VERIFICATION can Make sense

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VERIFICATIONcan Make sense

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Why Verify?Regulatory (34 CFR, Subpart E
668.53, 668.54(a)2, 668.54(b)668.56(a)(b)(c),668.
57 (a)(b)(c))A school must verify all
applications the Central Processing Service (CPS)
selects for verification, up to 30 of the
schools total number of applicants.Refer to
Ch 4 in Federal Student Aid Handbook

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The 30 is not a quota, if CPS selects less then
30 the school is not required to make up the
shortfallApplicants the school selects and
those with conflicting information do not count
towards the 30 level.A school may chose to
verify more than the 30 and items other then
mandatory fields

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Whats an applicant? The school can determine
what they think an applicant is. Anyone who
applies using their school code?Only those
students who have completed the admissions
process? Only if the student is enrolled and in
an eligible program?

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Any student who you award Federal and/or State
funds (with a few exclusions) that is flagged
by CPS for verification require key elements to
be confirmed.Regardless of the flag a school
mustverify any applicant information that it has
reason to believe is incorrect or discrepant.

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What is the required policies for
Verification?You must have written policies
that state what you do concerning verification in
regards to student notification (the how and
when), deadlines and consequences, making
corrections and referring overpayments.

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A school may select additional students to
verify and may choose additional elements in the
FAFSA results to verify for all applicants.All
applicants verified must have the same policies
and procedures applied such as deadlines,
notifications, allowable tolerances, and handling
of overpayments.Your policies should indicate
the mandated elements as well as your selected
elements that will be requested to be verified

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Required Verification Items1. Household
size2. Number in college3. Adjusted gross
income (AGI)4. U.S. taxes paid5. Certain types
of untaxed income and benefits ?Child support
?IRA/Keogh deductions ?Interest on tax-free
bonds6. All other untaxed income included on the
U.S. income tax return, excluding information on
the schedules

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The Federal Tax return will verify some of the
required items (be sure to get signed copies) on
the FAFSA results. Many schools use a
Verification Worksheet to verify the other
elements. The Feds provide an online form each
year or create your own. You may also need to
ask for W2s, Child support received documents,
and other items to document required
elements.http//www.ifap.ed.gov/vgworksheets/09
10VerificationWkshts.html

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Acceptable DocumentationVerification Worksheet
or signed statement can be used for Household
size, number in college, child support received
and untaxed income and benefits.Signed copies
of the IRS Tax Form (1040s), IRS Tax Transcript
or Form 4868. These can be e-filed but you need
copy of Tax Form not the 8453 Form

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Zero incomeIf an
applicant reports no income for the base year it
can be due to tax write-offs that produce a
negative AGI or the applicant neglected to report
untaxed assistance or the applicant was uncertain
of how to complete the FAFSA. Zero income is
noted in CPS edits and may increase the
likelihood that the applicant will be selected
for verification. If the CPS does not select
the student for verification, you may still
choose to ask her for further information about
the means of support during the base year.

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Non-FilersIncome from Work Copies of W2s,
Earning Statement for Social Security
Administration or State Employment Security
Office, Miscellaneous income forms, dated and
signed statement from employer, dated and signed
statement from student Verify non-filing IRS
notice student was non-filer for the base tax
year

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More on Non-FilersPer the FSA
Handbook (Ch 5,pg. AVG 88) Financial aid
professionals are not expected to have special
knowledge or expertise regarding the U.S. tax
code. If someone whose data were required on the
FAFSA submits a signed statement claiming
non-filer status and you have reason to believe
that person would have been required to file a
U.S. tax return, this constitutes conflicting
information and must be resolved... Conflicting
information must be resolved before you can
disburse federal student aid.

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Even More on Non-FilersPer the FA
Handbook, FAAs must have a fundamental
understanding of relevant tax issues that can
considerably affect the need analysis. You are
obligated to know (1) whether a person was
required to file a tax return, (2) what the
correct filing status for a person should be, and
(3) that an individual cannot be claimed as an
exemption by more than one person.Use
Publication 17 of the IRS, Your Federal Income
Tax. It is a useful resource FAAs.. You can view
it on the Web at www.irs.gov or you can call the
IRS at 1-800-829-3676 to order a copy. It
addresses pertinent tax issues on these pages
the filing requirementsi.e., who is required to
file a returnare on pages 58 the instructions
on which form a person should file are on pages
89 and the filing status requirements are on
pages 2025.

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More on Conflicting InformationIn addition
to reviewing application and data match
information from the CPS, a school must have an
adequate internal system to identify conflicting
informationregardless of the source and
regardless of whether the student is selected for
verificationthat would affect a students
eligibility.The school must resolve all such
conflicting information, except when the student
dies during the award year.

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Verification ExclusionsIncarceratedRecent
ImmigrantSpouse or Parents UnavailableDeath of
StudentVerified by another schoolPacific Island
Resident Not an Aid Applicant Unsub Stafford
and/or PLUS onlyHEROES ActLEAP,SLEAP or R.C.
Byrd ProgramsStafford loans for study abroad (at
eligible foreign schools)

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Completing the ProcessUnless
receiving only PLUS funds or an unsubsidized
Stafford loan, a student selected for
verification must complete it. The school has
the authorityand in some instances are
requiredto withhold disbursement of any FSA
funds until the file is verified. Adopting this
policy substantially reduces the incidence of
overpayments. You can, however, make an interim
disbursement before verification is finished.

