1098-T Reporting: Reaping the Benefits Derrick Shy, Senior Account Executive Campus Payment Solutions, Sallie Mae Randy Schenewerk, Associate Controller Columbia College

The Form… What is Form 1098-T? IRS Form 1098-T summarizes tuition-related, personal and miscellaneous financial information for each student enrolled at a higher education institution The Taxpayer Relief Act of 1997 mandates that all schools mail IRS Form 1098-T to their enrolled students (at least they did…more on this later) “Informational only” form for the student/taxpayer – Serves as alert to student of possible tax credit eligibility – Contains pertinent TIN, enrollment and academic status, etc. – Additional information required of taxpayer claiming credit(s), which are optional credits

1098-T Template Screenshot

The Example School… Columbia College ~ Columbia, MO – Datatel School – Traditional Day Campus – Evening, Grad and Online (and the funding and reporting challenges that come with…) – Issue over 25,000 forms annually, and growing

The Data… “Home” of source data varies by school/ERP – What to include: Tuition, Fees – Box 1 vs. Box 2 Enrollment Status Registration for subsequent academic year Scholarships/Grants – IRS Changes and their impact – ERP Changes and their impact – TEST, TEST, TEST

The Costs… Forms Postage (initial mailing, address corrections/returns, re-issue requests Processing (internal and external) Oops! (Now the forms are REALLY expensive!)

The Challenges… Many forms = Many touches Storage, before and after January 31st Many undeliverable Many programs/student types Never an issue, Always the fear Nastygrams

Saving Grace… New Electronic Reporting Solutions Still have paper, but A LOT LESS! No Re-issues!

Updates and Changes Truncating Identifying Numbers: IRS pilot program for truncating student SS numbers (paper only) has been extended through tax years 2011 and 2012; full SSN must be displayed on electronic versions however Global Consent Forms: If your institution captures a “global” consent form from students for campus business functions (billing, etc.), 1098-T forms can be included

Industry Trends & Impacts Shifting of student needs and expectations: Student populations are increasing Staff reductions due to budget cuts Stricter compliance requirements Higher security risks Emphasis on “going green”

1098-T Processing Service – To Outsource or Not? Benefits to students: Provide access to view and print forms online Store forms for the time students are in school for easy access and printing anytime Quickly resolve questions through online or phone support Notify of 1098-T availability via custom messages and alerts

1098-T Processing Service – To Outsource or Not? Benefits to schools: Saves time, money and resources Helps ensure the confidentiality and integrity of student data Reduces inbound calls to the office for information needs Eliminates need to interface with the IRS—service provider should report to the IRS, as required, on the school’s behalf 12

1098-T Processing Service – To Outsource or Not? Benefits to Schools (Cont): Once the required file is sent, the following services can be provided: Print and mail 1098-T Tax Forms Provide a CD of printed 1098-T Tax forms to the client Present 1098-T Tax Forms online to students Present 1098-T Tax Forms via reporting tool for administrative staff Manage Electronic Consent Process If outsourcing, your provider should handle the online consent process on your behalf

1098-T Processing Service – To Outsource or Not? Benefits to Schools (Cont): Sallie Mae advises clients that students have until January 10th to opt in to the electronic version but this may vary depending on your provider

1098-T Application within Full Service Platform 15 Confidential and proprietary information © 2011 Sallie Mae, Inc. All rights reserved

Questions ?