Verification for Beginners: Ensuring Accurate FAFSA Information

1. Session Title Verification for beginners Presented by: ChilwanaThompson Assistant Director-Student Financial Services Millikin University It’s Time to Light the Lights 2016 ILASFAA Annual Conference April 6 – 8, 2016, Hilton, Lisle, IL 2016 ILASFAA Annual Conference April 6 – 8, 2016, Hilton, Lisle, IL

2. What is Verification? Verification is the confirmation through documentation that the information provided on a student's Free Application for Federal Student Aid (FAFSA) is correct. The federal government requires colleges and universities to verify or confirm the data reported by students and their parent(s) on the FAFSA. 2016 ILASFAA Annual Conference

3. Why Verify? Because students sometimes make errors on their application, there is a process for verifying applications and making corrections. The Central Processing System (CPS) selects which applications are to be verified, but you also have the authority to verify additional students. You must verify applications selected by CPS of students who will receive (or have received) subsidized student financial assistance. Verification is not required if the student will only receive unsubsidized student financial assistance, however a student cannot avoid verification by accepting only unsubsidized aid. 2016 ILASFAA Annual Conference

4. Required Policies & Procedures • Your school must have written policies aboutthe time period in which students must submit verification documentation. • Consequences for failing to submit those documents in time. • The method you will use to notify students if their EFC and Title IV aid amounts change. • Procedures you or students will follow to correct FAFSA data. • The procedure you will follow to refer a student to the Office of Inspector General. Note: You must complete verification for a selected student before you exercise professional judgement to adjust any values that are used to calculate the EFC. 2016 ILASFAA Annual Conference

5. Verification Guidance New for 1617: Applicants may be moved from previously assigned Groups V1, V4, and V6 to Verification Tracking Group V5. • Applicant is only required to verify the additional items in V5 that were not previously verified. • If the applicant is moved to Verification Tracking Group V5, no additional disbursements of any Title IV aid may be made until verification is satisfactorily completed. • If verification is not satisfactorily completed, the student is liable for the full amount of Title IV aid disbursed. • The institution is not liable. 2016 ILASFAA Annual Conference

6. Verification Guidance: Exclusions There are times when you don’t need to verify a student’s application. Except in the case of the student’s death, however, none of the exemptions excuse you from the requirement to resolve conflicting information. You should document the basis for an exclusion. Other information not excluded must still be verified according to all other requirements. 2016 ILASFAA Annual Conference

7. Verification Guidance: Exclusions You don’t have to verify FAFSA information of a student in the following situations: • Death of the student. You don’t have to continue verification if you made an interim disbursement and the student died before verification was completed. You cannot make any additional disbursements, except for FWS funds already earned, to any of the student’s beneficiaries. You cannot originate or disburse his Direct Subsidized Loan or consider any interim disbursement you made of Pell, Perkins, or FSEOG funds or provisional FWS employment to be an overpayment. • Not an aid recipient. The student won’t receive Title IV aid for reasons other than a failure to complete verification. This includes being ineligible for that aid and withdrawing without receiving it. • The applicant is eligible to receive only unsubsidized student financial assistance. • Applicant verified by another school. The student completed verification for the current award year at another school before transferring. Her FAFSA data must be the same as it was at the previous school, and you must get a letter from that school stating that it verified her application and providing the transaction number of the pertinent valid ISIR. • Post enrollment. The student was selected for verification after ceasing to be enrolled at your school and all (including late) disbursements were made. 2016 ILASFAA Annual Conference

8. Verification Guidance: Exclusions Unless you have reason to believe it is inaccurate, you don’t have to verify the reported FAFSA information of the parents of a dependent student if any of the following apply: • Both of the parents are mentally incapacitated. • Both parents or the custodial parent has died. • They are residing in a country other than the United States and can’t be contacted by normal means. • They can’t be located because the student does not have and cannot get their contact information. Unless you have reason to believe it is inaccurate, you don’t have to verify the reported FAFSA information of the spouse of an independent student if any of the following apply: • The spouse has died. • He is mentally incapacitated. • He is residing in a country other than the United States and can’t be contacted by normal means. • He can’t be located because the student does not have and cannot get his contact information. 2016 ILASFAA Annual Conference

