1. National Association of Student Financial Aid Administrators Presents … © 2015 NASFAA Verification Module 4

2. Slide 4-2 © 2015 NASFAA Verification Process of verifying accuracy of Free Application for Federal Student Aid (FAFSA) data Regulations define: –Whose application must be verified –FAFSA information to be verified –Documentation used to verify data elements Regardless of verification selection, must always resolve discrepancies and conflicting information

3. Slide 4-3 © 2015 NASFAA Module Topics Whose application must be verified Quality Assurance (QA) Program requirements Verification tracking groups and FAFSA information to be verified Acceptable documentation Data element corrections

4. Slide 4-4 © 2015 NASFAA Data element updates Verification status codes Interim disbursements Verification time frames Policies and procedures Module Topics

5. Slide 4-5 © 2015 NASFAA Verification Selection Process Customized approach Data elements selected each award year FAFSA information that must be verified: –Will vary from applicant-to-applicant –May be information that is not used in calculating applicant’s expected family contribution (EFC)

6. Slide 4-6 © 2015 NASFAA Required Verification Data Items Adjusted gross income (AGI)—tax filers Income earned from work—nontax filers U.S. income tax paid

7. Slide 4-7 © 2015 NASFAA Required Verification Data Items Untaxed income from tax return—tax filers –Individual Retirement Account (IRA) untaxed distributions, deductions, and payments –Untaxed portions of pension and annuity distributions –Tax-exempt interest income –Education tax credits (American Opportunity Tax Credit and Lifetime Learning Tax Credit)

8. Slide 4-8 © 2015 NASFAA Required Verification Data Items Other untaxed income from FAFSA –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 –Money received or paid on the student’s behalf Resources or benefits not reported on FAFSA

9. Slide 4-9 © 2015 NASFAA Required Verification Data Items Supplemental Nutrition Assistance Program (SNAP) benefits Child support paid Household size Number in college High school completion status Identity/Statement of Educational Purpose

10. Slide 4-10 © 2015 NASFAA Verification Tracking Groups For 2015–16, Central Processing System (CPS)-selected applicants are assigned to one of five verification tracking groups Each tracking group determines items to be verified and required documentation

11. Slide 4-11 © 2015 NASFAA Items Verified Using Internal Revenue Service Data Retrieval Tool (DRT) or Tax Transcript AGI U.S. income tax paid Untaxed portions of IRA distributions IRA deductions and payments Untaxed pension and annuity distributions Tax-exempt interest income Education tax credits

12. Slide 4-12 © 2015 NASFAA Documentation and Signature Requirements

13. Slide 4-13 © 2015 NASFAA Verification of Foreign Income Foreign income must be included on FAFSA, even if it cannot be taken out of the country in which it was earned Earned foreign income and taxes paid to a central foreign government are treated in same manner as U.S. income and taxes paid A foreign tax return is considered equivalent to IRS Form 1040

14. Slide 4-14 © 2015 NASFAA Alternative Documentation Cases Tax extensions Amended tax returns Government cannot locate tax account information Residents of Republic of the Marshall Islands, Federated States of Micronesia, and Palau Inability to obtain a tax return transcript Separating income on joint tax returns

15. Slide 4-15 © 2015 NASFAA Changes to data elements that were incorrect at time of application If data are correct as reported and valid Institutional Student Information Record (ISIR) or Student Aid Report (SAR): –Pay Federal Pell Grant, Iraq and Afghanistan Service Grant (IASG), Federal Supplemental Educational Opportunity Grant (FSEOG), Teacher Education Assistance for College and Higher Education (TEACH) Grant, and Federal Perkins Loan Verification Corrections

16. Slide 4-16 © 2015 NASFAA Verification Corrections If data correct as reported and valid ISIR/SAR: –Employ students under Federal Work-Study (FWS) –Originate and disburse Federal Direct Student Loans (Direct Loans)

17. Slide 4-17 © 2015 NASFAA Verification Updates Number in household and number in college: If not selected, cannot update for changes occurring after original application filed If not selected, institution is not required to monitor data element changes Institution may select applicants if it believes data elements are inaccurate

18. Slide 4-18 © 2015 NASFAA May require student to update dependency status, household size, or number in college if change results from change in student’s marital status Must update household size if dependent student’s parent remarries after application, but before verification Verification Updates

19. Slide 4-19 © 2015 NASFAA Must: Be written Address school options where flexibility exists Be made clear to all students Be consistently applied Verification Policies and Procedures

20. Slide 4-20 © 2015 NASFAA