After the FAFSA: Verification, Special Circumstances and Appeals

Transcription

1 After the FAFSA: Verification, Special Circumstances and Appeals Maria MacDougal, College Access Counselor Copyright 2014 Finance Authority of Maine

2 Verification, Special Circumstances & Appeals Verification o Overview o Household size & Income o Verification of non-tax filers and other supporting info Special Circumstances Overview Dependency status & overrides Other types of circumstances What is NOT a special circumstance Appeals When to appeal & who to ask Agenda

3 Verification What is verification? Verification is when the federal government (or the institution) requires a school to review and document a student s household and income information Students are selected for verification after the FAFSA is submitted; the review is done by the school Verification is NOT: An indication that the student/family did something wrong A paperless process

4 Verification Verification Process Overview After the FAFSA is submitted, the student s Student Aid Report (SAR) will indicate if the student has been selected (there will be an asterisk next to the EFC as well as mentioned in the text). Each school will reach out to the student via school communications to request documentation (paper or ). After all completed documents are submitted, the financial aid office reviews the information and makes any corrections to FAFSA. Financial aid is awarded.

5 Verification of Household Info Verification of Household Information Household information is verified by having the student complete a verification form The verification form will typically ask students to list all members of the household. This includes: o The student o Parents (we ll talk a bit more about parents in the next slide) o Siblings, step-siblings (if parents provide more than half of their financial support & even if they don t live with the student) o Any other dependents (grandparents are an example) for whom the parents provide more than half of their financial support

6 Verification of Household Info About parents in the household If both of the biological or adoptive parents live in the same household, answer questions about that household If both of the biological/adoptive parents do not live in the same household, the student must provide household information of the parent they lived with most during the past year o If that parent is currently remarried, information for the stepparent would also be included We ll talk about different parental circumstances when we get to Special Circumstances

7 Verification of Household Info Verification of Household Information The form will ask for household members ages & school level o This helps the financial aid office determine how many in the household are in college or if an older sibling is not to be considered a dependent of the parents, based on age Independent students o Student information required - no parent/guardian information. Household also includes spouse & student s children, if applicable. o An independent student with no dependents of their own would list only themselves.

8 Verification of Income Info Verification of Income Information The verification process requires the confirmation of all household income (or lack thereof), including: o Taxable income (including tax filing status and taxes paid) o Wages (regardless of whether or not a tax return was filed) o Untaxed income o Profit or loss from businesses owned Additional income information as requested by the school

9 Completing Verification So what does this mean for Tax filers?

10 Verification for Tax Filers Verification of Taxable Income Information The verification of tax filing status, taxable income, and taxes paid must come directly from the IRS either by: o using the IRS Data Retrieval Tool within the FAFSA; or o submitting a Tax Return Transcript A Tax Return Transcript can be obtained by calling the IRS at or at IRS.gov

11 Verification for Tax Filers Verification of Wages: W-2s are required to verify wages (W-2s are needed as wages are combined for jointly filed tax returns)

12 Verification for Tax Filers Verification of Untaxed Income: Completion of the verification form listing any untaxed income not included on a tax return, including: o Payments to tax deferred pension/savings plans o Child support received o Veterans non-education benefits o Non Social Security disability and worker s compensation Verification of Household: Completion of household information section on the verification form.

13 Completing Verification So what does this mean for Nontax filers?

14 Verification for Nontax Filers Verification of Income and Household Information: Information for both categories is provided by submitting a signed verification form which includes: o completed income sections that list the sources and amounts of income earned from work (copies of W-2s must also be provided, if applicable) and required income received from other sources; and o completed household information section IRS Verification of Non-filing Letter Letter required for parents of dependent students and independent students, but not for dependent students.