9. Late Disbursements Generally a student ceases to be eligible for aid once he has finished the term and is no longer enrolled. However, he may submit verification documentation and receive a late disbursement after that time if the Department processed a SAR or ISIR with an official EFC while he was still enrolled. 2016 ILASFAA Annual Conference

10. Verification Status Codes When you disburse a Pell Grant, you must report the student’s verification status through Common Origination and Disbursement (COD) even if he wasn’t selected for verification. • V—You have verified the student. This includes students selected by the CPS and those your school chose to verify based on its own criteria. • W—The student was selected for verification by the CPS or your school, and you chose to pay a first disbursement of Pell without documentation. This code must be updated once verification is complete, or COD will reduce the Pell Grant to zero. • S—The CPS selected the student for verification, but you did not verify him because he satisfied one of the exclusions described earlier in the chapter (except the post-enrollment exclusion, see below) or because your school participates in the Quality Assurance Program and the student’s application did not meet your school’s verification criteria. • Blank—Report a blank if you have not performed verification because neither the CPS nor your school selected the student or because the student was selected by the CPS after ceasing to be enrolled at your school and all (including late) disbursements were made. 2016 ILASFAA Annual Conference

11. Verification Groups 2016-17 • V1-Standard • V4-Custom • V5-Aggregate • V6-Household Resources 2016 ILASFAA Annual Conference

12. Verification Acceptable Documentation The documentation you will need for verification varies according to the item verified. The Department encourages students and parents to use the IRS Data Retrieval Tool (DRT) to import data from their tax return and not change it. It is the fastest, easiest, and most secure method of meeting verification requirements. For the retrieved data to be acceptable documentation of tax data, it is necessary that neither students nor parents change the data after it is transferred from the IRS—if the data was changed or if you have reason to believe the data transferred is incorrect, the student will need to provide a return transcript as explained below. The IRS request field(s) on the ISIR will have a value of “02” when the data is unchanged. 2016 ILASFAA Annual Conference

13. Verification Acceptable Documentation If students cannot or will not use IRS Data Retrieval, either at initial FAFSA filing or though the (FAFSA on the Web) FOTW correction process, they must document AGI, taxes paid, and untaxed income by providing an IRS tax return transcript for the student and spouse or parents, as applicable. Under the following conditions, the IRS Data Retrieval is not available in FOTW (all apply to both students and parents unless otherwise noted): • The person did not indicate on the FAFSA that the tax return has been completed. • The marriage date is January 2016 or later. • The first three digits of the SSN are 666. • The tax return was amended. • The person filed a non-U.S. tax return. • The person is married and filed the tax return either as head of household or married but filing a separate return. • Neither married parent entered a valid SSN. • A non-married parent or both married parents entered all zeroes for the SSN. While encouraged, tax transcripts submitted to your school for verification do not need to be signed by the tax filer unless you have reason to doubt their authenticity. 2016 ILASFAA Annual Conference

14. Verification Acceptable Documentation Transcript Requests • Online Get Transcript by Mail, • Automated phone tool (1-800-908-9946) • Paper Form 4506-T or 4506T-EZ generate a paper transcript 2016 ILASFAA Annual Conference

15. Verification Acceptable Documentation • Acceptable Documentation • Tax filers in a U.S. territory or commonwealth must submit a transcript of their tax return if it is available for free from the taxing authority • Nontax filers in the Freely Associated States, a U.S. territory or commonwealth, or a foreign country must submit a copy of their Wage and Tax statement for each source of employment income for 2015 and a signed statement identifying all income and taxes for 2015 2016 ILASFAA Annual Conference

16. Verification Acceptable Documentation • Tax filers and Nontax filers—if a copy of the tax return was not retained and cannot be located by the IRS must submit: • Copy of all relevant W-2s • Signed statement that the individual did not retain a copy of his or her tax account information, and • Documentation from the IRS that indicates that the individual’s 2015 tax account information cannot be located 2016 ILASFAA Annual Conference

17. Verification Acceptable Documentation • Victims of IRS tax-related identity theft must submit: • A Tax Return DataBase View (TRDBV) transcript and • A signed and dated statement from the tax filers that they are victims of IRS tax-related identity theft and that the IRS has been made aware of this • Tax filers who filed an amended tax return must submit: • A transcript from the IRS that lists tax account information of the tax filer and • A signed copy of the IRS Form 1040X that was filed 2016 ILASFAA Annual Conference

