1. Dan Robinson Campus Director of Financial Aid Pace University
Verification 101
Dan Robinson
Campus Director of Financial Aid
Pace University

2. Overview What is verification? Who to verify? What to verify?
What is acceptable documentation?
What’s new this year?

3. What Is Verification? A review of certain data elements on the FAFSA
For , there are 3 Verification tracking groups
Confirms eligibility for Pell Grant and need-based financial aid

4. Who to verify: All applicants selected by the Feds and those the school selects
Verification Is Not Required - if the student is only eligible to receive non-need-based aid:
Direct PLUS loan
Grad PLUS loan
Direct Unsubsidized Stafford loan
TEACH Grant
LEAP/SLEAP
Iraq and Afghanistan Service Grant

5. Selected for Verification Indicators
The ISIR/SAR shows EFC – 1234*
The * indicates the student is selected for Verification by CPS

6. 2019-20 Verification Groups V1: Standard Verification
V2: (Reserved for future use)
V3: (Reserved for future use)
V4: Custom Verification
High School completion; Identity/Statement of Educational Purpose
V5: V1+V4
V6: (Reserved for future use)

7. What To Verify – V1 Standard Verification
All Applicants Selected
Household Size
Number in college
Non-Tax Filers
Income Earned From Work
Tax Filers
Adjusted Gross Income (AGI)
Federal Income Taxes Paid
Education credits
Untaxed IRA & Pension Distributions (exclude rollovers)
IRA/SEP Deductions
Tax Exempt Interest Income

8. V4 – Custom Verification
High School Completion – collect one of these
High school diploma
Final high school transcript stating date the diploma was awarded;
Recognized equivalent i.e. GED, Home School, state certificate; already completed 2 years of college
Identity (in person or if can’t be in-person then notarized)
Driver’s license (non-expired)
Passport – cannot be expired
Government or State ID with photo
Statement of Educational Purpose (exact text is provided)

9. V5 – Aggregate Verification Group
V1 + V4 = V5
High School Completion
Identity and Statement of Educational Purpose
All Items in the Standard Verification Group (V1)

10. Verification Documentation
Verification Worksheet
Household size, relationship to student, age, number in college and income earned from work for non-tax filers
IRS Data Retrieval Tool (DRT)
AGI, Taxes Paid, and Untaxed Income (This information will NOT be visible to the student/parent on the Student Aid Report (SAR) or FAFSA online). IRS request field on the ISIR has a value of:
02 – No data changed
03 – No data changed except rollover amount corrected/changed
07- Data pulled from IRS, not changed but tax return was amended
Tax Return Transcript (TRT) – certain info will be redacted
IRS Letter of Non-Filer status
Foreign Income – foreign tax returns – converted to US dollars
W-2’s or Wage & Income Transcript

11. Use of IRS Data Retrieval Tool
Demographic data must match tax return filed EXACTLY!
Ex “St.” versus “street”
Cases when IRS Data Retrieval cannot be used:
Shut down of system by IRS/DOE
Married filing separately
Married and one parent is filing head of household – RED FLAG
Change in marital status after 2017
Puerto Rican or Foreign Returns
Delay if IRS determines victim of identity theft (form 14039)
Delay if filed recently (less than 2 weeks if electronic filing, 6 weeks for paper application) – very unlikely due to PPY

12. Tax Return Transcripts
Use the IRS Get Transcript Online service
Register and download a PDF
Get Transcript by mail
Use IRS form 4506-T (various transcript may be requested)
New “Customer File Number” line 5b added to help identify student (enter ID #)
As of Sept 23, 2018 the IRS has redacted sensitive information on all transcripts

13. Reporting Results for Verification Tracking Flags V4 and V5
Beginning , institutions must report all results for students with a flag of V4 and V5 no later than 60 days following the first request for documentation
Report Identity Verification results on FAA Access to CPS online
Results should be reported as:
Verification completed in person – no issue found
Verification completed using notary – no issues found
Verification attempted, issues found with identity
Verification attempted, issues found with HS completion
Verification attempted, issues found with both identity & HS completion
No response from applicant or unable to locate
For further information see 11/13/13 Electronic Announcement

14. Who is the parent?
“Parent” includes biological, adoptive, and stepparent (if married to biological parent) regardless of gender
“Parent” does not include foster parents, legal guardians, and grandparent or other relatives
If both parents are deceased, a student in foster care or a ward of the court at any time after the age of 13 or was an orphan who was adopted any time since the age of 13 is considered independent for the purpose of completing the FAFSA
Parent’s who are unmarried but living together are both counted on the FAFSA regardless of gender

15. Who is the custodial parent?
Custodial Parent (Divorced or Separated Parents):
Three Question Test
Which parent did student live with more during the 12 months preceding FAFSA completion date?
If live with both equally, which parent provided more financial support during the 12 months preceding FAFSA completion date?
If financial support is equal, which parent has the greater income and benefits?

