2014-15 fafsa & verification mafaa professional development day st. paul, mn october 29, 2013

2014-15 FAFSA

& Verification MAFAA Professional Development Day

St. Paul, MN

October 29, 2013

2014-15 FAFSA

• Parental information collection changes GEN 13-12 April 29, 2013• Applies to dependent students when legal parents live

together• Legal means biological or adoptive• Both parents income and other data must be reported

• Regardless of marital status or gender• Higher Education Act Section 475 includes the terms “parent” and “parents” and not gender-specific terms “mother” and “father”

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2014-15 FAFSA and FAFSA on the Web

• New response of “Unmarried and both parents living together” will be included as response option for dependent student’s parents• Same-sex parents who are married under the authority of a state or foreign country who live together will choose this option

• Heterosexual parents who live together and are not married would choose this option

• If option selected, parents will not be presented option of using IRS Data Retrieval Tool

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2014-15 FAFSA

Impact on dependent students only when both of the student’s legal parents are living together-

• but are unmarried,

OR• are of the same sex and in a marriage recognized under state law, but not federal law

Will result in collection of information not previously collected and used in the EFC calculation

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2014-15 FAFSA

• Will result in fair treatment of all families by eliminating longstanding inequities that were based on the legal relationship of the parents (married or not married) rather than on the parents’ relationship with their child

• In most instances there will be less aid eligibility because more income and other financial resources will be included in the EFC calculation

• State, private, and institutional aid administrators will have to determine whether to continue to use the FAFSA calculated EFC or to make adjustments

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2014-15 FAFSA

• No change to unmarried parents not living together• Stepparent information will still be reported when

living with biological/adoptive parentStepparent provision does not apply when the student’s parent is married, under state law, to a person of the same sex who is not the student’slegal parent ***

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2014-15 Parental Change• No impact on independent students• Students in same sex marriage under state law continue

to answer the student marital status question as “single”Consistent with provisions of the Defense of Marriage Act (DOMA)

Income and other information from the student’s same-sex spouse is not collected and used in the calculation of the student’s EFC

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2014-15 FOTW

Will add logic to prevent students/parents from stating that assets exceed the asset threshold and then reporting assets that are less than the threshold

Asset threshold is asset protection allowance from EFC formula

Will increase field lengths for financial questions and EFC on FAFSA and SAR

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FOTW Skip Logic

Depending upon student’s state of legal residence, skip logic will be applied• States that DO NOT allow skip logic-

Colorado, Georgia, Hawaii, Illinois, Ohio, Oklahoma, South Carolina, Washington, Wisconsin, Wyoming, Washington DC

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FOTW Skip Logic Will-

For student who qualifies for Automatic Zero EFCWill give student/parent option to skip untaxed income and asset questions

For student who qualifies for Simplified Needs Test Will give student/parent option to skip asset questions

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If State Allows Skip Logic -

• Applicant will be asked twice….

First - Do you want to skip remaining questions about your and your parents income and assets?

Yes: FOTW is finished

No: Asks untaxed income questions and then again asks if want to skip questions about assets

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Asset Threshold Question

Applicant answers that assets do not exceed threshold

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Asset Threshold Question

Applicant answers that assets exceed threshold

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Verification Selection

CPS applies risk model to FAFSA data Goal is to target verification based upon most error prone data items specific to an applicant

Non-selected applicants are again subject to risk model when submitting corrections

Corrections flagged as PJ are not subject to verification edits

Adding/deleting a school code can trigger a verification selection

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2014-15 Verification

Federal Register Notice 06/13/13

One new required verification item for 14/15 Other Untaxed Income from FAFSA questions 45 & 94

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2014-15 Verification

• ED will not publish a Verification Worksheet• Use suggested text that will be provided in upcoming IFAP Electronic Announcement

• IRS request instructions attached to DCL GEN-13-16 Do not send families to IRS office to request transcript

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2014-15 Verification

Verification Tracking Groups• V1 – Standard Verification• V3 – Child Support Paid Verification• V4 – Custom Verification• V5 – Aggregate Verification• V6 – Household Resources Verification

