1. Carney McCullough and Ginger Klock | Nov. 2012 U.S. Department of Education 2012 Fall Conference Verification Changes for 2013-2014 Session 6

2. Agenda 2012-2013 Overview Hot topics 2013-2014 New verification items and documentation Verification text vs. verification worksheets Verification tracking groups and flags Verification selection 2

3. Information on Verification Program Integrity Final Rules Published on October 29, 2010 Replaces the five verification items for all selected applicants with a targeted selection from items included in an annual Federal Register notice published by the Secretary Institution may select additional applicants or verify additional items for an applicant 3

4. Verification for 2012-2013 4

5. 2012-2013 Verification Items All applicants— Household size Number in college SNAP benefits (formerly food stamps)—if receipt indicated on ISIR Child support paid—if amount indicated on ISIR 5

6. 2012-2013 Verification Items Tax filers— Adjusted gross income U.S. income tax paid Education credits Specific untaxed income items Untaxed IRA distributions Untaxed Pensions IRA deductions Tax Exempt Interest Non-tax filers Income earned from work 6

7. Income Information for Tax Filers IRS Data Retrieval IRS Tax Return Transcript April 16, 2012—Electronic Announcement Until July 15, 2012, may accept signed copy of relevant 2011 tax return August 21, 2012—Electronic Announcement Limited circumstances when a signed copy of relevant 2011 tax return is acceptable 7

8. November 2, 2012 Electronic Announcement For remainder of 2012-2013 award year In instances where the tax filer attempted to request an IRS Tax Return Transcript and was unsuccessful Signed copy of relevant 2011 IRS tax return AND Communication (signed by tax filer) from IRS stating request was unsuccessful –Letter from IRS –Screen shot print AND Completed and signed IRS Form 4506 T-EZ or 4506 T listing institution as third party 8

9. November 2, 2012 Electronic Announcement If there is no reasonable doubt about the accuracy of the paper tax return, maintain copy in student’s file and no further action is required If there is reason to believe the paper tax return is inaccurate, must send IRS Form 4506 T-EZ or 4506 T to IRS and wait for response before verification can be completed 9

10. Amended tax returns If the institution is aware that an amended tax return was filed, to complete verification, the applicant must submit— Signed copy of the relevant tax return or IRS Tax Return Transcript AND Signed copy of the 1040X that was filed with the IRS 10

11. Identity Theft To complete verification for victims of identity theft— Signed copy of IRS income tax return AND One of the following— IRS Form 14039, “Identity Theft Affidavit” Signed, dated statement indicating victim of identity theft and IRS is investigating Copy of the police report filed by the tax filer 11

12. Verification for 2013-2014 12

13. 2013-2014 Verification Verification items— Retained all items subject to verification in 2012-2013 Added two new items— High school completion status Identity/Statement of Educational Purpose 13

14. 2013-2014 Verification Documentation of high school completion status: high school diploma— High school diploma; or Final high school transcript that shows the date the high school diploma was awarded Note: If a copy of an applicant’s high school diploma or final high school transcript is unavailable, the institution may accept alternative documentation. 14

15. 2013-2014 Verification Documentation of high school completion status: recognized equivalent of a high school diploma— General Educational Development (GED) Certificate; State certificate received by a student after the student has passed a State-authorized examination that the State recognizes as the equivalent of a high school diploma; Academic transcript of a student who has successfully completed at least a two-year program that is acceptable for full credit toward a bachelor's degree; or 15

16. 2013-2014 Verification Documentation of high school completion status: recognized equivalent of a high school diploma— For a person who is seeking enrollment in an educational program that leads to at least an associate degree or its equivalent and has not completed high school but has excelled academically in high school, documentation from the high school that the student excelled academically in high school and documentation from the postsecondary institution that the student has met the formalized, written policies of the postsecondary institution for admitting such students 16

17. 2013-2014 Verification Documentation of high school completion status: homeschooled— Transcript or the equivalent, signed by the parent or guardian, that lists the secondary school courses completed by the applicant and documents the successful completion of a secondary school education; or A secondary school completion credential for home school (other than a high school diploma or its recognized equivalent) provided for under State law 17

18. 2013-2014 Verification 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, or passport); and A signed statement of educational purpose 18

19. 2013-2014 Verification Documentation of identity/statement of educational purpose (cont.)— 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 19

20. 2013-2014 Verification Documentation of identity/statement of educational purpose (cont.)— 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 20

21. Verification Text for 2013-2014 No sample verification worksheets Electronic Announcement posted on November 1, 2012 Sample text and format for individual data elements Institutions are able to develop a customized worksheet for individual students or groups of students 21

22. New for 2013-2014 FAFSA information to be verified by the applicant Includes the same verification items that were in place for 2012- 2013 for tax filers and non-tax filers SNAP and Child Support Paid selection criteria process Two additional verification selection items: High School Completion Status Identity/Statement of Educational Purpose 22

