Verification enlightening you with knowledge

of comfort & cushion

“ Using the Magnifying Glass”

Presented by:La’Charlotte’ C. Garrett, MBA

The University of New OrleansL.A.S.F.A.A. Fall 2011 Conference

Verification is….

The audit process of reviewing and determining a students eligibility for Title IV assistance.

Verification is…. Process of verifying accuracy of FAFSA data

Regulations define: Whose application must be verified Data elements to be verified Documentation used to verify data elements

Regardless of verification selection, we also must resolve discrepancies and conflicting information

Session Topics

Whose application must be verified Which data application must be verified Verification Exclusions Acceptable Documentation Data Element Updates Policies and Procedures

Whose Application Must Be Verified?

Applicants selected by Central Processing System (CPS), either randomly or by verification edits

Applications selected by institution

SARs for CPS-Selected Applications

Asterisk next to EFC Comment in student section of first page Verification flag in “For Financial Aid

Office Use Only” section set to “Y”

Programs to Which Verification Applies

Federal Pell Grant

Campus-based Programs

Subsidized Direct Student Loans

Institutionally Selected Applications

Institution can select additional applications not selected by CPS

Selection may be based on such data elements as: Estimated tax figures Low family income levels Large household size vs. number in college Completion of certain FAFSA data elements Other institutional criteria

Exclusions From Verification

Certain types of applicants and data elements exempt from verification

Reason for verification exclusion should be documented in student’s file (example: EFC>COA)

Except for applicant who dies during the award year

If conflicting information or reason to believe application information is inaccurate, exclusions do not apply

Exclusions From Verification

Exclusions include or are limited to:

Entire application—student & parent data

Applicant’s spousal data only

Certain data elements

Required Verification Elements Number in household

Number of household members in college

Adjusted Gross Income (AGI)

U.S. income tax paid

Untaxed Income & Benefits

Required Verification Elements

Certain Untaxed Income & Benefits

Child support received Untaxed IRA/Keogh deductions Interest on tax-free bonds Other untaxed income and

benefits on the tax return such as untaxed pensions and annuities

Required Verification Fields

Other untaxed income and benefits included on tax return

Untaxed IRA/Keogh deductions Untaxed pensions/annuities Taxed portions of Social Security Benefits Credit of Federal tax on special fuels (non-farmers ONLY) Interest on tax-free bonds Additional child tax credit Untaxed combat pay

Items That May Be Verified Using the Tax Return

Adjusted Gross Income(AGI) U. S. Income Tax Paid Taxed & Untaxed IRA/Keogh deductions

and payments Tax-exempt interest income Untaxed pensions distributions Taxed portions of Social Security Benefits Untaxed IRA Credit for federal tax on special fuels Interest on tax-free bonds Untaxed combat pay (when reported)

Acceptable Tax Returns

Effective 2012/2013 AY IRS Data Retrieval for FAFSA IRS printout with all line items IRS Tax Transcript (long version)

Form 1040 Form 1040A Form 1040EZ Amended 1040X with regular copy of Form

1040

Acceptable Tax Return Requirements

***ALL Tax Returns must have the following for Tax Preparer &

Verification Signature Requirements***

ONE of these and ONE of these: Stamped Name SSN Typed Name EIN (Employee Identification Number)

Signed Name PIN (Preparer Tax Identification Number)

Printed Name

Non-Acceptable Tax Documents

Federal Return RECAP

Form 8453

E-file Authorization Form

Short TAX Version Summary (s)

Tax Filing Extensions

Collect w-2 and one of the following: IRS From 4886; or Copy of IRS approval of

extension beyond 4-month extension

Collect and review the tax return when filed

Separating Data on Joint Returns

Use w-2 to identify individual’s personal income Assess income & losses on jointly-owned accounts,

investments, businesses, & farms at 50% If AGI in joint return was adjusted, reduce individual’s

AGI by portion of adjustment attributable to that individual

Figure taxes paid using: Tax rate schedule; or Proportional distribution method

Child Support Documentation

Obtain verification worksheet or written statement certifying amount of child support received for all children

Statement must be signed by applicant & at least one parent (if dependent) If ordered by the courts, copy of court docket

Statement must be signed by applicant if independent If support paid through government agency, statement

from that agency is acceptable

Child Support Documentation

Request additional documentation if information provided appears inaccurate

Copy of separation agreement or divorce decree Signed statement from parent providing support Copies of cancelled child support checks or money order

receipts

Household Individuals Verification worksheet should include the

following: Name Age Relationship to applicant Postsecondary school stated (if applicable)

