fafsa verification updates · 12/04/2016 · 2016-2017 messaging to explain rollovers ... • many...

FASFAA Annual Conference May 24-27, 2016

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FAFSA & Verification Updates

For discussion purposes only

FASFAA Annual Conference

May 24-27, 2016

FAFSA

&

Verification Updates

David Bartnicki

U.S. Department of Education

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College List

• Issue: FSA has received requests from public to stop sharing full

list of colleges on student’s FAFSA with every school listed.

• Resolution: ISIR sent to colleges will only include the Federal School

Code and associated housing code for the school to whom

the ISIR is sent.

• Applicants will continue to receive SARs that list all the Federal

School Codes selected on each transaction in order

• State grant agencies will continue to receive the full list of the

colleges but, beginning with the 2017-2018 FAFSA that listing

will be provided in a random order

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Change to Marital Status

• Issue:

When a student or parent changes his/her marital

status on a renewal application or correction, the

corresponding marital status date isn’t always

updated.

• Resolution:

When a student or parent changes his/her marital

status and does not change the corresponding date,

an edit displays.

4 2016-2017

Messaging to Explain Rollovers

• Issue:

Students and parents who report untaxed portions

of IRA distributions or pensions on the FAFSA

sometimes fail to subtract rollover amounts despite

FAFSA and IRS help text.

• Resolution:

When an amount greater than $0 is reported, a

message will display.

5 2016-2017

Rollover Message

6 2016-2017


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Guidance For Legal Guardianship

• Issue:

Applicants sometimes answer the legal

guardianship question incorrectly.

• Resolution:

FAFSA question 55 has been reworded and help

text has been modified.

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Legal Guardianship Messaging

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IRS DRT Messaging

• Issue:

Applicants and parents don’t

understand the purpose of the

IRS DRT filtering questions.

• Resolution:

Text that precedes these

questions has been enhanced.

9 2016-2017


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IRS DRT Messaging

10 2016-2017

Other 2016-17 FAFSA Changes

• Income threshold for an Automatic Zero EFC

increased to $25,000

• Change tax line references in taxes paid questions

• Updated the question to read, “Enter your (and spouse’s)

income tax for 2015. Income tax amount is on IRS Form

1040—line 56 minus line 46; 1040A—line 28 minus line 36; or

1040EZ—line 10.”

• Excess Advance Premium Tax Credit Repayment and the

Health Care Individual Responsibility line items should not

be included as taxes paid for Title IV purposes

• Reorder text in FAFSA questions 26, 28, 29, and 30

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2017-2018


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Paper FAFSAs

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More than 99 percent of FAFSAs are filed

electronically.

Beginning with the 2017-2018 FAFSA we

will no longer print the FAFSA as a color

packet.

PDF FAFSA available on-line to be printed

Call 1-800-4FEDAID to request a copy

2017-2018 Application

• 2017-2018 Processing Announcements

– Beginning with 2017-2018, the FAFSA cycle will

begin October 1 instead of January 1

• 2017-2018 FAFSA filing will begin October 1, 2016

• Gives more time to review, submit & update FAFSA data

– Beginning with 2017-2018, FAFSA income

information will come from the “prior, prior year”

• 2017-2018 FAFSA will collect tax year 2015 income

information

– Added an applicant’s receipt of Medicaid as a

qualification for the Simplified Needs Test (SNT)

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• Benefit #1: Alignment • Many college application deadlines occur in the fall

• Alignment of FAFSA availability = less confusion

• Benefit #2: Certainty • No need to estimate tax information

• IRS Data Retrieval Tool available at launch

• Earlier receipt of Expected Family Contribution (helps with

assessing net costs)

• Benefit #3: Less Pressure • More time before (most) state and school financial aid

deadlines

• More time to compare school offers before College Signing

Day

Benefits of FAFSA Changes


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Questions?

