Cathleen Wright Director of Financial Aid Texas Lutheran University

 Must have written policies and procedures on the following:  Deadlines for document submission and consequences of failure to meet those deadlines  Method of notifying students of award changes due to verification  Required correction procedures for students  Standard procedures for referring overpayment cases to the Department.

 Must give each applicant selected for verification a written statement explaining the following:  Documents required for verification  Student responsibilities Correction procedures Submission deadlines Consequences of missing deadlines  Notification methods How you will notify of award changes Time frame of notification

 Those selected by CPS  Those selected by School

 30% Verification Option – verify all CPS selected applicants up to 30% of the schools total federal aid applicants.  Applications the school selects or that have conflicting data do not count toward 30%  Incarceration  Recent Immigrant  Spouse unavailable  Parents unavailable

 Death of the student  Applicant verified by another school  Pacific Island resident  Not an aid recipient  Not eligible because of SAP  Withdrew before receiving aid

 Household Size  Number Enrolled in College  Adjusted Gross Income  U.S. Income Tax Paid  Certain Untaxed Income and Benefits Note: Schools may choose additional items.

 Verification worksheet  Don’t have to verify if:  Same as reported and verified in previous year  ISIR/SAR received within 90 days after application signed  For dependent student, household size for married parent is 3 or is 2 if parent is single, divorced, separated or widowed.  Household size for married independent student is two or is one if student is single, divorced, separated or widowed.

 Verification worksheet  Don’t have to verify if:  Only one in college  ISIR/SAR received within 90 days after application signed  The family members the student lists are enrolled at your school and you have confirmed their enrollment.

 Acceptable documentation:  Signed federal tax return  Tax transcript  Form W-2  Form 4868  Signed statement  Can accept copies, fax or digital images  Must be signed by at least one tax filer or have tax preparer information

 Must check tax returns for anyone reported on the FAFSA.  Type of form reported on FAFSA should match form filed.  AGI on FAFSA should match AGI on tax return unless:  You adjust for divorce, separation or professional judgment.

 Untaxed income – any income excluded from federal income tax  Must verify:  Child support  IRA/Keoug deductions  Interest on tax-free bonds  Any other untaxed income reported on the federal tax return.  Not required to verify any untaxed income or benefit received from a federal, state or local government agency that is based on need.

 Students selected for verification must complete it.  Have authority to withhold disbursements until verification completed. (recommended)  Interim disbursements  Pell Grant, Perkins and SEOG – can make one disbursement for the student’s first payment period.  FWS – can employ for up to 60 days  Stafford – can originate but not disburse

 $400 tolerance for dollar items  AGI + untaxed income – tax paid  No tolerance for non-dollar items

 Correction increases eligibility  If selected for verification - can disburse aid on original EFC until corrected ISIR received  If not selected for verification – do not disburse aid until corrected ISIR received  Correction decreases eligibility  If EFC decreases – must wait for corrected ISIR to be received to disburse aid.

 Cannot update income or asset information if accurate at time FAFSA was filed.  Must update household size, number in college and dependency status in certain circumstances  Dependency status – must update any time during award year unless changed because of a marital status change. Must be updated regardless of whether student selected for verification

 Household size and number in college  Cannot be updated unless student selected for verification  If selected for verification – must be updated to be correct at time of verification unless they changed due to change in marital status, in which case updating is not permitted.

 Obligated to know:  If student or parent was required to file a tax return  The correct filing status for the student or parent  That an individual cannot be claimed by more than one person. i.e. student cannot claim himself and also be claimed on parent tax return

 Must resolve conflicting information  Keep in mind that if have W-2s, must verify income from work on FAFSA or risk having unresolved conflicting information in the file  If income from work on tax return doesn’t match income from work on ISIR – must resolve  If have interest income on tax return but no assets – possible conflict – must resolve  If both parents filed Head of Household – must question whether that is correct filing status

 NPRM published in June 18, 2010 Federal Register  Selection for verification:  Removes 30% cap - must verify all selected apps  Eliminates certain exclusions: Pacific Island residents Incarcerated students Recent immigrants  Modifies exclusions for: Parent’s or spouse’s contact information unknown Parent or spouse is mentally incapacitated

 Verification items  Variable selection that corresponds to the most error-prone data elements for a particular student  Determined by ED and published in Federal Register each year  Eliminates the minimum five required data elements  Can accept tax data electronically loaded by IRS to FAFSA in lieu of tax returns  Require schools to verify ISIR before processing Special Condition/Professional Judgment changes

 No tolerance – must make all corrections  Must update student’s dependency status  Whether selected for verification or not  Includes changes in marital status  Allows schools to make interim aid disbursements as long as:  Verification is completed  Corrections have been submitted  Changes are not expected to affect eligibility

Questions?