1. Overview of 2018–19 Verification A NASFAA Authorized Event
Overview of –19 Verification A NASFAA Authorized Event* Shannon Crossland, SWASFAA President LASFAA Conference, October 18th New Orleans, LA –19
Welcome
Introductions
Resources – Slides, Study Guide, Workbook
Encourage Other Resources – FSA Handbook, iFAP, Code of Federal Regulations
Housekeeping – Restrooms, cell phones, break
Around the room – introduce – Name, school, and role

2. Verification of FAFSA Data Selection Tracking Groups
Agenda
Verification of FAFSA Data
Selection
Tracking Groups
Documentation Requirements
Corrections, Updates, and Adjustments
Disbursements and Deadlines
Policies and Procedures
Review agenda items.
Verification is the process used by the institution to check the accuracy of the information provided on the FAFSA.

3. Verification of FAFSA Data
Accuracy
Validity
Equity
As stated previously, verification is the process used to check accuracy
Verification ensures the accuracy of data used to establish eligibility for need-based Federal aid.

4. Verification of FAFSA Data
Regulations define which applications, data elements, and documentation
Verification applies to recipients of subsidized Title IV aid
Federal Pell Grant
Federal Supplemental Educational Opportunity Grant (FSEOG)
Federal Work-Study (FWS)
Direct Subsidized Loans
Verification regulations define:
Whose applications are subject to verification; what FAFSA information to verify and acceptable documentation
Applicants who receive funds from Pell, SEOG, FWS or SUB loans are subject to verification
Verification selection by CPS is indicated on student’s Institutional Student Information Record (ISIR) and Student Aid Report (SAR)

5. Conflicting Information
Must be resolved for all award years, even retroactively, unless:
Student dies during the award year; or
Conflicting data are received after the student is no longer enrolled at the school and does not intend to re-enroll at the school in the future
School decides what documentation it deems appropriate to resolve any conflicts
Not set by U.S. Department of Education (ED)
Verification often identifies conflicting information between FAFSA data and other information the school has available.
**** Conflicting information requirements apply to ALL applicants; verification requirements apply only to those who are selected.
ALL conflicting information must be resolved for all award years
Exceptions are listed in the slide -
REMINDER *** As part of administrative capability, schools are required to resolve any conflicting data for all award years.

6. Verification Exclusions
Verification is not required under certain circumstances
Entire application
Spousal data
Parental data
Certain data elements
Institutional exemption
Applicants, parents, spouses, etc. are excluded under certain circumstances AS LONG AS there is no conflicting information.
The reason for exclusion MUST be documented.
We will discuss in detail these exclusions in the next slides.

7. Verification Selection
Student
SAR
Selection by:
CPS, which applies to all schools
Individual school
ED uses a customized approach
May be information not used in EFC
ED uses a customized approach to select applications for verification.
Criteria are determined annually and published in the Federal Register
Application data is run through verification selection algorithm initially, and each time corrections are made.

8. Verification Tracking Groups
Tax filer income (AGI, taxes paid, untaxed IRA and pension distributions, IRA deductions and payments, tax-exempt interest, education tax credits)
Nontax filer income (income earned from work)
Household size
Number in college V1
Standard Verification Group
Assigned to 1 of 3 for 1819
Each applicant is assigned a Verification Tracking Flag
V1 – Standard
V4 – Custom
V5 - Aggregate

9. Verification Tracking Groups
High school completion
Identity and Statement of Educational Purpose V4
Custom Verification Group

10. Verification Tracking Groups
Tax filer income from V1
Nontax filer income (income earned from work)
Household size
Number in college
High school completion
Identity and Statement of Educational Purpose V5
Aggregate Verification Group

11. Required Data Items for CPS-Selected Applicants
Federal Register
Dear Colleague Letter
Requirements are announced annually.
Data required to be verified is posted in the Federal Register
Additional information in DCL
Note: requirements – DCL17-05
Best practice – review these annually.

