FAFSA & Verification

Transcription

1 FAFSA & Verification IASFAA Dubuque, IA November 6, FAFSA Parental information collection changes GEN 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 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 Heterosexual parents who live together and are not married would choose this 3 option Same-sex parents who are not legally married under the authority of a state or foreign country but live together will choose this option If option selected, parents will not be presented option of using IRS Data Retrieval Tool 3 U.S. Department of Education 1

2 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 FAFSA Change Independent Students If in a same sex relationship and legally married in a state or foreign country that permits same sex marriage, should indicate married on FAFSA Changed because of Supreme Court ruling on the Defense of Marriage Act (DOMA) FAFSA Changes GED or state equivalent test - #26 Tax return filing status - #34/#82 Single, head of household, married joint, married separate, qualifying widow(er) Removed hope tax credit - #35, #44, #83, #93 Removed first time homebuyer tax credit - #45/#94 Added Don t include extended foster care benefits Added include untaxed portions of health savings accounts U.S. Department of Education 2

3 FAFSA Changes Money received or paid on your behalf now includes money that you received from a non-custodial parent that is not part of a legal child support agreement - #45 Added in definition of veteran including basic training - #50 Incremented July 1 date to #56/#57/# 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 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 U.S. Department of Education 3

4 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 Asset Threshold Question Applicant answers that assets do not exceed threshold 11 Asset Threshold Question Applicant answers that assets exceed threshold 12 U.S. Department of Education 4

5 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 Verification Federal Register Notice 06/13/13 One new required verification item for 14/15 Other Untaxed Income from FAFSA questions 45 & 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 Do not send families to IRS office to request transcript 15 U.S. Department of Education 5

6 Verification Verification Tracking Groups V1 Standard Verification V3 Child Support Paid Verification V4 Custom Verification V5 Aggregate Verification V6 Household Resources Verification DCL GEN U.S. Department of Education 6

7 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 19 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 20 V3 Child Support Paid Child Support Paid by the student (or spouse), the student s parent, or both 21 U.S. Department of Education 7

8 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 22 V5 Aggregate High School Completion Status Identity/Statement of Educational Purpose AND All items indicated in V1 Tax Filer Non-Tax Filer 23 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 24 U.S. Department of Education 8

9 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 25 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 26 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 27 U.S. Department of Education 9

10 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 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 29 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 that will be posted to IFAP Record of Account Transcript obtained from the IRS Return Transcript for Taxpayer (RTFTP) obtained from the IRS 30 U.S. Department of Education 10

11 31 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 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 33 U.S. Department of Education 11

12 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) 34 Victims Of Identity Theft Collect a signed copy of the paper 2013 tax return that was filed AND a copy of IRS Form 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 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 35 Rollover On Tax Return IRS data retrieval will populate ISIR with untaxed income without consideration of rollover 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 36 U.S. Department of Education 12

13 Taxpayer Has IRS Extension Verification is complete if you have -- Documentation of IRS extension for tax year 2013 & 2013 W-2 Forms or statement from self-employed individual School may require an individual granted a tax filing extension to submit the tax information once filed, either via IRS data retrieval or IRS tax return transcript If school receives tax return information, MUST verify AGI and taxes paid If school does not receive information, may return all funds disbursed 37 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 2013 Documentation of sources and amounts of income- W-2 Form Signed statement 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 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 39 U.S. Department of Education 13

14 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 40 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 41 Acceptable Documentation SNAP - Supplemental Nutrition Assistance Program (Food Stamps) - if receipt is indicated on the 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 2012 or U.S. Department of Education 14

15 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. 43 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 44 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 45 U.S. Department of Education 15

16 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 46 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 47 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 48 U.S. Department of Education 16

17 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 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) 50 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 51 U.S. Department of Education 17

18 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 52 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 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 54 U.S. Department of Education 18

19 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 55 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 56 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 57 U.S. Department of Education 19

20 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 58 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. 59 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 60 U.S. Department of Education 20

21 Verification & Interim Disbursements 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 61 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 62 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. 63 U.S. Department of Education 21

22 I would appreciate if you would take the time to submit an evaluation of my sessions electronically at the site below. You may also send an to Thanks, Jamie 64 QUESTIONS? Training Officer U.S. Department of Education U.S. Department of Education 22