23. Verification for 2013-2014 Verification selection process The CPS will continue to set a Verification Flag on the applicant’s ISIR to indicate that the FAFSA was selected for verification New for 2013-2014: Verification Tracking Groups The CPS is adding a process that will place each applicant selected for verification into one of five Verification Tracking Groups The applicant’s ISIR will use the Verification Tracking Flag field to indicate the applicant’s Verification Tracking Group: V1, V2, V3, V4, or V5 23

24. Verification for 2013-2014 New Label for 2013-2014: Verification Selection Change Flag Identifies a transaction that is selected for verification, if the transaction being corrected was not selected for verification previously 24

25. Verification for 2013-2014 Verification Tracking Flag Groups: Verification Tracking Flag Verification Tracking GroupVerification Description V1 Standard VerificationRecord selected because conditions based on statistical analysis error-prone risk model were met V2 SNAP VerificationRecord selected for receipt of SNAP criteria only V3 Child Support Paid VerificationRecord selected for Child Support Paid criteria only V4 Custom Verification GroupRecord selected for Identity criteria only V5 Aggregate Verification GroupRecord selected for Identity criteria and “Standard Verification” criteria Blank Not selected for verification 25

26. Verification Tracking Flag -- V1 for Filers Group V1– Standard Verification, Tax filers Selected based on standard verification criteria -- like 12/13, standard verification items: 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) Child Support Paid 26

27. Verification Tracking Flag -- V1 for Non- Filers Group V1– Standard Verification, Non-filers Selected based on standard verification criteria Like 12/13, standard verification items : Income Earned from Work Number of Household Members Number in College Supplemental Nutrition Assistance Program (SNAP-Food Stamps) Child Support Paid 27

28. Verification Tracking Flag – V2 Group V2 – SNAP Verification Group Not selected based on standard verification criteria, but Student/Parent indicated that someone in the household was receiving Supplemental Nutrition Assistance Program (SNAP- Food Stamps) This was the only thing that made them hit an Auto-Zero EFC 28

29. Verification Tracking Flag – V3 Group V3 – Child-Support Paid Group Not selected based on standard verification criteria, but Students who were selected because the student (or spouse), the student’s parent, or both reported Child Support Paid 29

30. Verification Tracking Flag – V4 Group V4 – Custom Verification Group Not selected based on standard verification criteria, but Applicants selected using the identity verification criteria will verify the following data: High School Completion Status Identity/Statement of Educational Purpose Supplemental Nutrition Assistance Program (SNAP-Food Stamps) Child Support Paid 30

31. Verification Tracking Flag – V5 Group V5 – Aggregate Verification Group Selected based on standard verification criteria, and Selected using the identity verification criteria –High School Completion Status –Identity/Statement of Educational Purpose For Tax Filers –Same as Group V1 For Tax Non-tax Filers –Same as Group V1 Supplemental Nutrition Assistance Program (SNAP-Food Stamps) Child Support Paid 31

32. IRS Data Retrieval Tool Applicants selected for verification – V1-Standard Verification Who transfer their income tax return information unchanged using the Internal Revenue Service (IRS) Data Retrieval To ol – When initially completing the FAFSA using FAFSA on the Web (FOTW) When making corrections on FOTW Are considered to have verified the FAFSA IRS information Adjusted Gross Income, taxes paid, and the applicable untaxed income items and education credits Unless changes were made to the transferred information or institution has reason to believe that the information transferred is inaccurate School only needs to verify # in HH and # in College 32

33. New for 2013-2014--Not Selected Parents’ Marital Status Family Members Number in College Married31 Not Married21 Student’s Marital Status Family Members Number in College Married21 Not Married11 Dependent Students If the applicant would have been selected based on standard verification criteria and Tax return data for the student and parent(s) for a dependent record or for the independent student Retrieved from the IRS and not changed on the FAFSA, Responses to Household Size and Number in College questions seems logical Record will not be selected for verification Logical answers include the following: Independent Students 33

34. Verification for 2013-2014 Verification selection remains the same Initial selection May occur on the original transaction or subsequent correction transaction if the record was not previously selected Subsequent Transactions After Selection Transactions processed after selection will continue to be flagged as selected Subsequent Transactions After Non-Selection Records will be subjected to selection again based on correction behavior 34

35. Communicating with Schools YV3 Selected for Verification Child Support Paid Verification Group 2013-2014 999999999 Auto Zero EFC Flag XXX Rejected Status Change Flag X Duplicate SSN Flag XXX EFC Change Flag XXXXXXXX Verification Selection Change Flag y Address Only Correction X SNT Flag XXX Special Circumstance Flag X SAR C Change Flag X Y Transaction is now selected for verification when the transaction being corrected was not selected 35