18. Identity Theft: Additional Guidance A tax filer who is unable to obtain an IRS Tax Return Transcript because of IRS identity theft, calls a special IRS group at 1-800-908-4490 • Upon verification of identity, the tax filer can obtain a paper copy of an alternative document unique to identity theft issues (Tax Return Data Base View (TRDBV)) • The TRDBV is an official transcript that can be submitted to the school to meet verification requirements 2016 ILASFAA Annual Conference

19. Verification Acceptable Documentation • The Department of Education (ED) provides suggested text that institutions may use to gather verification documentation. • Schools are not required to use the Department’s suggested text or format to gather information required for verification. • The one exception, however, is that schools must use the EXACT language provided in the Statement of Educational Purpose as it appears in the Federal Register. 2016 ILASFAA Annual Conference

20. V1 Group Verification Items All Tax Filers • Adjusted gross income • U.S. income tax paid • Untaxed portions of IRA distributions • Untaxed portions of pensions • IRA deductions and payments • Tax-exempt interest income • Education credits • Household size • Number in college • Supplemental Nutrition Assistance Program (SNAP) benefits • Child support paid Non-Tax Filers • Income earned from work • Household size • Number in college • SNAP benefits • Child support paid 2016 ILASFAA Annual Conference

21. Acceptable Documentation (V1, V5, V6) Tax Filers • IRS DRT • Tax Return Transcripts • Alternate documentation where allowed (e.g. amended returns, foreign returns, etc.) Non-Tax Filers • Signed Statement Certifying- • Individual has not filed and not required to file a 2015 tax return; • Sources of income earned from work and amounts of income form each source for tax year 2015; and • Copy W-2 forms for each source of employment income received for tax year 2015 2016 ILASFAA Annual Conference

22. SNAP Documentation SNAP Benefits (if reported on ISIR) • Statement signed by applicant/parent affirming SNAP benefits received by someone in household during 2014 and/or 2015 • If school has concerns with accuracy of information, the institution must obtain documentation from the agency that issued the SNAP benefits 2016 ILASFAA Annual Conference

23. Child Support Documentation Child Support Paid (if reported on ISIR) Statement signed by applicant/parent certifying- • Amount of child support paid; • Name of the person who paid the child support; • Name of the person to whom child support was paid 2016 ILASFAA Annual Conference

24. V4 Group Verification Items • High School Completion Status • Identity/Statement of Educational Purpose • SNAP Benefits • Child Support Paid 2016 ILASFAA Annual Conference

25. High School Completion Status Documentation: • High School Diploma; or • Final official high school transcript showing date diploma awarded; or • “Secondary school leaving certificate” for students who completed secondary education in a foreign country and are unable to a get copy of high school diploma/transcript 2016 ILASFAA Annual Conference

26. High School Completion Status Recognized equivalent of a HS Diploma Documentation: • Copy of the student’s General Educational Development (GED) certificate, an official GED transcript that indicates the student passed the exam, or a state-authorized HS equivalent certificate; or • Academic transcript of a student who has successfully completed at least a two-year program that is acceptable for full credit toward a bachelor's degree; or • Student excelled academically in HS and met all criteria to be admitted into a two-year degree program or higher 2016 ILASFAA Annual Conference

27. High School Completion Status Test transcripts of State-authorized examinations Documentation: • Test transcripts of State-authorized examinations (e.g., GED test, HiSET, TASC, or other State-authorized high school equivalency examinations) are acceptable documentation of high school completion only if: • The official test transcript specifically indicates that a State has determined that the test results are considered by the State to meet its requirements of high school equivalency; or • The official test transcript includes language that the final score is a passing score 2016 ILASFAA Annual Conference

28. High School Completion Status Homeschooled Documentation: • Credential, transcript, or the equivalent, signed by the parent or guardian, that lists the secondary school courses completed by the applicant and documents the successful completion of a secondary school education; or • A secondary school completion credential for home school provided for under State law 2016 ILASFAA Annual Conference

