Verification

Nebraska Association of Student Financial Aid administrators

Verification

▪ Process of verifying accuracy of Free Application for Federal Student Aid (FAFSA) data

▪ Regulations define:– Whose application must be verified– FAFSA information to be verified– Documentation that may be used to verify data elements

▪ Regardless of verification selection, must always resolve discrepancies and conflicting information

Topics

▪ Whose application must be verified

▪ Quality Assurance (QA) Program requirements

▪ Verification tracking groups and FAFSA information to be verified

▪ Acceptable documentation

▪ Data element corrections

▪ Data element updates

▪ Verification status codes

▪ Interim disbursements

▪ Verification Time Frames

▪ Policies and Procedures

Whose Application must be verified?

▪ Applications can be selected for verification in one of two ways:– By the Central Processing System (CPS) during application

processing, based on predetermined criteria and/or random selection; or

– By the Institution, based on its own verification policies

▪ Verification Exclusions– Although an applicant may be CPS selected, certain applicants

and FAFSA information are excluded from verification as long as the institution does not have conflicting information or have reason to believe information is inaccurate.

Verification Selection Process

▪ Customized Approach

▪ Data elements selected each award year

▪ FAFSA information that must be verified:– Will vary from applicant-to-applicant– May be information that is not used in calculating applicant’s

expected family contribution (EFC)

Required Verification Data Items

▪ Adjusted Gross Income (AGI) – tax filers

▪ Income earned from work – nontax filers

▪ U.S. income tax paid

▪ Untaxed income from tax return – tax filers– Individual Retirement Account (IRA) untaxed distributions,

deductions, and payments– Untaxed portions of pension and annuity distributions– Education tax credits (American Opportunity Tax Credit and

Lifetime Learning Tax Credit)

Required Verification Data Items

▪ Other untaxed income from FAFSA– Payments to tax-deferred pension and savings plans– Child support received– Housing, food, and other living allowances paid to members of

the military, clergy, and others– Veterans noneducation benefits– Other untaxed income– Money received or paid on the student’s behalf

Required Verification Data Items

▪ Resources or benefits not reported on FAFSA– Supplemental Nutrition Assistance Program (SNAP) benefits– Child support paid– Household size– Number in college– High school completion status– Identity/Statement of Educational Purpose

Verification Tracking Groups

▪ For 2015-16, Central Processing System (CPS) selected applicants are assigned to one of five verification tracking groups

▪ Each tracking group determines items to be verified and required documentation

Items Verified Using Internal Revenue Service Data Retrieval Tool (DRT) or Tax Transcript

▪ AGI

▪ U.S. income tax paid

▪ Untaxed portions of IRA distributions

▪ IRA deductions and payments

▪ Untaxed pension and annuity distributions

▪ Tax-exempt interest income

▪ Education tax credits

Documentation and Signature Requirements

▪ Review handout:

Verification of Foreign Income

▪ Foreign income must be included in FAFSA, even if it cannot be taken out of country in which it was earned

▪ Earned foreign income and taxes paid to a central foreign government are treated in same manner as U.S. income and taxes paid

▪ A foreign tax return is considered equivalent to IRS Form 1040

Alternative Documentation Cases

▪ Tax extensions

▪ Amended tax returns

▪ Government cannot locate tax account information

▪ Residents of Republic of the Marshall Islands, Federated States of Micronesia, and Palau

▪ Inability to obtain a tax return transcript

▪ Separating income on joint tax returns

Verification Corrections

▪ Changes to data elements that were incorrect at time of application

▪ If data are correct as reported and valid Institutional Student Information Record (ISIR) or Student Aid Report (SAR):– Pay Federal Pell Grant, Iraq and Afghanistan Service Grant,

Federal Supplemental Educational Opportunity Grant, Teachers Education Assistance for College and Higher Education Grant, and Federal Perkins Loan

▪ If data correct as reported and valid ISIR/SAR– Employ students under Federal Work-Study (FWS)– Originate and disburse Federal Direct Student Loans (Direct

Loans)

Verification Updates

▪ Number in household and number in college:– If not selected, cannot update for changes occurring after original

application filed– If not selected, institution is not required to monitor data element

changes– Institution may select applicants if it believes data elements are

inaccurate– May require student to update dependency status, household

size, or number in college if change results from change in student’s marital status

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

Verification Policies and Procedures

▪ Must:

▪ Be written

▪ Address school options where flexibility exists

▪ Be made clear to all students

▪ Be consistently applied