36. Communication with Students Current SAR comments: Dependent Student (170) Your FAFSA has been selected for a review process called verification. Your school has the authority to request copies of certain financial documents from you and your parent(s). Independent Student (171) Your FAFSA has been selected for a review process called verification. Your school has the authority to request copies of certain financial documents from you (and your spouse). 36

37. Questions 37

38. Contact Information Carney McCullough Director, Policy Development Group Office of Postsecondary Education Phone: 202-502-7639 E-mail: Carney.McCullough@ed.govCarney.McCullough@ed.gov Ginger Klock Supervisor, Application Processing Division Federal Student Aid Phone: 202-377-3239 E-mail: ginger.klock@ed.govginger.klock@ed.gov 38

39. Verification Resources 6/18/10 NPRM (Pages 34825 – 34834) http://www.ifap.ed.gov/fregisters/FR061810ProgramInterityIs suesNPRM.html http://www.ifap.ed.gov/fregisters/FR061810ProgramInterityIs suesNPRM.html 10/29/10 Final Rule (Pages 66902 – 66913 and 66954 – 66958) http://www.ifap.ed.gov/fregisters/FR102910Final.html Federal Register Notice of Information To Be Verified for the 2012–2013 Award Year http://www.ifap.ed.gov/fregisters/FR071311FAFSAInformatio n.html http://www.ifap.ed.gov/fregisters/FR071311FAFSAInformatio n.html 39

40. Verification Resources GEN-11-13 and GEN-11-03 http://www.ifap.ed.gov/dpcletters/GEN1113.html http://www.ifap.ed.gov/dpcletters/GEN1103.html http://www.ifap.ed.gov/dpcletters/GEN1113.html http://www.ifap.ed.gov/dpcletters/GEN1103.html Q&A on Program Integrity website: http://www2.ed.gov/policy/highered/reg/hearulemaking/2009/ verification.html http://www2.ed.gov/policy/highered/reg/hearulemaking/2009/ verification.html Sample 2012-2013 Verification Worksheets http://www.ifap.ed.gov/eannouncements/020312SampleVerifi cationWorksheets1213.html http://www.ifap.ed.gov/eannouncements/020312SampleVerifi cationWorksheets1213.html 40

41. Verification Resources FAFSA-IRS Tax Return Transcript Matrix http://www.ifap.ed.gov/eannouncements/031612FAFSA1213Verifi cationIRSTaxReturnMatrix.html http://www.ifap.ed.gov/eannouncements/031612FAFSA1213Verifi cationIRSTaxReturnMatrix.html 2012-2013 Application and Verification Guide http://www.ifap.ed.gov/fsahandbook/attachments/1213AVG.pdf GEN-12-07—Acceptable Documentation for Income and Taxes http://www.ifap.ed.gov/dpcletters/attachments/GEN1207.pdf 41

42. Verification Resources 2012-2013 Electronic Data Exchange (EDE) Technical Reference http://www.ifap.ed.gov/edetechref/ 010612EDETechRef1213Jan 12Update.html http://www.ifap.ed.gov/edetechref/ 010612EDETechRef1213Jan 12Update.html 2012-2013 ISIR Guide http://ifap.ed.gov/isirguide/attachments/1213ISIRGuideDec2011.pdf Electronic Announcement on Acceptable Documentation Update for 2012-2013 Award Year Verification http://ifap.ed.gov/eannouncements/110212AwardYrVerAcceptDocs. html http://ifap.ed.gov/eannouncements/110212AwardYrVerAcceptDocs. html 42

43. Verification Resources Electronic Announcement on Acceptable Documentation for Verification of 2011 IRS Information http://www.ifap.ed.gov/eannouncements/072012Acceptable Documentation4Verification2011IRSInfo.html http://www.ifap.ed.gov/eannouncements/072012Acceptable Documentation4Verification2011IRSInfo.html Electronic Announcement on Limited Circumstances When a Signed Copy of a Tax Return or Other Documentation is Acceptable for Completing Verification http://www.ifap.ed.gov/eannouncements/082112LimitedCircumst ances WhenSignedCopyofTaxReturnisAcceptable.html http://www.ifap.ed.gov/eannouncements/082112LimitedCircumst ances WhenSignedCopyofTaxReturnisAcceptable.html 43

44. 2013-2014 Verification Resources Federal Register notice published 7/12/2012 Dear Colleague Letter GEN-12-11 http://www.ifap.ed.gov/dpcletters/GEN1211.html Electronic Announcement on Plans for 2013-2014 Verification Worksheets http://ifap.ed.gov/eannouncements/110112Plansfor1314Verification Worksheets.html http://ifap.ed.gov/eannouncements/110112Plansfor1314Verification Worksheets.html For related operational details, please attend: Session 26 – FAFSA and Application Processing Update 44