1 Verification Fall 2008 NCASFAA Winston-Salem Emily Bliss and Kathy Fritz

2 Objectives Define verification Outline Federal Requirements Describe processing procedures Discuss how to submit corrections

3 What is Verification The process of checking information filed on the FAFSA against source documents

4 When to verify When selected by the CPS edits If QA school, your school determines student edits If you have questions regarding a student’s FAFSA information You are only required to verify 30% of the student aid application population Some schools verify 100%, it is not necessary

5 When Not to Verify Student is not selected, unless you have questions Death of a student Parents or spouse (if independent) unavailable Pacific Island resident Applicant verified by another school Student does not receive aid due to other ineligibility issues Student is incarcerated Student is a recent immigrant

6 Policy and Procedures A verification policy is required and must include: Deadlines for submission and consequences of failure to submit. A method of notifying students of award changes due to verification. Required correction procedures for students. Standard procedures for referring overpayment cases to the Department.

7 Policy and Procedures A written statement must be provided to the verified student explaining: Documents required for verification Student responsibilities Notification methods—how the school notifies a student if the award changes as a result of verification and the expected timeframe for such changes

8 Verification vs. Conflicting Information Verification includes specific elements Conflicting information is anything that does not agree Verification often brings to the surface conflicting information If over COA you do not have to verify or resolve conflicting information

9 Required Verification Elements AGI Taxes Paid Number in household/college Exemptions on tax returns Certain untaxed income and benefits Child support IRA deductions Social Security Benefits EIC

10 How to Process Create a certification worksheet Review procedures each year Include everyone who has a stake in it Check for any updates from NASFAA or the Department of Ed. Create your own or use the federal verification worksheet found at:

11 Required documents A copy of the student and/or parent’s signed Federal tax return in order to verify AGI, taxes paid, etc, credit for retirement contribution, education credit Note which form student or parent filed and if they were eligible to file that particular form. The form must be signed by either the filer or be stamped by the preparer along with their SSN or Preparer Tax ID Number. It must also contain the preparer’s name.

12 Required Documents Verification worksheets are not required but highly recommended. (personal note: I would not want to try to explain a verification without a worksheet) Signed statements are acceptable for many of the verification elements. All documentation must be signed, including any form of tax information submitted. Documents are submitted to the financial aid office, not the Department of Education.

13 Required Documents If no Federal Tax return is available the following may be used: Tax transcript ordered by calling the IRS at If no copy can be provided by the IRS, a W-2 may be used in addition to a signed statement by the filer certifying that the information is correct. If a family does not file, make sure they were not required to file. It cannot be their choice.

14 Non-Filers If a tax return was not required to be filed, only earned income should be reported. Earned income is not reported as untaxed income, it is reported as wages on the FAFSA. A signed statement or signed verification is accepted to verify income for students or parents who did not and were not required to file.

15 Now that you have the documents, what next? Match figures to the tax return to the FAFSA and resolve any discrepancies. Note differences on the verification worksheet. The parent or student is usually the party required to provide explanation for differences between source documents and the FAFSA.

16 Number in Household Dependent Students Student and Parents Include the parents, even if the student does not live with them Exclude appropriate parent if separated or divorced Include Step-parents Student’s siblings If over 50% of support is received from parents, they are included

17 Number in Household Dependent Students Unborn children can be included in household Foster children are not included in household size but neither is stipend for supporting foster children Usually, do not include graduate students as they are considered independent. Parents may verify they still provide half of the support. If so, they may be included

18 Number in Household Independent Students Independent Students Include student and spouse Student’s children If more than half of support is provided by the student during the academic year Unborn children Do not include foster children Other people If the student provides more than half of the support during the award year

19 Number in College Dependent Students Always include the applicant Parents are not included but may be added on a documented professional judgment Others considered as in the household, if they are enrolled at least half time in an eligible degree or certificate program Cannot include students enrolled at a military academy

20 Number in College Independent Students Always include the student applicant and Others they support who may be enrolled in an eligible degree or certificate program at a Title IV school. Do not include students enrolled at a U.S. military academy.

21 Your obligations To know whether a person is required to file a tax return Did they earn enough to require filing To know the correct filing status Head of household, married filing jointly, etc To know a person cannot be claimed as an exemption more than once. Keep a copy of IRS Publicaiton 17 next to you as well as a copy of the various filing guides for specific IRS tax forms during verification season and then use it.

22 Verification Tolerance If total change to dollar values is less than $400, then you do not have to send changes. There is no tolerance for errors in non- dollar items. This may be different if you are in the Quality Assurance Program.

23 How to Complete Check all required verification elements. Complete every block or line on verification certification worksheet. Update elements either using your software system or directly through the CPS.

24 Paying aid if verification not complete You can pay one disbursement of Pell, SEOG, and Perkins without completing verification. A student can work up to 60 consecutive days of FWS if verification has not been completed. You can certify and originate a loan but you cannot make any loan disbursements without a corrected ISIR.

25 Verification after Disbursements If a students is selected on a subsequent ISIR after awarding, you must complete the verification and make appropriate adjustments. This is a little easier to handle if you can convince the parents and student it was their mistake that caused the adjustment.

26 Verification Status Codes V = verified At UNCW, we change from S to V when we send the change but keep a hold on our packaging until the change comes back W= paid one disbursement without verification S = selected, not verified. This can happen if 30% had been reached, QA school, student not eligible

27 Quality Assurance If a school chooses to participate in the Quality Assurance Program, several steps must be taken. Schools determine their own verification edits. All verification corrections must be sent to CPS. Extra reports must be completed.

28 Resources FSA Handbook CFR IFAP.ed.gov