1. MAKING WAVES: ALL ABOUT VERIFICATION 2015 DE-DC-MD FALL CONFERENCE Vicki A. Smith Director Student Financial Aid Programs Allegany College of Maryland November 11, 2015

2. WHAT WE’LL “SEA” TODAY WHAT HAPPENED - 2015-2016 WHAT IS HAPPENING – 2016-2017 WHAT’S GOING TO HAPPEN – 2017-2018

3. 2015-2016 FSA ID went live Verification Tracking Groups: – V1 – Standard – V3 – Child Support Paid – V4 – Custom – V5 – Aggregate – V6 – Household Resources Groups V4 and V5: – Remember to report outcomes on FAA ACCESS. – Your school is NOT exempt from reporting a code for students who may never enroll at your school. – ED does not store a listing of the records we enter, so they recommend we print a copy of the page/report each time and keep it for our records.

4. 2015-2016 V6 – Household Resources We must collect a copy of all W-2 forms for all persons in the household resources group, including tax filers who use the DRT process and for those who acquired a tax transcript; we must have the W-2s for all those whose financial information appears on the FAFSA. Child Support Paid New for 15-16 - schools must collect both the name(s) and age(s) of any child for whom child support was paid when that item is verified. The statement must have: – Amount of child support paid – Name of person who paid the child support – Name of the person to whom child support was paid – Names and ages of the children for whom child support was paid

5. 2015-2016 UNACCOMPANIED HOMELESS YOUTH Must meet the 3-part definition: – Must be homeless (or Self-supporting and at risk of being homeless) (do not have fixed, regular, or adequate housing) – Must be Unaccompanied (not living with a parent or guardian) – Must be a Youth (under 21)

6. 2015-2016 UNACCOMPANIED HOMELESS YOUTH, Contd. School district liaisons cannot make determinations for continuing college students since these students are no longer in high school and are no longer receiving services under the McKinney-Vento Act. But, FAAs can use information from the high school district as supporting documentation during their decision making process. This from 2015 NASFAA Conference. (Verified by Cyekeia Lee)

7. 2015-2016 UNACCOMPANIED HOMELESS YOUTH, Cont. GEN 15-16 – Institutions are not required to verify the answers to the homeless questions on the FAFSA. However, in instances where the school has conflicting information, a documented phone call or written statement form the relevant authority is sufficient (doesn’t matter if we agree with that determination). – If the student asks an FAA to make the determination, we are required to make it! If there is no written documentation to support the student’s claim, then we must make the determination based on a documented interview with the applicant.

8. 2015-2016 FOSTER CHILDREN – Can be counted in the household if no benefits are provided by an outside agency or those benefits do not cover more than half of the foster child’s total care. VERIFICATION OF STUDENTS ELIGIBLE FOR UNSUBSIDIZED TITLE IV PROGRAMS IS NOT REQUIRED (Revision of 7.7.15).

9. 2015-2016 2 MID-YEAR CHANGES 1.Victims of Identity Theft (7.7.15) Collect a copy of the Tax Return DataBase View Transcript; and Collect a signed and dated statement from the tax filer stating he/she was a victim of IRS-related identity theft and that the IRS has been made aware of this situation. Schools completing verification prior to July 7, 2015 are not required to go back and collect the signed statement.

10. 2015-2016 2 MID-YEAR CHANGES 2. Amended Tax Return Filers (8.13.15) An IRS Tax Return Transcript (that does not have to be signed) OR any other IRS tax transcript that includes all the income and tax information from the original tax return required for verification; and A signed copy of the IRS Form 1040X that was filed with the IRS.

11. 2015-2016 IRS DRT: Cannot use if: – Filed a foreign tax return – Married filing separately – Change in the marital status as of 12.31.14 – Unmarried persons living together – Tax filer filed an Amended Tax Return (fafsa.gov asks this; not on paper FAFSA)

12. IRS TAX ADVOCATE 1-877-777-4778 WWW.IRS.GOV/ADVOCATE

13. 2015-2016 ELECTRONIC ANNOUNCEMENT – 10.2.15 – Update to Acceptable Documentation for those Selected for Verification. For those who filed 2014 taxes but cannot obtain a transcript from the IRS, for the remainder of this academic year, we can accept a signed paper copy of the 2014 IRS Tax Return to verify income and other tax related information, with these important caveats:

14. -Had to use one of the official IRS processes to request the transcript. -A signed statement from the tax filer that certifies the tax return submitted to the school includes the exact same information as was submitted to the IRS. -Tax filer must provide the school with proof that the IRS was unable to provide the transcript – -Online Tool – signed and dated copy of the screen shot from the official IRS web page showing the unsuccessful message. -Requested a transcript using Form 4506-T-EZ or Form 4506-T – submit a copy of the IRS response mailed to the tax filer. This also must be signed and dated.