FAFSA CHANGES FOR 2017-18

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• August 2016 • EFC Formula Guide

• SAR Comments Code and Text Guide

• ISIR Guide

• September 2016

• CPS Web Applications Demo System availability

• October 2016 • FAFSA on the Web available (10/1/16)

• FAA Access to CPS Online availability (10/1/16)

• IRS Data Retrieval Tool available (10/1/16)

• Student Aid Report distribution begins (10/3/16)

May 6, 2016 Electronic Announcement

2017-2018 Important Dates

Early FAFSA/Prior-Prior Year: Issues We’ve heard your concerns about….

• Outreach

– Early FAFSA Webpage (right-hand side of IFAP)

• http://ifap.ed.gov/EarlyFAFSA/indexV1.html

• Periodic EAs, DCLs, training, Resources on IFAP

• Q & As recently added

– Student websites, publications, communications will be

updated appropriately and as timely as possible

– "Early FAFSA" mailbox for the community to contribute

thoughts, ideas, and concerns on the implementation of the

2017-2018 Early FAFSA

• "Early FAFSA" mailbox - [email protected]

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http://ifap.ed.gov/EarlyFAFSA/indexV1.html

mailto:[email protected]


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Early FAFSA/Prior-Prior Year: Issues

• Materials and Resources for Outreach

– FAFSA: FinancialAidToolkit.ed.gov/fafsa

– Resources: FinancialAidToolkit.ed.gov/resources

– FAFSA Changes: FinancialAidToolkit.ed.gov/fafsa-

changes

• Talking points

• Table of FAFSA launch dates and tax years

• Fact sheets for counselors and parents & college students

• Outreach calendar

• PowerPoint presentations

• Information about upcoming webinars

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We’ve heard your concerns about….

• Professional Judgement (GEN-16-03)

• Reminded schools of their ability to use PJ and

encourages schools to use PJ when appropriate (and

properly document)

• ED acknowledges likely increase in use of PJ

• ED will modify risk-based compliance models to

account for PJ increase

• Reminded schools to set Professional Judgment Flag

to 1 (EFC Adjustment Processed) to indicate that the

CPS submission was the result of a PJ determination

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We’ve heard your concerns about….

• Verification

• May be some changes but overall process will be the same

• In most cases financial data processed by IRS

• Conflicting information (16/17 vs. 17/18 data)

• ED working to determine how to handle conflicting

information during transitional year (e.g. 2015 financial data)

• 2/18/16 EA encourages use of IRS DRT in 16/17 and 17/18

to reduce likelihood of conflicting information

• Further conflicting information guidance with be shared

though IFAP in the near future

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G-Q8: Will institutions have to review all of their students 2016-17

and 2017-2018 ISIRs to determine if there might be conflicting

information since supposed to be completed using same 2015

income and tax information?

G-A8: No….the Department has developed a process where CPS

will review a 2016-2017 FAFSA if filed for a 17-18 applicant. CPS

will flag only those 2017-2018 ISIRs where any potential conflict,

could have a significant impact on the student’s 2017-2018 EFC…

…The most effective ways to prevent conflicting information from

occurring is for the FAFSA applicant to use the IRS Data Retrieval

Tool (IRS DRT) when completing both their 2016-2017 and 2017-

2018 FAFSAs. [April 12, 2016]

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Early FAFSA/Prior-Prior Year: Q & As

Early FAFSA/Prior-Prior Year: Items

Electronic Announcement #4 - March 18, 2016

• Outlines income related items on FAFSA that will

be based on 2015 data (prior-prior year)

• Tax filing status, tax return status, type of return, return

eligibility, AGI, taxes paid, exemptions, income earned

from work, income exclusions, untaxed income

• FAFSA items current at time FAFSA completed or

for current award year (Not prior-prior year data)

• Dislocated worker, household size, number in college,

assets, certain means-tested benefits

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2016 FSA Webinar Series

Online registration is available at:

http://fsaregistration.ed.gov/d/vfqcw2


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Prior-Prior Year – What ISN’T changing…

• When Pell amounts are

finalized/announced

• When Pell charts are released

• When Pell origination/disbursement

records can be sent to COD

• When Pell funds will be available in G5

Sec. 482 of the HEA

Described in detailed in the Early FAFSA Q & As

Award Letters

Are we expected to award financial aid earlier?

