1. 2014-15 FAFSA & Verification MAFAA Professional Development Day St. Paul, MN October 29, 2013

2. 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” 2

3. 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 3 3

4. 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 4

5. 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 5

6. 2014-15 FAFSA No change to unmarried parents not living together Stepparent information will still be reported when living with biological/adoptive parent  Stepparent 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’s legal parent *** 6

7. 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 7

8. 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 8

9. 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 9

10. FOTW Skip Logic Will- For student who qualifies for Automatic Zero EFC  Will 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 10

11. 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 11

12. Asset Threshold Question Applicant answers that assets do not exceed threshold 12

13. Asset Threshold Question Applicant answers that assets exceed threshold 13

14. 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 14

15. 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 15

16. 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 16

17. 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 17

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20. 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 ISIR 20

21. 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 21

22. V3—Child Support Paid  Child Support Paid by the student (or spouse), the student’s parent, or both 22

23. 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 23

24. V5—Aggregate  High School Completion Status  Identity/Statement of Educational Purpose AND  All items indicated in V1  Tax Filer  Non-Tax Filer 24

25. 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 25

26. Verification Exclusions No Verification Required  Student dies  Student receives no Title IV aid  Student eligible only for unsubsidized aid  Transfer student who completed verification at previous school and current school can obtain certification with ISIR transaction number from previous school 26

27. Verification Exclusions Verification of parental information not required-  Parents cannot be reached by normal means of communication  Both parents are mentally incapacitated Verification of student’s spouse’s information not required-  Spouse is deceased  Spouse is mentally incapacitated  Spouse cannot be reached by normal means of communication 27

28. 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 28

29. 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 Credits  School must have code 02 29

30. 2014-15 IRS Data Retrieval CANNOT 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 30

31. Acceptable Documentation For 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 31

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33. 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. 33

34. 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 34

35. 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) 35

36. 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 36

37. 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 37

38. Taxpayer Has IRS Extension  Verification 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 38

39. 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 39

40. Acceptable Documentation Income earned from work for non-tax filer  Signed 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 Form  Signed statement 40

41. 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 41

42. 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 42

43. Acceptable Documentation Child Support Paid - if reported on the FAFSA  Statement 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 43

44. Acceptable Documentation SNAP - Supplemental Nutrition Assistance Program (Food Stamps) - if receipt is indicated on the 2014-15 FAFSA  Documentation 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 44

45. From Program Integrity Q&A What 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. 45

46. Acceptable Documentation Number in Household  Signed 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 46

47. 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 47

48. 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 48

49. 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 49

50. 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 50

51. 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 51

52. 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) 52

53. 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 53

54. 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 54

55. 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 55

56. 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 56

57. V1 and V5 Auto Zero EFC Dependent students  Parents’ adjusted gross income if tax filers  Parents’ income earned from work if not tax filers  Receipt of SNAP benefits if receipt qualified student for auto zero EFC 57

58. V1 and V5 Auto Zero EFC Independent Students  Student and spouse’s adjusted gross income if tax filers  Student and spouse’s income earned from work if not tax filers  Number of household members  Receipt of SNAP benefits if receipt qualified student for auto zero EFC 58

59. 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 59

60. 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 60

61. 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.” 61

62. 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 62

63. 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 63

64. 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 64

65. 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. 65

66. 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.govjoann.borel@ed.gov Thanks, Jamie 66

67. QUESTIONS? Jamie A. Malone Training Officer U.S. Department of Education 312-730-1528 jamie.malone@ed.gov 67