to resolve cross-year conflicting data.

Information from NASFA Q&As NASFAA is awaiting confirmation from ED that the institution does not correct 2016-2017 ISIR data if resolution shows it to be incorrect, but the student did not attend that particular school in 2016-2017

Resources From IFAP – Early FAFSA Information Page February 11, 2016 (GEN-16-03): ED reminds FAAs of PJ basics in context of PPY February 18, 2016 (EF EA #2): ED urges early awards, acknowledges possible conflicting information, urges use of IRS-DRT for both years to either complete or correct March 18, 2016 (EF EA #4): Chart showing year used for data elements April 12, 2016 (EF EA #5): ED begins publishing FAQs in IFAP

Resources August 3, 2016 (GEN-16-14): Identification & resolution of conflicting information August 10, 2016: Letter from ED Undersecretary Ted Mitchell urging schools to award early but not move up deadlines August 31, 2016: NASFAA’s Prior-Prior Year: Understanding the Treatment of Conflicting Information Webinar (Q&As now released) NASFAA tools at www.NASFAA.org/PPY_toolkit

For Any Questions You can email EarlyFAFSAFeedback@ed.gov You will usually not get a direct response from this email, but your question will be added to the FAQs on IFAP

Contact Information Jennifer Williams Southern Arkansas University Tech jwilliam@sautech.edu 870-574-4499 Thank you for attending!