Schools are encouraged to

award earlier, but are not expected

to change institutional deadlines

and processes

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Electronic Announcement: April 12, 2016

G-Q1: Will FAFSA applicants have an option to use tax year

2016 income and tax information?

G-A1: NO. Beginning with the 2017-2018 FAFSA, students and

parents will be required to use income and tax information from

the 2015 tax year. However, a financial aid administrator (FAA)

may use professional judgment to change any of the income or

tax items by using the 2015 (or any other recent 12 month period)

income and tax information, if the FAA determines that there are

extenuating circumstances that justify the use of information other

than the 2015 tax year information. The fact that the student might

be eligible for more aid based upon the use of 2016 information is

not, by itself, sufficient reason for an FAA to make a professional

judgment decision to use 2016 income. [April 12, 2016]

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• G-Q4: Since the 2017-2018 FAFSA will use information from

2015, will the 2017-2018 expected family contribution (EFC)

calculation use the same need analysis tables that are

used for the 2016-2017 EFC calculations?

G-A4: No. The 2017-2018 EFC calculation will use updated

need analysis tables. [April 12, 2016]

• G-Q5: Will the 2017-2018 EFC need analysis tables be

available earlier?

G-A5: Yes. The Department expects to publish in the Federal

Register the 2017-2018 EFC calculation tables by the end of

May. [April 12, 2016]

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G-Q9: Will the 2017-2018 FAFSA (either initial or renewal) be pre-

populated with information from the applicant’s 2016-2017

FAFSA since the information should be the same?

G-A9: NO. There are too many instances where such pre-populating

would result in incorrect information being included on the 2017-2018

FAFSA – e.g., changes in dependency status, changes in marital

status, professional judgment. However, institutions are reminded

that most 2017-2018 FAFSA filers who have filed an IRS income tax

return will be able to use the IRS Data Retrieval Tool (IRS DRT) to

import their 2015 income and tax information directly from the IRS

into their 2017-2018 FAFSA. Using the IRS DRT is the fast and most

accurate way to input income and tax information into the FAFSA.

Use of the IRS DRT will dramatically reduce the likelihood that the

applicant will be selected for verification. [April 12, 2016]

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2016-17 Verification – Overview

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• Same data elements as for 2015-2016

award year

• Some modifications and clarifications to

acceptable documentation

• Eliminated Child Support Paid (V3) as a

separate verification group

• In limited circumstances, an applicant’s

Verification Tracking Group could change

2016-17 Verification - Changes

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Verification Tracking Group changes:

• Verification Tracking Group V3 (Child

Support Paid) has been removed

• Applicants placed in V1, V4, V5, and V6

must still verify child support paid if reported

on ISIR


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• Applicants may be moved from previously

assigned Groups V1, V4, and V6 to Verification

Tracking Group V5

– Applicant is only required to verify the additional

items in V5 that were not previously verified

– If the applicant is moved to Verification Tracking

Group V5, no additional disbursements of any

Title IV aid may be made until verification is

satisfactorily completed


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• Applicants moved to Verification Tracking

Group V5

– If Title IV aid had been disbursed prior to

receiving an ISIR with the new V5, and the

applicant does not complete verification, the

applicant is liable for the full amount of TIV aid

disbursed for 2016-2017 (not FWS funds)

