verification tasfaa 2011 abc workshop consuela mitchell director of student financial aid services...
TRANSCRIPT
Verification TASFAA 2011 ABC WorkshopTASFAA 2011 ABC Workshop
Consuela MitchellDirector of Student Financial Aid Services
Tarrant County College-NE Campus
2011-2012 Application & Verification Guide (AVG)http://ifap.ed.gov/fsahandbook/1112FSAHandbookAVG.html
1
Verification Topics
Policies and procedures Whose application must be verified Quality Assurance Program
requirements Which data elements must be verified Acceptable documentation Data element corrections Data element updates Interim disbursements Verification time frames Changes beginning 2012-2013 2
Verification
Process of verifying accuracy of FAFSA data
Regulations define: Whose application must be verified (AVG-80)
Data elements to be verified (AVG-82-83)
Documentation used to verify data elements (AVG-85)
Regardless of verification selection, must always resolve discrepancies and conflicting information
3
Verification Policies and Procedures
Must: Be written
Address school options where flexibility exists
Be made clear to all students
Be consistently applied
(AVG-79)
4
Verification Policies and Procedures
Must include:
Procedures for identifying and processing selected applications
Deadline for applicant to provide documentation
Consequences of failure to meet deadline Procedures applicant must follow to correct application
information Method for notifying applicant of verification results and
change in EFC and/or award Procedures for referring overpayments to ED Procedures for referring cases of suspected fraud or other
criminal misconduct to ED Office of Inspector General
(AVG-79) 5
Whose Application Must Be Verified?
Applicants selected by Central Processing System (CPS)
Applicants selected by institution
6
Programs to Which Verification Applies
Federal Pell Grant
Campus-based programs
Subsidized Direct Loan program
7
30% Verification Option 30% is cap, not minimum
Applications making up 30% must be CPS-selected
If more than 30% selected by CPS, may choose to verify more than 30%
Document files of CPS-selected applicants not verified
30% option does not relieve institution of responsibility to resolve conflicting information
*30% cap eliminated beginning 2012-2013*
(AVG-80-81)8
Institutionally-Selected Applications
Institution can select additional applications not selected by CPS
Selection may be based on such data elements as: Estimated tax figures Low family income levels Large household size or number in college Completion of certain FAFSA data
elements Other institutional criteria 9
Verification Exclusions
Certain types of applicants and data elements exempt from verification
Reason for verification exclusion should be documented in student’s file
Except for applicant who dies during the award year, if conflicting information or reason to believe application information is inaccurate, exclusions do not apply
(AVG-81-82)
10
Verification Exclusions
Exclusions include or are limited to:
Entire application—student and parent data
Applicant’s spousal data only
Certain data elements
11
Quality Assurance Program
Participation voluntary
ED provides guidelines, tools, and incentives for participation
Participating schools exempt from prescribed verification requirements
School sets verification parameters
School must reassess and self-correct verification process on ongoing basis
Every other year – Random Sample must be completed
Quality Assurance Website: http://ifap.ed.gov/qahome/Default.html
(AVG-80)12
Required Verification Data Elements
Household size
Number enrolled in college
Adjusted gross income (AGI)
U.S. income tax paid, and
Certain untaxed income and benefits
*required elements also change beginning 2012-2013*
(AVG-83)
13
Required Verification Data Elements
Certain untaxed income and benefits Child support IRA/Keogh deductions, and Interest on tax-free bonds
(AVG-88)
14
Required Verification Data Elements
15
Tax-exempt interest income
Deductible IRA or Keogh payments
Untaxed IRA distributions and pension or annuity payments
Homebuyer tax credit Making Work Pay tax Making Work Pay tax
credit credit
(AVG-19)
Other untaxed income and benefits on the tax return
Items That May Be Verified Using the Tax Return
Adjusted gross income U.S. income tax paid IRA/Keogh deductions and payments Untaxed portions of pension distributions
Untaxed IRA distributions
Interest on tax-free bonds(AVG-85)
16
Acceptable Tax Return Formats
Photocopy, facsimile, or digital image of original paper tax return
If original copied without signature, at least one filer must sign copy
Tax form completed to duplicate original return and signed by at least one filer
Other signed e-file documentation
Form 8453 is a signature form for e-filers and not acceptable
In lieu of return with filer signature, a return with tax preparer’s tax preparer’s stamped, typed, signed, or printed name, and SSN, EIN, or PTIN
(AVG 87-88)17
Alternative Sources of Documentation
IRS tax transcript listing tax return information
Signed statement and W-2s from filer, if tax return or tax transcript unavailable
18
Tax Filing Extensions
Collect W-2’s and one of following:
IRS Form 4868; or
Copy of IRS approval of extension beyond 4-month extension
Collect and review tax return when filed
19
Child Support Documentation
Obtain verification worksheet or written statement certifying amount of child support received for all children Statement must be signed by applicant and at least one parent (if dependent) Statement must be signed by applicant if independent If support paid through government agency,
statement from that agency is acceptable(AVG -88)
20
Child Support Documentation
Request additional documentation if information provided appears inaccurateCopy of separation agreement or divorce
decree Signed statement from parent providing
support Copies of canceled child support checks or money order receipts
(AVG-88-89) 21
Number in Household & in College
Statement or verification worksheet listing each household member’s: Name Age Relationship to applicant Postsecondary school (if any) attending at least
half-time in program leading to recognized educational credential
