Verification Virginia Hagins U.S. Department of Education Session FF-07

2 What Is Verification? Process by which certain required data reported on the FAFSA is reviewed for accuracy and completeness  To protect taxpayer dollars and program integrity

3 Required Policies & Procedures Applicant’s responsibilities Clear explanation of documentation requirements Deadlines for student to provide documentation and consequences of failure to meet deadlines Method by which student is notified of award changes resulting from verification Procedures for correction of FAFSA data Procedures for referring overpayments to ED

4 Notice To Selected Students School must provide a written statement providing a clear explanation of the documentation requirements and the applicant’s responsibilities with regard to the verification process

5 How Are Applicants Selected? CPS selection  Edits that identify inconsistencies and potential errors  Random School selection  Criteria determined by school

6 Verification Exclusions Student is incarcerated Student is recent immigrant – either calendar year of award year Student is deceased Student is Pacific Island resident Spouse/parent unavailable  Physical or mental incapacity  Lives in foreign country and cannot be reached through normal means of communication

7 How Many Must Be Verified? Selected by the CPS  General requirement to verify all those selected by CPS BUT  May stop at 30% of your applicant pool, if CPS selects more than 30%

8 30% Verification Option No school is required to verify more than 30% of its total number of Title IV applicants School must define total number of Title IV applicants Could be total number of students who  Apply to the school  Enroll at the school  Receive Title IV aid  Have an ISIR received by the school

9 What Data Must Be Verified? Required for CPS-selected applicant  Adjusted Gross Income (AGI)  U.S. Income tax paid  Household size  Number in college  Certain untaxed income and benefits

10 What Data Must Be Verified? Certain untaxed income and benefits  Social Security benefits  Child support  IRA/Keogh deductions  Foreign income exclusion  Earned Income Credit  Interest on tax-free bonds

11 What Data Must Be Verified? School selected applicants  School determines data elements to be verified  No requirement to verify same data elements as CPS selections

12 What Documents Are Needed? For taxable income, base year tax return For untaxed income and benefits:  Verification Worksheet  Official agency documentation  Signed statement See FSA Handbook

13 Completing The Process Compare the verification documents with the original FAFSA information  May create own checklist/spreadsheet  May use verification tool on FAA Access Determine that  information is correct or  corrections must be made May use tolerance option if all errors are dollar amount errors

14 Tax Return Filed? WILL FILE Type of 2007 Tax Return Used 1040 Eligible to File 1040A or 1040EZ? N0 Adjusted Gross Income U.S. Income Tax Paid 3311 Exemptions Claimed 03 Father's Income Earned From Work Mother's Income Earned From Work 0 Total from Worksheet A 0 Total from Worksheet B 0 Total from Worksheet C 0 ISIR Data

15 Tax Return Data

16 Tax Return Data

17 ISIR DataTax Return DataMatch? AGI $45,007$40,227 No Taxes Paid $ 3,311$ 2,601 No Wkst A $ 0 Yes Wkst B $ 0$ 1,500 No Sample Comparison This ISIR requires correction!

18 Verification Status Codes Used when reporting Pell, ACG, SMART and Direct Loan payments to COD  V - Verified  S - Selected, but not verified  W - Paid without Documentation  Blank - ISIR not selected by CPS or school

19 Verification Tolerance No recalculation or reprocessing necessary if  There is no change in non-dollar items used to calculate EFC AND  There is no dollar error in excess of $400 as calculated by the following formula

20 $400 Net Tolerance Option Original Data Total Income  Taxes Paid =Total Corrected Data Total Income  Taxes Paid = Total Compare the two totals: Dollar change amount < or = to $400

21 Interim Disbursements If there is no conflicting documentation For Pell, ACG, National SMART Grant, FSEOG and Perkins  School may make one disbursement for applicant’s first payment period For FWS, student employee may work for a maximum of 60 consecutive days from start of enrollment

22 Interim Disbursements If there is no conflicting documentation For Direct Loan and FFEL  School may certify/originate subsidized loans  School may certify/originate/disburse unsubsidized and PLUS For TEACH Grant  School may disburse

23 Verification Deadline By the earlier of 120 calendar days after student’s last date of enrollment OR date specified in Federal Register  Student must provide all verification documentation  ISIR must be corrected, if necessary

24 Update Applicant Information For all students, must always update dependency status if it changes during an award year* For students selected for verification by CPS, must always update household size and number in college at the time of verification* * Unless the reason is a change in the student’s marital status

25 Remember Conflicting information must be resolved, regardless of verification status Separate process from verification  Involves any information of which the school has knowledge  Must resolve before disbursing any aid

26 Contact Information Your feedback and comments are appreciated. Virginia Hagins Training Officer