– The institution is not liable

• Except school must return any Title IV funds as

required in any R2T4 calculations

Applicants moved to Verification Tracking Group

V5

• Verification can be set on the application or

correction

• Verification Selection Change Flag

• Y: indicates verification was not set and now record

is selected for verification

• C: indicates the verification tracking group has

changed

– This “C” is transaction specific

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2016-17 Verification

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Income Information for Non-IRS Tax Filers

• Tax filers who filed an income tax return with a taxing

authority in a U.S. territory (Guam, American

Samoa, the U.S. Virgin Islands) or commonwealth

(Puerto Rico and the Northern Mariana Islands) or

with a foreign central government, must submit a

copy of a transcript of their tax information

– A signed copy of the applicable 2015 income tax return

that was filed with the taxing authority is only

acceptable if tax filers are unable to obtain a free copy

of a transcript of their tax information


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Income Information for Non-IRS Nontax Filers

• Residents of the Freely Associated States

(Republic of the Marshall Islands, the Republic of

Palau, the Federated States of Micronesia), and a

U.S. territory or commonwealth or a foreign

central government who are not required to file an

income tax return under that taxing authority’s rules

must submit:

– a copy of their Wage and Tax Statement (or equivalent

documentation) for each source of employment income and

– a signed statement identifying all of the individual’s income

and taxes

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• For V4 and V5, if institution successfully verified and

documented applicant’s high school completion status

for a prior award year, verification of high school

completion status is not required for subsequent years

• DD Form 214 Certificate of Release or Discharge From

Active Duty may serve as alternative documentation to

verify a student's high school completion if it indicates

that the individual is a high school graduate or

equivalent

• An institution may not accept as alternative

documentation an applicant’s self-certification

High School Completion Status

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In rare cases where it is impossible for a refugee, an asylee or a

victim of human trafficking to obtain documentation of his or her

completion of a secondary school education in a foreign country,

an institution may accept self-certification from these applicants

• Q&A FHD-Q2/A2 (program integrity Q & A website under HSD)

• Required information included:

– Proof of attempt to obtain documentation of their completion of a

secondary school education in a foreign country

– Signed/dated statement that indicates applicant completed secondary

school education in a foreign country along with - name and address

of foreign high school and date foreign HS diploma was awarded

– Copy of entry status documentation showing status as a refugee,

asylee, or victim of human trafficking and who entered the US after

the age of 15

High School Completion Status


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2016-2017 IRS Tax Return

Transcript Matrix

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Electronic Announcement – March 23, 2016 • Cross-walk of IRS tax financial information between:

FAFSA questions

IRS Tax Return Transcripts

IRS Tax Returns

• Specifically states do NOT use amounts from any

line items on transcripts for verification purposes that

use the word “RECOMPUTED”

Electronic Announcement – 3/23/16

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New Announcement - May 4, 2016

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• New Matrix effective May 4, 2016

• Updated the Income Tax Paid line items for Tax Return

Transcripts

• Taxes and credits related to the Affordable Care Act are

not to be included in the amount of U.S. Income Tax that is

used in the calculation of a student’s EFC

• Also indicate for all transcripts, if taxes paid is negative,

enter '0' (zero)

• Specifically states do NOT use amounts from any line

items on transcripts for verification purposes that use

the word “RECOMPUTED” OR “VERIFIED”


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• Contains 4 appendices to assist with crafting school

verification documents to gather verification data

• Appendix A – Suggested Text

• Not required to use ED’s suggested text and formats

• ONE EXCEPTION – institutions must use the exact

language provided in the “Statement of Educational

Purpose” (Groups V4 & V5)

• “Notary’s Certificate of Acknowledgement” section, does not

require the use of the exact language provided, although it

must include a copy or description of the identification

presented by the applicant to the notary

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• Appendix B – Table of verification items

• Appendix C – Verification tracking groups and

FAFSA verifiable information

• Appendix D – Timeline Availability of 2015 IRS

Tax Information

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V4/V5 Tracking Results:

2016-2017

• The V4 and V5 tracking process in FAA

Access that began in the 2014-15 processing

year WILL CONTINUE for 2016-17

• Schools need to select the proper award year

for which they are providing results

• 2015-16, 2016-17, etc.