If institution doubts statement, it should obtain statement from each postsecondary institution listed by applicant
(AVG -83-84)
22
Verification Corrections
Changes to data elements that were incorrect at time of application
If data correct as reported and valid ISIR/SAR:
Pay Federal Pell Grant, FSEOG, and Federal Perkins Loan
Employ students under FWS
Certify/originate and disburse/deliver Direct Subsidized Loans
(AVG 89-91)23
Tolerance Option
$400 net error tolerance for all Title IV programs (also eliminated beginning 2012-2013)
*note: No Tolerance to non-dollar items like HH & # in college*
FAFSA Parent AGI
+ Student AGI+ Parent Untaxed Income+ Student Untaxed Income– Parent U.S. Taxes Paid– Student U.S. Taxes Paid
= FAFSA data (uncorrected sum)
Net Difference: $400
Correct
Parent AGI
+ Student AGI
+ Parent Untaxed Income
+ Student Untaxed Income
– Parent U.S. Taxes Paid
– Student U.S. Taxes Paid
= Correct data (corrected sum)
24
Example: Tolerance Option
FAFSA Data Correct Data
Parent AGI $15,800 $15,500Parent Untaxed Income + 1,200 + 1,500Student AGI + 9,200 + 9,200Student Untaxed Income + 0 + 0Parent U.S. Income Taxes Paid – 500 – 0Student U.S. Income Taxes Paid – 200 – 300
= $25,500 = $25,900
Net difference: $25,500 – $25,900 = $400 (w/in tolerance so not req’d to submit corrections)
25
Recalculating EFC: Federal Pell Grant Program
If net error is greater than $400,
Recalculation of the EFC is necessary
If net error is less than or equal to $400,
No recalculation of the EFC is necessary
(AVG-91)
26
Verification Updates
Changes to data elements that were correct at time of application but have since changed
Applicable only to 3 items: Dependency status Number in household Number of household members enrolled
in college
(AVG 99)27
Verification Updates
Dependency status
All students must update dependency status if it changes at any time
Cannot be updated if it changes as result of change in student’s marital status
(AVG-100-101)
28
Verification Updates
Number in Household and Number in College
If selected, data must be accurate as of verification
If not selected, cannot update for changes occurring after original application filed
If not selected, not required to monitor data element change
(AVG-101) 29
Verification Updates
Cannot update change in student’s marital status
Must update household size if dependent student’s parent remarries after application, before verification
30
Professional Judgment
If using PJ authority to adjust data elements used to calculate EFC on a selected application, application must be verified first
If using projected-year income data to recalculate EFC, projected-year data do not need to be verified
31
Interim Disbursements
In the absence of conflicting information or reason to believe information is inaccurate, institutions have the following disbursement options when verification still incomplete: Federal Pell Grant and campus-based programs:
Withhold payment Make 1 disbursement for 1st payment period Employ applicant up to 60 days under FWS
(AVG-89,91)32
Interim Disbursements
Direct Subsidized Loans:
Refuse to certify or originate loan; or
Certify or originate loan, but not disburse/deliver loan proceeds
(AVG-91)
33
Interim Disbursements
Verification not required for:
Direct Unsubsidized Loans
PLUS Loans
TEACH Grant
Nonfederal LEAP and SLEAP awards
Robert C. Byrd Honors Scholarships
(AVG-81)34
Interim Disbursements
If school makes interim disbursement and student later determined ineligible, or if verification not completed, award for which student is ineligible is an overpayment
Student with overpayment is ineligible for Title IV funds
School liable if overpayment not resolved(Chap. 5)
35
Verification Time Frames
Institution determines when in award cycle to verify based on:
Institution’s resources and procedures
When verification process would be least disruptive to office and least problematic for students
36
Verification Time Frames
Verification Deadlines Campus-based and Direct Loans:
Institutionally-established deadline Federal Pell Grant:
Institutionally-established deadline Institution must have verification documents
and valid SAR/ISIR by earlier of 120 days after last day of enrollment or deadline published annually by ED in Federal Register (expected to be September 24, 2012)
(AVG-92)37
Verification 2012-13 and Beyond
Changes to the Verification process will become effective July 1, 2012. However, colleges should plan to implement these changes after January 1, 2012 for the 2012-13 award year.
Several changes have been made. Specific data elements will be targeted, rather than requiring the same data to be verified for all applicants.
Additional data elements beyond the five that have been historically targeted may be added in future years. These may include whether families have qualified for means tested benefits or certain categories of financial independence.
The Secretary will publish a list each year of the data elements that will be included in the verification process 4-6 months prior to the start of the application processing cycle.
Source: Final Federal Register October 29, 2010 Regulations: 668.51.6138
Verification 2012-2013 and Beyond
Schools must verify all cases selected. The 30% cap has been eliminated.
Tolerance levels for dollar items has been eliminated. Instead, all changes must be submitted to the CPS for reprocessing if the change is $25 or more. All non-dollar item changes (e.g. household size/number in college) must also be submitted.
The regulations now clarify that verification must be completed on selected applications (if selected by the CPS or the school) before a school may exercise Professional Judgment. The results of verification & PJ changes cannot be submitted on the same day.
The changes impose new requirements for the recovery of Title IV funds if a school opts to use interim disbursements.
Conflicting documentation -- regardless of verification -- must still be resolved.Source: Final Federal Register October 29, 2010 Regulations: 668.51.61
39
Available Resources
Federal Student Aid Handbook Application and Verification Guidehttp://ifap.ed.gov/fsahandbook/1112FSAHandbookAVG.html
Institutional Policies and Procedures IRS Publication 17 found at
www.irs.gov Me!
40