DCL GEN-13-16

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V1– Standard 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 Number of Household Members Number in College Supplemental Nutrition Assistance Program (SNAP – Food

Stamps if included on ISIR Child Support Paid if included on ISIR20

V1—Standard Non Tax Filers

Income Earned from Work Number of Household Members Number in College Supplemental Nutrition Assistance Program (SNAP-

Food Stamps) if included on ISIR Child Support Paid if included on ISIR

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V3—Child Support Paid

Child Support Paid by the student (or spouse), the student’s parent, or both

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V4—Custom

High School Completion Status Identity/Statement of Educational Purpose Supplemental Nutrition Assistance Program

(SNAP-Food Stamps) if included on ISIR Child Support Paid if included on ISIR

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V5—Aggregate

High School Completion Status Identity/Statement of Educational Purpose

AND All items indicated in V1

Tax Filer Non-Tax Filer

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V6 – Household Resources

Other untaxed income on 14/15 FAFSA• Payments to tax-deferred pension and savings (Questions 45a and

94a) • Child support received (Questions 45c and 94c) • Housing, food and other living allowances paid to members of the

military, clergy and others (Questions 45g and 94g) • Veterans noneducation benefits (Questions 45h and 94h) • Other untaxed income (Questions 45i and 94i) • Money received or paid on the applicant’s behalf (Question 45j)

AND• All items indicated in V1

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Verification Exclusions

No Verification RequiredStudent diesStudent receives no Title IV aidStudent eligible only for unsubsidized aidTransfer student who completed verification at

previous school and current school can obtain certification with ISIR transaction number from previous school

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Verification Exclusions

Verification of parental information not required-Parents cannot be reached by normal means of

communicationBoth parents are mentally incapacitated

Verification of student’s spouse’s information not required-Spouse is deceasedSpouse is mentally incapacitatedSpouse cannot be reached by normal means of

communication

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Verification & Professional Judgment

Regulation requires that all applicants selected for verification must complete verification before any PJ adjustments to FAFSA are made

Refers to HEA section 479A(a) Statement must be included in school’s written

policies and procedures about verification

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2014-15 IRS Data Retrieval

IRS Data Retrieval will populate on FOTW-• Adjusted Gross Income• U.S. Income Tax Paid• Untaxed Portions of IRA Distributions• Untaxed Portions of Pensions• IRS Deductions and Payments• Tax Exempt Interest Income• Education CreditsSchool must have code 02

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2014-15 IRS Data RetrievalCANNOT BE USED when-

• Married independent student and spouse filed separate tax returns

• Married parents of dependent student filed separate tax returns

• When dependent student’s parents are unmarried and living together

• When student or parent had marital status change after 12/31/13

• When student, spouse, or parent filed an amended tax return – 1040X

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Acceptable DocumentationFor Items on 2013 Tax Return

• Information obtained through IRS data retrieval on FOTW

IRS Request Flag value of 02

OR one of the following--• Tax Return transcript obtained from the IRS

Use matrix posted to IFAP on XXXXX• Record of Account Transcript obtained from the IRS• Return Transcript for Taxpayer (RTFTP) obtained

from the IRS

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From Program Integrity Q&A

Question-

What if school has both IRS data retrieval information and the IRS Tax Return Transcript?

Answer-

If any “per computer” amount on Tax Return Transcript differs from data retrieval amount by $25.00 or more, ISIR must be corrected.

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2014-15 Verification

When is collection of a paper 2013 tax return acceptable?

• Amended tax return was filed• Victim of IRS identity theft• Filed non-IRS income tax return

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Amended Tax Returns

Acceptable documentation• Signed copy of the amended tax return (1040 X) that

was filed

AND• Either a copy of the original tax return that was filed,

an IRS tax return transcript, an IRS Record of Account Transcript, or a Return Transcript for Taxpayer (RTFTP)

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Victims Of Identity Theft

Collect a signed copy of the paper 2012 tax return that was filed AND a copy of IRS Form 14039 “Identity Theft Affidavit”For taxpayer who does not have IRS Form 14039, collect

either— A signed and dated statement indicating tax filer was

victim of IRS identity theft and that IRS is investigating. Must include certification that taxpayer did file IRS