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V4/V5 Tracking Results – 2016-2017

https://faaaccess.ed.gov

Use the Identity Verification Results section on the FAA Access home page


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Whom to report: student for whom school received an

ISIR with a Verification Tracking Group of V4 or V5 AND

for whom school requested verification documentation • Do NOT include students the school selected for

verification of identity or high school completion status

When to report: 60 days following the institution's first

request to the student to submit the required V4 or V5

identity and high school completion documentation • Changes to previously submitted Identity Verification

Results must be updated within 30 days

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Resources

• Federal Register Notice – April 1, 2016

• GEN-16-07 – April 5, 2016

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4/1/16 Federal Register • Updates

– DD Form 214 Certificate of Release or Discharge From

Active Duty that indicates an individual is a high school

graduate/equivalent can be used as alternative

documentation to verify high school completion status

– Individual selected for verification required to file a 2015 IRS

income tax return and granted a filing extension by the IRS

or any nontax filer selected for verification (parent, student,

etc.) regardless if they earned any income from work, MUST

provide:

• Confirmation of non-filing from the IRS or other relevant taxing

authority dated on or after October 1, 2016

• If person never filed a tax return before, can get letter of

nonfiling from the IRS through 4506-T document (box 7)


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• GEN-16-07

– Verification Tracking Group V6 is eliminated

• Schools reminded they can still select items of their

choosing for verification

– SNAP and Child Support Paid removed as

individual verification items under V1, V4 or V5

– Suggested Test for 2017-2018 will be provided in

a future electronic announcement

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2017-2018 Verification • GEN-16-07

– School can use verification documents from 2016-2017 for

following items if meet 2017-2018 requirements:

• Adjusted Gross Income (AGI); U.S. Income Tax Paid ; Untaxed

Portions of IRA Distributions; Untaxed Portions of Pensions;

IRA Deductions and Payments; Tax Exempt Interest Income;

Education Credits; Income Earned from Work

– Documentation of high school completion obtained prior to

the 2017–2018 award year is acceptable

– Must obtain new documentation each award year for:

• Number of Household Members

• Number in College

• Identity/Statement of Educational Purpose

Verification Policy Reminders

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October 2, 2015 Electronic Announcement

• Alternative documentation allowed when tax filer

RECENTLY requested but unable to obtain an IRS

Tax Return Transcript using the IRS paper or on-line

request process

• No alternative documents for telephone requests

• Exception not permitted for –

– transcripts unable to be obtained simply because the IRS

has not had time to process the data due to a recent filing

– saying the "Get Transcript Online" tool is not available

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*For 2015-2016 award year*

2015-2016 – Transcripts Unavailable

Alternative documentation includes:

• Signed copy of relevant 2014 IRS tax return

AND

• Statement from tax filer, on or attached to the return, certifying

same data submitted to the IRS

AND

• Communication from IRS stating request unsuccessful

– Letter from IRS (signed and dated by tax filer); or

– Screen shot print (signed and dated by tax filer)

AND

• Completed and signed IRS Form 4506 T-EZ or 4506-T listing

institution as third party – only send to IRS if doubt accuracy

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Tax Filers - Extensions

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• Person is required to file, but obtained extension, must

submit:

• Program Integrity Q & A Website (DOC-Q16)

– IRS form 4868 or IRS approval to extend beyond October 15

deadline

– W-2 for each source of employment income

– Signed statement by a self-employed individual certifying

amount of AGI & US income tax paid

– When above documentation reviewed, verification is

considered complete (disbursements are valid)

• School may request transcript/IRS DRT when taxes are

filed; must re-verify income information


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Verification Policy Updates

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Individuals who filed an amended tax return

must submit the following documents to the

institution:

• an IRS Tax Return Transcript, or any other IRS tax

transcript(s) that include all of the income and tax

information required to be verified; and

• a signed copy of the IRS Form 1040X that was filed

with the IRS

Guidance effective 8/13/15 for 15/16 and subsequent years

• Posted on Program Integrity Q & A website

Verification Policy Updates

59

Victims of IRS tax-related identity theft must submit:

• Statement signed and dated by tax filer indicating they

were victims of IRS tax-related identity theft and the IRS

has been made aware of the tax-related identity theft; and

• A Tax Return DataBase View (TRDBV) transcript obtained

from the IRS

– Tax filers who cannot obtain a TRDBV transcript may instead

submit another official IRS transcript or equivalent document

provided by the IRS if it includes all of the income and tax

information required to be verified

Guidance applies to 15/16 and subsequent years

• Posted in 6/26/15 Federal Register Notice

Verification Q & A

60

• VI-Q9. Must an institution complete verification of all

FAFSA information identified in Verification Tracking

Groups V1, V5 or V6 even if the selected applicant is

eligible for … an Automatic Zero EFC (Auto Zero EFC) …

• VI-A9. …For dependent applicants, only the following

FAFSA information must be verified:

– The parents' AGI if they were tax filers;

– The parents' income earned from work if they were nontax

filers; and

– The receipt of SNAP benefits (food stamps) by any

household member if the receipt of these benefits qualified

the applicant for Auto Zero EFC.


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Verification Q & A cont.

61

• VI-A9. …For independent applicants, only the following

FAFSA/ISIR information must be verified:

– The applicant's and spouse's AGI if they were tax filers;

– The applicant's and spouse's income earned from work if they

were nontax filers;

– The number of household members to determine if the

independent applicant has one or more dependents other than a

spouse; and

– The receipt of SNAP benefits (food stamps) by any household

member if the receipt of these benefits qualified the applicant for

Auto Zero EFC.

Also dependent and independent applicants placed in Verification

Tracking Group V5 must also verify their high school completion

status and identity/statement of educational purpose.

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Resources

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• Federal Register Notice - June 26, 2015 (16/17)

• DCL GEN-15-11 - June 29, 2015 (16/17)

• EA 11/18/15 – Suggested Text and Appendices (16/17)

• EA – 5/4/16 – REVISED Tax Return Transcript Matrix (16/17)

• Federal Register Notice - April 1, 2016 (17/18)

• DCL GEN-16-07 – April 5, 2016 (17/18)

• Program Integrity Q & A Website (“verification”)

• http://www2.ed.gov/policy/highered/reg/hearulemaking/2009

/integrity-qa.html

• Federal Student Aid Handbook

– Application and Verification Guide – Chapter 4

• Federal Regulations

– 668 Subpart E (668.51 – 668.61); 668.16(f)

http://www2.ed.gov/policy/highered/reg/hearulemaking/2009/integrity-qa.html






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Contacts

• Atlanta School Participation Division

• Main Number: 404-974-9303

• Ask for your Point-of-Contact

• Arva Thomas (IIS) – 404-974-9412

• Cassandra Weems (IIS) – 404-974-9305

• Atlanta Training Officer

• David Bartnicki – 404-974-9312

• Email – [email protected]

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Training Feedback

To ensure quality training we ask all participants to

please fill out an online session evaluation

• Go to http://s.zoomerang.com/s/DavidBartnicki

• Evaluation form is specific to David Bartnicki

• This feedback tool will provide a means to educate and

inform areas for improvement and support an effective

process for “listening” to our customers

• Additional feedback about training can be directed to

[email protected]

65

Questions

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David Bartnicki

404-974-9312

[email protected]

http://s.zoomerang.com/s/DavidBartnicki

http://s.zoomerang.com/s/DavidBartnicki

mailto:[email protected]

fafsa verification updates · 12/04/2016 · 2016-2017 messaging to explain rollovers ... • many...

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