15. -A completed and signed Form 4506-T-EZ or Form 4506-T that includes on LINE 5 the name, address, and phone number of the school as the 3 rd Party to whom the IRS is to mail the transcript. -Schools should continue verification process and simply retain the IRS Form and not submit it to the IRS. However, if the school questions the accuracy of the information on the signed paper tax copy, the school must submit the Form and wait for the IRS to return the tax transcript or confirmation that one is not available before completing verification. -The unavailability of the “Online” transcript tool DOES NOT count as a reason to accept a paper copy.

16. 2016-2017 Draft 2016-2017 FAFSA posted on 10.29.15. EFC Formula Guide Posted – Auto 0 EFC increased to $25,000. GEN 15-11 – Guidance Needed for Verification – Suggested text coming soon! – Same as 2015-16, except that V3 – Child Support Paid - has been eliminated. – Still have to verify it if it was paid in any other group.

17. 2016-2017 NEW THIS YEAR: An applicant may be moved from a previously assigned group V1, V4, or V6 to Group V5 as a result of corrections made to the ISIR. If the VTG changes to V5, no disbursement of any Title IV aid can be made until verification of the new group items is complete. If disbursement has already been made prior to the school’s receipt of the new ISIR marked as changed V5 VTG AND the student does NOT complete verification, the school is NOT liable for the previously disbursed funds. HOWEVER, THE STUDENT IS LIABLE FOR THE FULL AMOUNT ALREADY DISBURSED. Information on how we are to report this is coming soon…. For applicants moved to V5, don’t have to re-verify already verified items; just the new items in V5 Group not already verified.

18. 2016-2017 CHANGES TO ACCEPTABLE DOCUMENTATION Income Information for Non-IRS tax filers – Must now submit a copy of the tax transcript Income Information for Non-IRS Non-tax filers – (foreign income persons) – Must now submit copies of all wage and/or tax statements and a signed statement identifying all of the person’s income and taxes.

19. 2016-2017 CHANGES TO ACCEPTABLE DOCUMENTATION Income information for tax filers and non-tax filers – Must now submit copies of all W-2 forms, signed statement that tax filer did not retain copy, and IRS statement saying tax return can’t be located. Child Support Paid – Cannot accept separation or divorce decree as proof of amount paid.

20. 2016-2017 CHANGES TO ACCEPTABLE DOCUMENTATION Victims of IRS Tax-related Identity Theft – Signed and dated statement saying person was victim of identity theft and that IRS has been notified, and a Tax Return Database View transcript. – If this cannot be obtained, another official IRS transcript with all income and tax information on it can be accepted.

21. 2016-2017 CHANGES TO ACCEPTABLE DOCUMENTATION Tax filers who filed an Amended tax return – IRS Tax Return transcript and a signed copy of Form 1040X. High School Completion Status – cannot accept self-certification or copy of DD214. Identity/Statement of Educational Purpose – document cannot be expired.

22. 2016-2017 HOPEFUL IRS DRT ENHANCEMENTS! – Expand those who can use it – Use to confirm non-tax filing status – More leniency to access – Expand to include W-2 information and all tax lines ASSET PROECTION ALLOWANCE IS DROPPING AGAIN! – Not a verifiable item, but does affect student need- based award – Steadily decreasing since 2009-2010 – Middle Class will be hardest hit.

23. Source: EDVISORS

24. 2017-2018 PRIOR PRIOR YEAR THE SHIP HAS COME IN!

25. 2017-2018 Long advocated by NASFAA Reduce inaccuracies More time for families to review, submit and update FAFSA More time for schools to review documents Reduce need for verification Reduces number of students who have to use estimated information Increases number of folks who can use IRS DRT Aides those who file a tax extension Receive award letters earlier

26. 2017-2018 Verification Issues: tax exemptions and household size Dealing with Separation/Divorce More Special Conditions – Which year to use? Either? (No word yet from College Board if they will use.)

27. ED’S VERIFICATION Q AND A www2.ed.gov/policy/highered/reg/hearul emaking/2009/verification.html

28. QUESTIONS?