Form 14039 and did not keep copy OR was not required to file such form

OR A copy of a police report related to identity theft filed by

the tax filer

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Rollover On Tax Return

IRS data retrieval will populate ISIR with untaxed income You must collect- Written statement from tax filer indicating the

amount of the distribution that was excluded because it was an IRS authorized rollover

OR Signed and dated notation indicating “Rollover” on

IRS Tax Return Transcript

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Taxpayer Has IRS ExtensionVerification is complete if you have --

– Documentation of IRS extension for tax year 2012 &– 2012 W-2 Forms or statement from self-employed individual

School may require an individual granted a tax filing extension to provide a copy of their completed and signed tax return when filed

If school receives a copy of the return, it MUST verify AGI and taxes paid

If school does not receive copy, may return all funds disbursed

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IRS Tidbits

Changing “income earned from work” will NOT change the IRS data flag

IRS flags do NOT indicate who made change to data item

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Acceptable Documentation

Income earned from work for non-tax filerSigned statement by earner certifying that he/she is

not required to file an income tax return for 2012 Documentation of sources and amounts of income-

W-2 FormSigned statement

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2014-15 Change for Non Tax Filers

• Non tax filers are those individuals who state that they will not file a tax return for 2013 and are not required to file a tax return for 2013.

• School must make sure person not required to file using IRS rules

• W-2 is required but if cannot be provided, school may accept signed statement certifying-

• Amount of income earned from work• Source of income earned from work• Reason why W-2 is not available in timely manner

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2014-15 Change for Non Tax Filers

• If school doubts claim that did not file tax return for 2013, school MUST require IRS “Verification of Nonfiling”• Request using IRS Form 4506-T, box 7

IRS will not provide until after 6/15/14

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Acceptable Documentation

Child Support Paid - if reported on the FAFSAStatement signed by child support payor or spouse-

• Amount of child support paid• Name of the person to whom child support was paid and

• Name of the children for whom child support was paid

New for 14/15 - Schools may accept records of electronic payments as documentation that child support payments were made

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Acceptable Documentation

SNAP - Supplemental Nutrition

Assistance Program (Food Stamps)

- if receipt is indicated on the 2014-15 FAFSADocumentation from the agency that issues the Food

Stamps benefit or signed statement from parent/student that someone in FAFSA household received benefit in calendar year 2011 or 2012

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From Program Integrity Q&AWhat should be done when FAFSA/ISIR does not reflect receipt of SNAP benefits, but verification documentation does reflect receipt? Three Part Answer

a) If student qualified for simplified needs test or automatic zero EFC without receipt of SNAP, no change to ISIR is required.

b. If student could not have qualified for simplified needs test or automatic zero EFC because of income, no change to ISIR is required.

c. If after verification, it is determined that receipt of SNAP on ISIR will benefit student, school must change ISIR to reflect receipt.

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Acceptable Documentation

Number in HouseholdSigned statement

• Includes name, age, and relationship to applicant

New for 14/15 dependent students• Must include both of dependent’s student legal

(biological or adoptive) parents if parents live together, regardless of marital status or gender of parents

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Exceptions to Household Size Verification

For dependent student when parents marital status is–separated or unmarried (single, divorced, or widowed) and family size on the FAFSA is 2

–married and family size on the FAFSA is 3

For independent student who is–separated or unmarried (single, divorced, or widowed) with the family size on the FAFSA is 1

–married and the family size on the FAFSA is 2

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Acceptable Documentation

Number in College• Signed statement

• Name and age of each household member who is/will attend eligible postsecondary educational institution as at least a half-time student in award year

• Name of the eligible institution(s) that each household member is or will be attending during award year

Not required if applicant is only member in college

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High School Completion Status

• High School Diploma• Copy of high school diploma• Copy of final high school transcript showing date completed secondary school education

• Recognized Equivalent of High School Diploma• GED certificate• State certificate received after passing state authorized exam recognized by state as equivalent of high school diploma

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High School Completion Status

• Recognized Equivalent of High School Diploma• Academic transcript showing successful completion of at least a two year program acceptable for full credit toward a bachelor’s degree