12. General Documentation Requirements
May file FAFSA using estimated income
Must complete verification using actual income according to the filed tax return
Specified year is the prior-prior year (PPY)
For 2018–19, the specified year is 2016
Be aware of which year’s income and tax data is reported on the FAFSA.
2016
2017

13. IRS Data Retrieval Tool
Tax return type
Tax filing status
Exemptions claimed
AGI
Income from work (single, not filing jointly)
U.S. taxes paid
Untaxed IRA distributions
IRA deductions
Untaxed pensions
Tax-exempt interest
Education tax credits
The IRS DRT is the principal source of verification documents, as long as the data remains unaltered.
Equivalent to obtaining a tax return transcript

14. IRS DRT Cannot Be Used When…X
Tax return not yet filed
Puerto Rican or foreign (non-U.S.) tax return filed
Taxes filed electronically within last 3 weeks
Taxes filed by mail within last 11 weeks
Parents are unmarried and living together
Change in marital status after end of tax year and before filing FAFSA
Conflict between marital and tax filing status X
Married independent student and spouse filed separate tax returns
Married parents filed separate tax returns
Married and filed taxes as head of household
First 3 digits of Social Security Number (SSN) are “666”
Neither married parent has a valid SSN
Both parents entered all zeros for SSN X X X X X X X X X X X

15. Data Element Considered Verified?
IRS Request Flag
IRS Data Field Flag*
Data Element Considered Verified?
Blank, 00, 01, 05
Blank or 0
No; need Tax Return Transcript 02 1
Yes; no additional documentation
03 or 04 06
Yes, but only if correct person is on FAFSA/ISIR 07
Yes, unless 1040X indicates data element was amended
This table illustrates conditions when an a “1” data field flag can and cannot be used in conjunction with the request flag to complete verification.
* IRS Data Field Flags “2” through “4” mean transferred data changed, so additional documentation is needed to complete verification.

16. Tax Return Transcript Can be requested: IRS Get Transcript Online
IRS Get Transcript by Mail
Mail or fax IRS Form 4506-T or 4506T-EZ
Income Verification Express Service
Point out sample page on slide – says Tax Return Transcript

17. Tax Return Transcript Alternatives
Record of Account Transcript
Tax Return Database View (TRDBV) Transcript
Return Transcript for Taxpayer (RTFTP)
Any IRS tax transcript with all required data
An institution may accept as documentation any IRS tax transcript that includes all of the income and tax information required to be verified.
Certain transcripts are not acceptable alone:
Information returns processing transcript request – wages
Tax account transcript – acceptable ONLy for use with Form 1040 X to verify amended tax files

18. AGI—Tax Filers: Additional Documentation Required
Tax return filing extensions
Amended tax returns
Government cannot locate tax account information
Special circumstances published by ED
Separating income on joint tax returns
Note on amended tax returns – IRS request flag 07 must be resolved whether or not the student is selected for verification.

19. Verification Worksheets
ED provides suggested text annually
School may:
Use ED’s suggested text or create its own
Create a comprehensive worksheet or customize it according to selected data
School must use ED’s identity and Statement of Educational Purpose text as is
EDs suggested text start on page 79 of your study guide and NASFAA has provided samples which are available on page 93.
Note – Schools must used EDs Identity and Statement of Educational Purpose text as is.

20. Acceptable Signature Formats
“Wet”
Photo-copied
Faxed
Electronic
Electronic – PIN to sign for identification and authentication – explain TTUs electronic signature
Must comply with Eds standards for electronic signatures in electronic student loan transactions – these standards apply to all areas wherein institutions choose to use electronic records and signatures.

21. AGI and Income Tax Paid—Tax Filers
Acceptable Alternatives
Unaltered IRS DRT data
Tax Return Transcript
Other tax transcript listing tax account information
Foreign tax returns
U.S. Territory tax returns
Point out tax related identity theft on page 65

22. Income Earned from Work—Nontax Filers
U.S. Individuals
Statement or verification worksheet;
Form W-2 from each employer; and
IRS Verification of Nonfiling Letter*
Foreign Residents
Wage and Tax Statement or equivalent;
Statement or verification worksheet; and
Verification of Nonfiling from tax authority*
Reminder to resolve any conflicting information.
See page 71 of study guide
*Except dependent student

23. Verification of Nonfiling
IRS Verification of Nonfiling Letter dated after October 1, 2017 is required from:
Dependent parent who did not and was not required to file a tax return
Independent student (or spouse, if applicable) who did not and was not required to file
For 2018–19, not required from dependent student
Groups V1 and V5, even if income is zero

24. Untaxed Income and Benefits—Tax Filers
Verify specific types of untaxed income:
Untaxed portions of IRA distributions
Untaxed portions of pension and annuity distributions
IRA deductions and payments
Tax-exempt interest income
Education tax credits
Signature not required when data is validated via IRS DRT
Refer to page 73 of study guide – see next slides for where to find this information