16. Who is the parent? Visit studentaid.ed.gov

17. Household Size Dependent student Independent student
Student and parent(s)
Student’s siblings (including unborn children that will born during academic year)
Others receiving more than 50% support for the entire award year who live with parents
Independent student
Student and spouse
Student’s children (including unborn children that will born during academic year)
Others receiving more than 50% support for the entire award year who live with student

18. Important Note
Rules for determining household size for FSA purposes are different from IRS rules for determining dependents or household members
Household size must be updated at the time of verification unless the change was the result of the student’s marital status, for which updating is not permitted
In the event of a student marital status change institutions may use their discretion to more accurately reflect the applicant’s ability to pay
Must be evaluated on a case by case basis
Decision reason must be documented
In cases where parent remarried after FAFSA application but before Verification
Must include stepparent in HH size
Institution can use PJ with regard to inclusion of stepparent income

19. Number in College Dependent student Independent student Student
Other dependents in household who will be enrolled at least ½ time during academic year in an eligible degree or certificate program at an eligible FSA school
NOT PARENTS!
Not US military academy students
Independent student
Student
Others in household – including spouse - who will be at least ½ time during academic year in an eligible degree or certificate program at an eligible FSA school

20. Untaxed Income & Benefits
Other untaxed income not on tax return
Child support received for all children in household
Pre-tax contribution to tax-deferred pension
Housing/food/living allowances (excluding rent subsidies for low-income housing and in-kind support)
Cash support (not cash from parents for dependent student)
Untaxed worker’s compensation, disability, foreign income (Do not include Social Security disability)
VA non-education benefits

21. Conflicting Information
Must resolve even if not part of verification
Institutional responsibility
1040 shows parent single or head of household and on the FAFSA/ISIR shows the same person as married
FAFSA shows parents are married and one or both file as head of household or single
Parent or student report on their FAFSA and signed a verification worksheet that they will not file an IRS The amount of reported income is greater than or equal to the minimum amount required to file as indicated by the IRS (publication 17)

22. Do we verify… Dependency Status?
Not required unless there is conflicting information
School may require documentation if a student is independent based on orphan, ward of the court, etc. questions
Assets?
These are not verification items
What is reported on the FAFSA is a snapshot of the assets as of the date the FAFSA is filed
May require more information if question is left blank and verification results determine an amount is required

23. Required Policies & Disbursements
Must have written policies and procedures
Outline deadlines, required documents, student responsibilities, school’s method of notification, required correction procedures, procedures for referring overpayment cases to Dept. of Ed.
May initially disburse federal funds prior to verification or receipt of corrected SAR or ISIR if you believe the application to be accurate.
Pell, SEOG, Perkins: one disbursement in the first payment period
Federal Work Study: can be employed for up to 60 days
Direct Stafford Loans: can originate, but may not disburse
If selected after initial disbursement, must verify before making further disbursements.

24. New for 2018-19, but still around
Comment Codes 400 & 401
IRS Request Flags 06 & 07

25. Code 400/401 (Because 399 just wasn’t enough)
Two new comment codes starting with 2018–2019, also due to the IRS data masking, that schools must respond to:
Code 400 for parents
Code 401 for students
When an ISIR indicates either of these codes, the school must check the FAFSA to see if any of the following conditions exist and make necessary corrections:

26. Codes 400/401
1. The student or parent is a tax filer and the AGI transferred from the IRS is zero, but the total income earned from work is greater than zero
2. The total of the taxable income offsets for the student or parents is greater than the AGI transferred from the IRS
3. Any of the untaxed income items for the student or parent is greater than or equal to the AGI transferred from the IRS

27. 400/401 Information
Although you are not required to verify FAFSA’s with these codes, you are still required to review for possible discrepancies
Documentation might include:
Signed statements
W-2/Wage & Income transcript
IRS Tax Return Transcript
Documentation of child support, child support paid, etc.
Code 402 – maybe next year…..

28. IRS Request Flag 06
A value of 06 indicates that after the DRT was used and the FAFSA was submitted, the student or parent changed an item on the FAFSA (e.g., the date of marriage) that would have made the person ineligible to use the DRT
The school must contact the student or parent to determine if all of the transferred data was correct or if it needs to be corrected

29. IRS Request Flags 06/07
A value of 07 is an indication from the IRS that the student or parent used the DRT but also has filed an amended tax return for the relevant year
Because the data that was transferred will be from the original return and not the amended one
The school must contact the student or parent and make any applicable corrections to FAFSA items, regardless of whether the application was selected for verification

30. Verification Guidance
Student Aid Handbook Verification Guide
DCL GEN – Guidance on Verifiable Information
Publication 17 – Your Federal Income Tax – the IRS Bible
Tax Guide for Individuals
IRS Forms and Publications
Tax Transcripts
USCIS – US Citizenship and Immigration Service
NSLDS
Selective Service Registration Confirmation
Social Security Administration

31. Questions???
For more in-depth verification information, register for the November 1, 2018 webinar