• For associate degree or higher, documentation showing the student did not graduate from but excelled academically in high school and meets all formalized, written admissions policies of postsecondary school

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High School Completion Status

• Homeschool• Transcript or equivalent signed by parent/guardian that lists secondary school courses completed and documents successful completion of secondary school education

• Secondary school completion credential for homeschool

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2014-15 Change For High School Completion Status• If school has obtained acceptable documentation of

student’s high school completion status prior to verification selection in Group V4 or V5, that documentation does not need to be obtained again

• High completion in a foreign country If student cannot provide copy of diploma or transcript,

school may accept copy of “secondary school leaving certificate” or other similar document obtained through appropriate government agency in country where high school was completed (ex: Ministry of Education)

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Identity/Educational Purpose

Documentation of identity/statement of educational purpose• Appear in person and present to an institutionally

authorized individual--• A valid government-issued photo identification (driver’s license, non-driver’s license, military identification, or passport); and

• A signed statement of educational purpose

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Identity/Educational Purpose

Documentation of identity/statement of educational purpose • If unable to appear in person, must provide the

institution• A copy of a valid government-issued photo identification (driver’s license, non-driver’s license, or passport); and

• An original notarized statement of educational purpose signed by the applicant

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Identity/Educational Purpose

Documentation of identity/statement of educational purpose • School must maintain, an annotated copy of the

identification submitted by the applicant that includes

• The date documentation was received; and • The name of the institutionally-authorized individual that obtained the documentation

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2014-15 Change Identity/Statement Of Educational Purpose• School must obtain ORIGINAL, signed statement of

educational purpose• May convert to electronic record after examination for

accuracy and completeness, for record retention purposes

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V1 and V5 Auto Zero EFC

Dependent studentsParents’ adjusted gross income if tax filersParents’ income earned from work if not tax filersReceipt of SNAP benefits if receipt qualified

student for auto zero EFC

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V1 and V5 Auto Zero EFC

Independent StudentsStudent and spouse’s adjusted gross income if

tax filersStudent and spouse’s income earned from work

if not tax filersNumber of household membersReceipt of SNAP benefits if receipt qualified

student for auto zero EFC

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Updating

• FAFSA information is generally considered a snapshot

• Must update for –• Dependency status changes (all applicants, anytime unless marital status of applicant changes)

• Household size and number in college for selected applicants at time of verification

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Updating For Marital Status

You may require updating due to change in applicant’s marital status if you determine update is necessary to address inequity or accurately reflect ability to pay and

• Student is selected for verification

OR• Marital status change results in dependency status change

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Student’s Marital Status Changes

Students use FAFSA on the Web to update their marital status after submission of FAFSA EFC will not be calculated & Reject 21 gets set Only an FAA can override the reject Instructions have been modified to the following –

“Report your marital status as of the date you sign your FAFSA. If your marital status changes after you sign your FAFSA check with the financial aid office at the college.”

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Student’s Marital Status Changes

When you allow an update for change in marital status, you must update all information to be consistent with the updated marital status Dependency status, adding or excluding spouse’s

income and assets, and adding or excluding parental information

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Verification & Interim Disbursements

For 2012-13 and forward• Interim disbursements may be made without receipt

of corrected ISIR if completed verification makes no change to aid eligibility

• However all required corrections must be submitted to CPS and school must receive revised ISIR transaction

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Verification Completed After Enrollment Has Ended

Student no longer limited to lesser Pell award if verification completed after enrollment ends Student would receive Pell payment based

upon correct EFC

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From Program Integrity Q&A

Question-

May a school disburse unsubsidized aid before completing verification when student has eligibility for subsidized aid?

Answer-

Yes, a disbursement of unsubsidized aid may be made, but the subsidized aid must be included as estimated financial assistance in determining eligibility. And once verification is complete, make sure no overaward exists.

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I would appreciate if you would take the time to submit an evaluation of my sessions electronically at the site below.

http://s.zoomerang.com/s/JamieMalone

You may also send an email to joann.borel@ed.gov

Thanks, Jamie

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QUESTIONS?

Jamie A. Malone

Training Officer

U.S. Department of Education

312-730-1528

jamie.malone@ed.gov

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