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Verification

Fall 2008NCASFAAWinston-SalemEmily Bliss and Kathy Fritz

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Objectives

Define verificationOutline Federal RequirementsDescribe processing proceduresDiscuss how to submit corrections

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What is Verification

The process of checking information filed on the FAFSA against source documents

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When to verify

When selected by the CPS edits If QA school, your school determines student

edits If you have questions regarding a student’s

FAFSA information You are only required to verify 30% of the

student aid application population Some schools verify 100%, it is not necessary

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When Not to Verify

Student is not selected, unless you have questions

Death of a student Parents or spouse (if independent) unavailable Pacific Island resident Applicant verified by another school Student does not receive aid due to other

ineligibility issues Student is incarcerated Student is a recent immigrant

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Policy and Procedures

A verification policy is required and must include:Deadlines for submission and

consequences of failure to submit.A method of notifying students of award

changes due to verification.Required correction procedures for

students.Standard procedures for referring

overpayment cases to the Department.

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Policy and Procedures

A written statement must be provided to the verified student explaining:Documents required for verificationStudent responsibilitiesNotification methods—how the school

notifies a student if the award changes as a result of verification and the expected timeframe for such changes

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Verification vs. Conflicting Information

Verification includes specific elementsConflicting information is anything that

does not agreeVerification often brings to the surface

conflicting informationIf over COA you do not have to verify or

resolve conflicting information

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Required Verification Elements

AGI Taxes Paid Number in household/college Exemptions on tax returns Certain untaxed income and benefits

Child support IRA deductions Social Security Benefits EIC

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How to Process

Create a certification worksheetReview procedures each yearInclude everyone who has a stake in itCheck for any updates from NASFAA or

the Department of Ed.Create your own or use the federal

verification worksheet found at: www.ifap.ed.gov.

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Required documents

A copy of the student and/or parent’s signed Federal tax return in order to verify AGI, taxes paid, etc, credit for retirement contribution, education credit Note which form student or parent filed and if they

were eligible to file that particular form. The form must be signed by either the filer or be

stamped by the preparer along with their SSN or Preparer Tax ID Number. It must also contain the preparer’s name.

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Required Documents

Verification worksheets are not required but highly recommended. (personal note: I would not want to try to explain a verification without a worksheet)

Signed statements are acceptable for many of the verification elements.

All documentation must be signed, including any form of tax information submitted.

Documents are submitted to the financial aid office, not the Department of Education.

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Required Documents

If no Federal Tax return is available the following may be used: Tax transcript ordered by calling the IRS at

1.800.829.1040 If no copy can be provided by the IRS, a W-2 may

be used in addition to a signed statement by the filer certifying that the information is correct.

If a family does not file, make sure they were not required to file. It cannot be their choice.

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Non-Filers

If a tax return was not required to be filed, only earned income should be reported.

Earned income is not reported as untaxed income, it is reported as wages on the FAFSA.

A signed statement or signed verification is accepted to verify income for students or parents who did not and were not required to file.

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Now that you have the documents, what next?

Match figures to the tax return to the FAFSA and resolve any discrepancies.

Note differences on the verification worksheet.

The parent or student is usually the party required to provide explanation for differences between source documents and the FAFSA.

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Number in HouseholdDependent Students

Student and Parents Include the parents, even if the student does not

live with themExclude appropriate parent if separated or

divorced Include Step-parents

Student’s siblings If over 50% of support is received from parents,

they are included

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Number in HouseholdDependent Students

Unborn children can be included in household

Foster children are not included in household size but neither is stipend for supporting foster children

Usually, do not include graduate students as they are considered independent. Parents may verify they still provide half of the support. If so, they may be included

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Number in HouseholdIndependent Students

Independent Students Include student and spouseStudent’s children

If more than half of support is provided by the student during the academic year

Unborn childrenDo not include foster children

Other people If the student provides more than half of the

support during the award year

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Number in CollegeDependent Students

Always include the applicantParents are not included but may be added

on a documented professional judgmentOthers considered as in the household, if

they are enrolled at least half time in an eligible degree or certificate program

Cannot include students enrolled at a military academy

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Number in CollegeIndependent Students

Always include the student applicant andOthers they support who may be enrolled in

an eligible degree or certificate program at a Title IV school.

Do not include students enrolled at a U.S. military academy.

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Your obligations

To know whether a person is required to file a tax return Did they earn enough to require filing

To know the correct filing status Head of household, married filing jointly, etc

To know a person cannot be claimed as an exemption more than once.

Keep a copy of IRS Publicaiton 17 next to you as well as a copy of the various filing guides for specific IRS tax forms during verification season and then use it.

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Verification Tolerance

If total change to dollar values is less than $400, then you do not have to send changes.

There is no tolerance for errors in non-dollar items.

This may be different if you are in the Quality Assurance Program.

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How to Complete

Check all required verification elements.Complete every block or line on

verification certification worksheet.Update elements either using your

software system or directly through the CPS.

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Paying aid if verification not complete

You can pay one disbursement of Pell, SEOG, and Perkins without completing verification.

A student can work up to 60 consecutive days of FWS if verification has not been completed.

You can certify and originate a loan but you cannot make any loan disbursements without a corrected ISIR.

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Verification after Disbursements

If a students is selected on a subsequent ISIR after awarding, you must complete the verification and make appropriate adjustments.

This is a little easier to handle if you can convince the parents and student it was their mistake that caused the adjustment.

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Verification Status Codes

V = verifiedAt UNCW, we change from S to V when we

send the change but keep a hold on our packaging until the change comes back

W= paid one disbursement without verification

S = selected, not verified. This can happen if 30% had been reached, QA school, student not eligible

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Quality Assurance

If a school chooses to participate in the Quality Assurance Program, several steps must be taken. http://ifap.ed.gov/qahome/Default.html

Schools determine their own verification edits.

All verification corrections must be sent to CPS.

Extra reports must be completed.

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Resources

FSA HandbookCFR 34.668IFAP.ed.gov