15 Verification for Nontax Filers An IRS Verification of Nonfiling Letter can be obtained by mailing or faxing in form 4506-T (available from the school or at IRS.gov)

16 Verification Income Documentation For standard verification, the following documentation is required o Verification Worksheet (provided by the school) o All W-2 s for student and parents o Tax return transcripts for tax filers (if DRT was not used; always make sure to have tried that first) o Verification of Non-Filing letter for parents & independent students who did not file taxes The school could ask for a copy of the 1040 form with schedules and worksheets if they are looking to verify business income/loss

17 Verification - Other Categories Other Types of Verification Documents High School Completion Status o HS diploma or equivalency o US or foreign school Identity/Statement of Educational Purpose o Student must appear in person with valid ID and sign a statement of educational purpose that certifies who they are and that the federal student aid they may receive will only be used for educational purposes and for the cost of attending school, FSA Handbook, AVG, Chap 4 pg. 88

18 Verification Tips Things to remember Act quickly! Students & families should begin to gather documentation as soon as they see their SAR The school will contact the student for specific information to submit o This happens through school and/or student portal so it is important to check them regularly! Make sure ALL requested documentation is completed and signed as required Submit in a timely manner; financial aid cannot be awarded until verification is complete, so pay attention to deadlines Follow up with the financial aid office for changes and/or questions

19 Special Circumstances What defines a Special Circumstance? Any situation not captured on the FAFSA or that requires clarification o One time lump sum receipt of income, such as an inheritance Changes to household or income information after filing the FAFSA o Divorce or separation o Death in the family o Loss or significant reduction of income Student dependency status concerns: o Homelessness or risk of homelessness o Emancipated minors o Extenuating circumstances regarding ability to provide parental information

20 Special Circumstances Changes to Household Divorce or separation occurred after tax year provided on FAFSA o Divorce/separation documents may need to be provided to financial aid office o Verification will likely be required Both parents may need to provide copies of W-2 s and Tax Return Transcripts Death of a parent since filing the FAFSA o Copy of death certificate may be required o Living parent s income will be used to recalculate EFC

21 Special Circumstances Changes in Income Loss of a job or significant reduction in income since filing the FAFSA should be reported to FAO o Submit letter from employer showing proof of layoff or income reduction o Documentation of current income o Verification will likely be required Out of pocket medical costs o Copies of receipts, medical bills, bank statements illustrating costs

22 Special Circumstances Dependency Status The FAFSA asks a series of questions to determine dependency status Questions that fall into the Special Circumstances category relate to: o Students under legal guardianship o Foster care/ward of court o Emancipated minors o Homelessness or risk of homelessness

23 Special Circumstances Dependency Status If the student can answer yes to any of the dependency questions, they are considered independent o They may need to provide court documentation regarding legal guardianship, ward of court, foster care or emancipation o High School Students who are homeless or at risk of homelessness will need documentation from school department homeless liaison

24 Determining Dependency Status

25 Special Circumstances There may be a situation where student cannot answer Yes to any of the dependency questions BUT they still cannot provide parental information

26 Special Circumstances If the student indicates that they are not able to provide parent information, the following will appear:

27 Special Circumstances Example of special circumstances: The parents are incarcerated Student left home due to abusive environment Student does not know where parents are and is unable to contact them

28 Special Circumstances Student must provide written evidence: Court or law enforcement documents Letters from a clergy member or social worker Letters from a school counselor Any other relevant data

29 Not Special Circumstances Situations that are not special circumstances: Parents do not want to provide information Parents refuse to help pay for college Parents do not claim student as dependent on income taxes Student does not live with the parents

30 Not Special Circumstance Unsub Eligibility No special circumstances and can t provide parent information - typically not eligible for federal aid. However, may be eligible for Unsubsidized Loan only.

31 Financial Aid Office Financial aid administrator makes the final determination Decision cannot be appealed to US DOE Decision made at one college may differ from another college May have to provide documentation each year

32 Tips Pay attention to deadlines Make sure all documentation is legible, signed, completed, and supports the circumstances Check communications from school(s) regularly for updates When in doubt- ASK! The financial aid office is given some leeway in determining aid eligibility for special circumstances or unforeseen situations.

33 Appeals If student & family do not feel aid award is enough AND they do not have special circumstances, they may want to appeal to the financial aid office School may be able to provide additional institutional dollars If amount of Merit award from school is questioned, student should contact Admissions Ask about retaking SATs There may be a wait-list for funds like Work Study If the EFC is $0-500, aid will likely remain unchanged, as those students are generally awarded the maximum amounts

34 Q&A Thank You

35 Questions? Finance Authority of Maine 5 Community Drive P.O. Box 949 Augusta, ME TTY: education@famemaine.com FAMEmaine.com