29. Identity/Statement of Educational Purpose Students that appear in person Documentation: • Present to an institutionally authorized individual • An unexpired valid government-issued photo identification; and • A signed statement of educational purpose provided by ED, cannot be modified • Maintain an annotated copy of the identification: • The date documentation was received; and • The name of the institutionally authorized individual that obtained the documentation 2016 ILASFAA Annual Conference

30. Identity/Statement of Educational Purpose Students unable to appear in person Documentation: • Must provide the institution— • A copy of an unexpired valid government-issued photo identification AND • An original, notarized statement of educational purpose signed by the applicant, cannot be faxed or scanned • Maintain a copy in the file • After examining the original Statement of Educational Purpose for accuracy and completeness, the institution may convert it into an electronic record 2016 ILASFAA Annual Conference

31. V5 Group Verification Items Tax Filers • Adjusted gross income • U.S. income tax paid • Untaxed portions of IRA distributions • Untaxed portions of pensions • IRA deductions and payments • Tax-exempt interest income • Education credits • Household size • Number in college • Supplemental Nutrition Assistance Program (SNAP) benefits • Child support paid • High School Completion Status • Identity/Statement of Educational Purpose Non-Tax Filers • Income earned from work • Household size • Number in college • SNAP benefits • Child support paid • High School Completion Status • Identity/Statement of Educational Purpose 2016 ILASFAA Annual Conference

32. V6 Group Verification Items Tax Filers • Adjusted gross income • U.S. income tax paid • Untaxed portions of IRA distributions • Untaxed portions of pensions • IRA deductions and payments • Tax-exempt interest income • Education credits • Household size • Number in college • Supplemental Nutrition Assistance Program (SNAP) benefits • Child support paid Non-Tax Filers • Income earned from work • Household size • Number in college • SNAP benefits • Child support paid 2016 ILASFAA Annual Conference

33. V6 Group Verification Items Other untaxed income: • Payments to tax-deferred pension and savings • Child support received • Housing, food, and other living allowances paid to members of the military, clergy, and others • Veterans non-education benefits • Other untaxed income • Money received or paid on the applicant’s behalf 2016 ILASFAA Annual Conference

34. V6 Other Untaxed Income Documentation • Signed statement listing – • Sources and amounts of income for tax year 2015; and • Copy W2s for sources of employment income received for tax year 2015, where applicable 2016 ILASFAA Annual Conference

35. V6 Other Untaxed Income Documentation If school determines amounts provided do not appear to provide sufficient support for family members reported, the applicant (and parent/spouse) must: • Provide additional signed statement listing other resources used to support family (may include items not required to be reported on FAFSA or other verification forms) • Explain how financially supported during 2015 calendar year 2016 ILASFAA Annual Conference

36. V6 Other Untaxed Income Documentation • Institutions should use reasonable judgment when evaluating the validity of the income information provided by students and parents who are placed in Verification Tracking Group V6 • “Reasonable” may differ among institutions • Institutions may choose to accept a signed low-income statement, an income-to-expenses comparison, or other documentation as determined by the institution 2016 ILASFAA Annual Conference

37. How to Submit Corrections and Updates • Via FAFSA on the Web-Student may correct here. • FAA Access to CPS Online or Electronic Date Exchange (EDE) • Student Aid Report (SAR) Note: To receive subsidized student aid, students or the school must submit for processing any changes resulting from verification to a non-dollar item or a single dollar item of $25 or more. 2016 ILASFAA Annual Conference

38. Resources • 2016-17 • Federal Register Notice, published June 26, 2015, Free Application for Federal Student Aid (FAFSA) Information To Be Verified for the 2016-17 Award Year • Dear Colleague Letter GEN-15-11, Published June 29, 2015, 2016-17 Award Year: FAFSA Information to be Verified and Acceptable Documentation • 2016-17 • 2016-17 Verification Suggested Text and Availability of 2015 IRS Tax Information; Electronic Announcement Published on November 18, 2015 http://ifap.ed.gov/eannouncements/111815VerificationSuggestedTextAvailability2015IRSTaxInfo20162017.html • Program Integrity Q & A Website (verification topic) http://www2.ed.gov/policy/highered/reg/hearulemaking/2009/integrity-qa.html 2016 ILASFAA Annual Conference

39. Questions? 2016 ILASFAA Annual Conference