Verification enlightening you with knowledge of comfort & cushion “ Using the Magnifying Glass”

1. Verificationenlightening you with knowledge of comfort & cushion“ Using the Magnifying Glass” Presented by: La’Charlotte’ C. Garrett, MBA The University of New Orleans L.A.S.F.A.A. Fall 2011 Conference

2. Verification is…. • The audit process of reviewing and determining a students eligibility for Title IV assistance.

3. 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

4. Session Topics • Whose application must be verified • Which data application must be verified • Verification Exclusions • Acceptable Documentation • Data Element Updates • Policies and Procedures

5. Whose Application Must Be Verified? • Applicants selected by Central Processing System (CPS), either randomly or by verification edits • Applications selected by institution

6. 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”

7. Programs to Which Verification Applies • Federal Pell Grant • Campus-based Programs • Subsidized Direct Student Loans

8. 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

9. 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 donotapply

10. Exclusions From Verification • Exclusions include or are limited to: • Entire application—student & parent data • Applicant’s spousal data only • Certain data elements

11. Required Verification Elements • Number in household • Number of household members in college • Adjusted Gross Income (AGI) • U.S. income tax paid • Untaxed Income & Benefits

12. 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

13. 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

14. 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)

15. 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

16. 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

17. Non-Acceptable Tax Documents • Federal Return RECAP • Form 8453 • E-file Authorization Form • Short TAX Version Summary (s)

18. 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

19. 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

20. 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

21. 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

22. 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

23. 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

24. Tolerance Option • $400 net error tolerance for all Title IV Programs FAFSACorrect 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

25. 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

26. Verification Updates • ALL 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 Mustupdate household size if dependent student’s parent remarries after application, but before verification

27. Verification Status Codes • V—Verified • W—Without Documentation • S—Selected/Not Verified • Blank—Not Verified

28. 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.

29. 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

30. 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

31. 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

32. Verification Policy & Procedures • Must: • Be Written • Address school options where flexibility exists • Be made clear to all students • Be consistently applied

33. 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

34. 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

35. RECAP

36. 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

37. You should be able to… • Identify acceptable documents • Tax Returns • Signature Requirements • Untaxed Income & Benefits • Tolerance Level • Traditional vs. Non-traditional Household

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

39. Social Security

40. 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

41. Veteran’s Match • Status Confirmed • Not a qualifying Veteran • No data in VA database • On Active Duty

42. Drug Conviction/Prisoner Match • Student is responsible for contacting Department of Education • Contact #: 1-800-433-3243

43. Verification is The Past, the Present, and the Future … And Yes, We are There!

44. 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

45. Question/Comments

46. Works Cited • www.ifap.ed.gov • www.office.microsoft.com • www.nasfaa.org