25. IRA, Pension, and Annuity Rollovers
Rollovers are excluded from EFC
IRS DRT:
If distribution received, tax filer is asked to enter amount of any rollover
IRS Request Flag = “3” and IRS Data Field Flag = “2”
Not using IRS DRT:
Tax filer subtracts amount of rollover before reporting Untaxed Income
Document amount of rollover
Rollover amount excluded when filing paper FAFSA and not using DRT
DRT – asked to enter amount flag changes to 3 and data field changes to 2

26. Household Size and Number in College
Signed verification worksheet or statement listing:
Names and ages of all household members
Relationship of each to student
Name of postsecondary institution in which household member is enrolled at least half time in Title IV-eligible program and institution
Review slide

27. High School Completion
High school diploma always preferred
Several types of documents can be used
School may accept alternative documentation only when:
Secondary school documentation is unavailable (e.g., closed school, deceased parent who provided home schooling)
Foreign refugees, asylees, and victims of human trafficking cannot obtain diploma or secondary school leaving certificate
Review slides
Note – graduate students are still required to verify high school completion – exception – not required if admission to the graduate program requires completion of at least two years of UG coursework acceptable for full credit toward a bachelor’s degree
VERY unusual circumstances when alternative documents are acceptable.

28. Identity and Statement of Educational Purpose
*signature requirement
Must used exact ED language
See pg 78 for IDs that cannot be used to verify identity
*photocopies of military IDs cannot be used to verify identity

29. Optional Institutionally Selected Data
Cannot include resources specifically excluded from need analysis, such as:
Federal veteran’s educational benefits
Military housing/housing allowance
State foster care or adoption assistance payments
Means-tested welfare benefits
Combat pay
Foreign income exclusions
In-kind support
Care must be taken not to include the following – more examples on page 41 of your guide.
These forms of income are prohibited by law from inclusion in the EFC calculation for Title IV purposes.

30. Optional Institutionally Selected Data
Exceptionally low income may be validated
School may ask the applicant to explain how the family was supported
School decides what constitutes acceptable documentation for anything other than federally required verification data
Can be same as current or past ED requirements

31. Changes to Applicant Data
Correction
Changes to data that were incorrect when FAFSA was filed
Update
Changes to data correct when FAFSA was filed but later changed
Adjustment
Change made by aid administrator using professional judgment (PJ)
Read definitions

32. PJ Adjustments Optional
Discretion granted to financial aid administrators under section 479A(a) of Higher Education Act of 1965 (HEA), as amended
Verification of specified-year data and resolution of conflicting information required before PJ (except dependency override or if adjusting those data elements using PJ)
Verification must be exercised prior to the PJ.

33. Disbursements
If not making interim disbursements, and selected for verification or changes tracking groups:
No further Title IV disbursements/FWS earnings can be paid until verification is completed
Do not return previously disbursed funds while waiting to complete verification
If verification is never completed certain aid must be returned by student per 10/31/16 Electronic Announcement
Review slide

34. Verification and the Award Cycle
Upon receipt of ISIR
Before making tentative award
After making tentative award, but before award confirmation
After student accepts award, but before disbursement
After interim disbursement, but before second disbursement
Verification may occur at any of the points shown in the slide.

35. Verification Deadlines
Federal Pell Grant deadline
Institutional deadline
Campus-Based and Direct Loan deadlines
Schools have the ability to establish a verification deadline and may exercise flexibility in how deadline is applied.
Publish
Document
Pell deadline is determined by ED
Camp and DL are based on the earlier of school or ED

36. Verification Policies and Procedures
Selection
Procedures
How are students selected
Information Shared
Document requirements
Student responsibilities
Document Submission
Deadlines
Consequences for noncompliance
Post-Verification
Process to correct data
Outcome notification to student
Reporting
My favorite!!
Policy is a statement of how and institution will administer process procedure is the step
See flow chart on page 175 of study guide – show chart
REQUIRED by regulations
Audit experience

37. 1. Does your institution select applications for verification in addition to those selected by the CPS? What triggers your selection? 2. Does your institution verify data elements beyond the minimum federal requirements? What are they? 3. Based on your own experience, do you think the U.S. Department of Education (ED) is selecting the most error-prone applications for verification?

38. Verification of FAFSA Data Selection Tracking Groups
Agenda
Verification of FAFSA Data
Selection
Tracking Groups
Documentation Requirements
Corrections, Updates, and Adjustments
Disbursements and Deadlines
Policies and Procedures
I think we have covered everything.
Sign-in sheet – I will you the study guide.
Thank you all sooo very much!!!