1. Verification 101 Debbie Forrester-Elmhurst College
2018 ILASFAA Conference Saving the Day with Financial Aid
April 16-18, 2018

2. The Basics 2018 ILASFAA Conference Saving the Day with Financial Aid
April 16-18, 2018

3. Agenda

4. Agenda What is verification and Why do we do it?
Exclusions to verification
Tracking groups
Items to be verified
Acceptable Documentation
Corrections, Updates, Adjustments
Verification Deadlines

5. Acronyms

6. FAFSA-Free Application for Federal Student Aid
ISIR-Institutional Student Information Record
SAR- Student Aid Report
EFC-Expected Family Contribution
CPS-Central Processing System

7. IFAP-Information for Financial Aid Professionals
NSLDS-National Student Loan Data System
ILASFAA-Illinois Association of Financial Aid Administrators
MASFAA-Midwestern Association of Financial Aid Administrators
NASFAA-National Association of Financial Aid Administrators

8. IFAP & the Federal Register
Each year items to be verified and acceptable documentation is published on the Federal Register. You can find a link to the Federal Register at:
If you want to geek out even more you can find the Dear
Colleague Letters, Electronic Announcement, links to the Education Act, Handbooks, various policies, training, and more

9. Required Policies and Procedures

10. The institution must have written policies for:
The time period for submission of verification documentation
Consequences for failure to submit documents
How you will notify the student about EFC and Title IV amount changes
Procedures for how the school and student will correct FAFSA data
The procedure the school will follow when reporting a student to the Inspector General
Verification must be completed before exercising Professional Judgement

11. What is Verification?

12. Verification:
The process of establishing the truth, accuracy, or validity of something

13. Verification is the process of gathering various documentation to ensure the information provided on the FAFSA is correct.
Random Selection of about 35%
Selection for those areas of the application that are error prone

14. Why?...

15. Verification applies to recipients of subsidized Title IV aid:
…Do we do verificaton?
The responsibility of FAA’s to ensure that taxpayer dollars are being used by those students who are eligible
Verification applies to recipients of subsidized Title IV aid:
Pell Grant
FSEOG (Federal Supplemental Education Opportunity Grant)
Federal Work Study
Perkins Loans (Phased Out)
Subsidized Loans

16. Conflicting Information
Must be resolved for all award years, even retractivley, unless:
Student dies during the award year; or
Conflicting data is received after the student is no longer enrolled at the school and does not intend to re-enroll

17. Exclusions

18. We will not complete verification:
For Parent and student data if:
A student is only eligible for unsub loans
If the verification was completed at a different institution and we
have proof
Student dies during the award year
For the parent data if:
Both or the only parent on the FAFSA is mentally incapacitated
Both or the only parent on the FAFSA whereabouts is unknown
Both or the only parent on the FAFSA lives outside of U.S. and out of normal communication

19. We will not complete verification:
For Independent Student: Spouse data
Is deceased or mentally incapacitated
Cannot be located because the contact information is unknown and cannot be obtained by the applicant
Is residing in a country other than the US and cannot be contacted by normal means of communication

20. We will not complete verification:
Exclude some data elements:
The number in the household of a dependent student, if the parents are married and the household size equals 3
The number in the household of an independent student,
if the student is married and the household size equals 2

21. Tracking Groups:

22. three tracking groups V1- Standard Verification Group
V4- Custom Verification Group
V5-Aggregate Verification Group

23. V1 Standard group Items to be verified:
Tax Filer:
Adjusted Gross Income AGI
US income taxes paid
Untaxed portion of pensions
Tax exempt interest income

24. V1 Items to be verified (Cont.):
Tax Filer:
Education tax credit
Household size
Number in College

25. V1 Items to be verified:
Non-Tax Filer:
Income from work
Household size
Number in college

26. V4 custom Group items to verify:
High School completion
Identity and Statement of Educational Purpose

27. V5 Aggregate group items to verify:
All items based on tax filer or non-tax filer status for V1 Standard Verification Group
And…
High School completion
Identity and Statement of Educational Purpose

28. Reassignment of tracking groups:
Applicants can be moved from a previously assigned tracking group to the V5 group. This occurs when the applicant’s FAFSA is updated or when other information becomes available to ED
FAA’s will verify only those items not already verified in the previous group.