Note: A school may request in-school enrollment verification on those individuals listed in post-secondary institution by applicant

Verification Corrections

Changes to data elements that were incorrect at time of application

Data correct as reported and valid ISIR/SAR: Pay Federal Pell Grant, FSEOG, & Federal Perkins Loan

Employ students under Federal Work-study Program

Certify/originate & disburse Direct Loans

Tolerance Option $400 net error tolerance for all Title IV Programs

FAFSA Correct Parent AGI Parent AGI+ Student AGI + Student AGI+ Parent Untaxed Income + Parent Untaxed Income+ Student Untaxed Income + Student Untaxed Income-Parent U.S. Taxes Paid -Parent U.S. Taxes Paid-Student U.S. Taxes Paid -Student U.S. Taxes Paid=FAFSA data (uncorrected sum) =Correct data (corrected sum)

Net differences:≤$400

Verification Updates

Changes to data elements that were correct at time of application but have since changed

Applicable only to 3 items: Dependency Status Number in Household Number of household members enrolled in college

Verification UpdatesALL students must update dependency status if it changes at any time

Marital Status—Cannot be updated if it changes as result of change in marital status once the initial application is completed.

Students Must update household size if dependent student’s parent remarries after application, but before verification

Verification Status Codes

V—Verified

W—Without Documentation

S—Selected/Not Verified

Blank—Not Verified

Professional Judgment

If using PJ authority to adjust data fields/elements used to calculate EFC on selection application, application must be verified first.

If using projected-year income date to recalculate EFC, projected-year data do not need to be verified.

Interim Disbursements If a school makes an interim disbursement and it is later

determined that the student is ineligible, or if verification was not completed; then the student in ineligible for the award overpayment

A student with an Overpayment is INELGIBLE for Title IV funds

$300 Overpayment tolerance for campus-based programs only

School is liable if the Overpayment is not resolved

Verification Time Frames Institutions are responsible to establish deadline

dates

Institution must receive all requested verification documents and a valid ISIR/SAR within 120 days of the students last day of attendance or the deadline published in the Federal Register or:

Federal Pell Grant and Federal SEOG are forfeited Any previously disbursed/paid Aid must be returned

Purpose to V.E.R.I.F.Y.

V—various documents & attitudes encountered

E—efficient eyes needed to pinpoint mistakes & errors to embrace a student’s eligibility

R—regulations & readiness to learn rules and resources

I—importance of interpreting documents

F—field items required for review

Y—youthful spirit needed to keep our customers happy

Verification Policy & Procedures

Must: Be Written Address school options where flexibility exists Be made clear to all students Be consistently applied

Verification Policy & Procedures (cont.)

Must include: Procedures from identifying and processing selected

applications Deadline for applicant to provide documentation &

consequences of failure to meet deadline Procedures applicant must follow to correct

application information

Verification Policy & Procedures (cont.)

Method for notifying applicant of verification results and change in EFC and/or award

Procedures for referring cases or suspected fraud or other criminal misconduct to ED Office of Inspector General

RECAP

Verification is….

Lifetime learning process, not done overnight

It may take a few months or years to master

The process of reviewing a students data to check for accuracy

You should be able to…

Identify acceptable documents Tax Returns Signature Requirements Untaxed Income & Benefits Tolerance Level Traditional vs. Non-traditional

Household

Citizenship

Students must be a U.S. citizen U.S. permanent resident Eligible non-citizen

Social SecurityResult Comment Action needed

Match conducted SSA confirmed No comment No resolution required

SSA did not confirm citizenship Comment Listed on SAR/ISIR

If U.S. Citizen—documents requiredIf DHS matched ( for eligible non-citizen)—

no resolution required

SSA did not confirm citizenship, no match on SSN, name or date of birth

Comment Listed on SAR/ISIR

Resolution required

Selective Service How can one register?

FAFSA or on-line

Who is required? Men of ages 18 through 25 are

required to register.

Contact Information: www.sss.gov 1-847-688-6888

Veteran’s Match

Status Confirmed

Not a qualifying Veteran

No data in VA database

On Active Duty

Drug Conviction/Prisoner Match

Student is responsible for contacting Department of Education

Contact #: 1-800-433-3243

The Past, the Present, and the Future …

And Yes, We are There!

Verification is

Reflecting on the …

Past—Taking students at their word I live in a household of 6… my grandmother is the only mother I Know…

Present—Resolving the conflicting data Filing Status on Taxes

Future—IRS Data Retrieval IRS Transcripts

Question/Comments

Works Cited

www.ifap.ed.gov www.office.microsoft.com www.nasfaa.org