29. Items to be verified:

30. Payments to tax deferred pensions and savings plans
Adjusted gross income (AGI)
Income earned from work for nontax filers
U.S. income taxes paid
Untaxed Income and benefits for tax filers
Other untaxed income reported on the FAFSA
Payments to tax deferred pensions and savings plans
Child support received
Living allowance paid to military or clergy
Veterans non educational benefits
Other untaxed income
Money received or paid on the student’s behalf

31. Number of Household members
If an institution determines that the amount of income stated and verified still does not appear to provide sufficient financial support for the number of people in the household, the institution may request additional information to explain how the family was financially supported during the calendar year
Number of Household members enrolled at least half time in a Title IV college
High School completion status
Identity and statement of educational purpose

32. Automatic Zero EFC

33. Auto zero Efc: Minimum Verification Requirements
All Data included in the IRS DRT are considered verified if the IRS Request Flag is 02.
None of the remaining data elements need to be verified for student/parents who qualifies for Auto-Zero EFC

34. Auto zero Efc: Minimum Verification Requirements
Regardless of the tracking group assignment, applicants
who qualify for the Auto-Zero EFC are required to verify
only certain data elements within the tracking group:
Dependents-
The parents AGI (if tax filers) V1-V5
Parent’s income earned from work (if non-tax filer) V1-V5
High School Completion V4-V5
Identity and Statement of Educational Purpose V4-V5

35. Auto zero Efc: Minimum Verification Requirements
Independent students-
The applicant and spouse AGI (if tax filers) V1-V5
Income earned from work for student and spouse
(if non-tax filers) V1-V5
Household members if there are dependents other
than the spouse V1-V5
High School completion V4-V5
Identity and Statement of Educational Purpose V4-V5

36. Acceptable Documentation

37. Number of exemptions claimed AGI U.S. Income taxes paid
Tax Data
IRS Data Retrieval Tool (DRT) unaltered “02” Flag
Tax filing status
Tax return type
Number of exemptions claimed
AGI
U.S. Income taxes paid
Untaxed portions of IRA Distributions

38. IRA Deductions and payments Untaxed portions of pensions
Tax Data
IRA Deductions and payments
Untaxed portions of pensions
Tax-exempt interest
Education tax credits

39. IRS DRT Cannot be Used Tax return not filed Amended tax return filed
Puerto Rican or Non US return filed
Taxes electronically filed within 3 weeks or paper filed within last 11 weeks
Parents are unmarried but living together
Change in marital status after end of tax year and before filing FAFSA

40. IRS DRT Cannot be Used Married Independent student and spouse filed
separate tax returns
Married parents filed separate returns, or a married person filed as Head of Household
First 3 digits of SSN is “666” for Pacific Islanders
Neither married parent has a valid SSN
Both parents entered all zeroes for SSN

41. Tax Return Transcript Alternative to the DRT
Use the “Get Transcript by Mail” option
on the IRS.gov website
Call
Mail IRS form 4506T

42. Tax Return Transcript online pdf
PDF copy online:
the IRS has developed a 2 step-multifactor authentication process that requires registration on the website
User must have:
1. Access to a valid address
2. A text enabled mobile phone
3. Specific finanical account numbers (such as a credit card or home mortgage or auto loan)

43. Acceptable Documentation
Alternative Tax Transcripts:
IRS Record of Account Transcript
Return Transcript of Taxpayer (RTFTP)
Tax Return DataBase View (TRDBV)
All of these tax transcript format contain all the required information
for verification
IRS Tax Account Transcript does not include many of the income and
tax data required to be verified and is not acceptable for verification

44. Acceptable Documentation
You might also use for verification of tax data:
Tax return filing extension IRS form 4868
(extension filed beyond 6 months)
Amended tax return form 1040X
Foreign and US territory tax returns
W2’s from each source of employment
Written Statement of earnings

45. Acceptable Documentation Verification Worksheets
ED provides suggested text to be used in verification worksheets
to assist in gathering additional information. Each instituition can develop and use their own texts, forms, documents, statements, and certifications.
An exception is that schools must use the exact language
provided in the “Statement of Educational Purpose” for students placed in the V4 and V5 Verification Groups

46. Corrections Updates Adjustment

47. Corrections
Corrections are changes to data elements that were incorrect at the time the FAFSA was filed
Required corrections:
- Positive or negative changes in a single dollar item of $25 or more
-Errors to non-dollar items such as address, household size, or
number in college
If a correction results in an adjusted EFC, the award must be changed to reflect the new eligibility

48. Updates
Changes to data correct when FAFSA was filed but later changed.
Required anytime: Household size
Number in College
Required due to verification:
Household size
Number in college
Student marital status change
Optional anytime to address inequality or ability to pay:
Dependency/Marital status

49. Adjustment
Change made by a financial aid administrator when using professional judgement (PJ)

50. Verification Deadlines

51. Deadlines
Institutional deadline: set by the school and there is flexibility
Pell grant deadline: all required documents must be received
with a valid ISIR before the earlier of 120 days from the student’s last day of attendance or the deadline as published in the Federal Register
Campus based/Direct loans: by the deadline as published in the Federal Register

52. Questions?

53. Resources
NASFAA University Self Study Guide:
Verification award year
IFAP
Application and Verification Guide
GEN-01-06

54. ILASFAA Volunteer
Consider becoming a volunteer for ILASFAA whose mission is to provide training, professional development, networking opportunities, and effective communication. ILASFAA acts as an advocate for students, families, and all post-secondary institutions in Illinois.

56. Thank You!!