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Timing of signatureAny required signatures,
such as signatures on worksheets or on copies of
tax returns, must be collected at the time of
verificationthey cant be collected after the
verification deadline for that award year.

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Deadlines and failure to submit documentation
A Pell applicant selected for verification must
complete the process by the deadline published in
the Federal Register. 200910 has not been
published, but the deadline is expected to be
September 27, 2010, or 120 days after the last
day of the students enrollment, whichever is
earlier. Campus-based and Stafford loan
applicants must complete verification by the same
deadline or by an earlier one established by your
aid office.

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If a student fails to provide the required
documentation by the deadline Do not
disburse additional Pell, ACG, National SMART,
FSEOG, or Perkins loan funds to the student. Do
not continue the students employment in an FWS
job. Do not disburse Stafford loan funds to the
student or certify (FFEL) or originate (DL) a
Stafford loan application. Return to the
lender (FFEL) or the Department (DL) any
undelivered or undisbursed Stafford loan money.

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If the student already received Pell, ACG,
National SMART, FSEOG, or Perkins money in a
disbursement prior to being selected for
verification, then the student must return the
funds If he received it as an interim
disbursement that the school gave while waiting
to complete verification, the school is
responsible for returning the money to the
programs.

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Interim disbursementsYou can make an interim
disbursement of some Title IV funds before
verification is complete if you have no reason to
believe the application information is
inaccurate. Your school is liable for an
interim disbursement if verification shows the
student received an overpayment or if he fails to
complete verification.

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Verification toleranceVerification can
sometimes uncover minor errors that wont
significantly affect the students eligibility,
so the regulations provide a tolerance for
verification changes.This tolerance is 400 if
the total difference between the incorrect and
correct values for certain items is more than
400, the information must be corrected Note
that there is no tolerance for errors in
nondollar items.

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Verification status codesWhen you disburse a
Pell grant, you must report through Common
Origination and Disbursement (COD) the students
verification status even if he wasnt selected
for verification.VYou have verified the
student. This includes students selected by the
CPS and those your school chose to verify based
on its own criteria.WThe student was selected
for verification by the CPS or your school, and
you chose to pay a first disbursement of Pell
without documentation. This code must be updated
once verification is complete, or COD will reduce
the Pell grant to zero.

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SThe CPS selected the student for verification,
but you did not verify him because you already
reached the 30 verification threshold or because
the student satisfied one of the exclusions or
because your school participates in the Quality
Assurance Program and the students application
did not meet your schools verification
criteria.BlankReport a blank if you have not
performed verification because neither the CPS
nor your school selected the student.

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Late disbursementsA student ceases to be
eligible for aid once he has finished the term
and is no longer enrolled. A student may
submit verification documentation and receive a
late disbursement after that time if the
Department processed a SAR or ISIR with an
official EFC while he was still enrolled. If
there was a change in his EFC due to verification
completed after he was enrolled, any Pell grant
awarded would be based on the higher EFC.

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Dependency status and VerificationA
student must update dependency status any time
during the award year unless it changed because
marital status changed. This update is required
whether or not the student was selected for
verification. For the Pell Grant Program, the
updated information must be submitted to the CPS
for reprocessing. For the Campus-based and
Stafford/PLUS loan programs, you can recalculate
the students EFC based on the updated dependency
status and use that recalculated EFC (note once
youve originated or certified a Stafford loan,
the DL origination record or FFEL certification
record can not be changed to reflect a change in
dependency status).

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New for 2009/10 on Dependency Status
Emancipation and legal guardianship Students
are independent if they are, or were upon
reaching the age of majority, emancipated minors
(released from control of their parent or
guardian) or in legal guardianship, both as
adjudicated by a court in their state of legal
residence. Unaccompanied homeless youth is
determined to be an unaccompanied homeless youth
by a school district homeless liaison or the
director (or designee) of an emergency shelter
program funded by the Department of Housing and
Urban Development (HUD). The director (or
designee) of a runaway or homeless youth basic
center or transitional living program can
determine this as well, plus whether a student is
independent because she is an unaccompanied youth
who is self-supporting and at risk of being
homeless.

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These authorities make this determination if the
student is receiving their programs services .
The FAA can also determine if a student is an
unaccompanied youth who is either homeless or is
self-supporting and at risk of being homeless.
It is important that you examine students
living situations and claims on a case-by-case
basis. This is not a dependency override or an
exercise of professional judgment. If a student
does not have, and cannot get, documentation from
any of the above authorities, you must determine
if she is an unaccompanied youth who is homeless
or is self-supporting and at risk of being
homeless.

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Per the SFA Handbook,(Ch 2,page AVG 29),There
is no prescribed documentation for an FAAs
evaluation of the living arrangements of a
student, but it must demonstrate that the student
meets the definition of this category of
independent student. The determination may be
based on a documented interview with the student
if there is no written documentation available.

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Household size and number in collegeUnlike
dependency status, household size or number in
college cannot be updated unless the student is
selected for verification. If selected, these
items must be updated to be correct at the time
of verification unless they changed due to a
change in the students marital status, in which
case updating is not permitted.

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Professional Judgment and VerificationVerify
the initial FAFSA results prior to making any PJ
decisions (even if not flagged by CPS).Any
conflicting or inconsistent data elements must be
resolved.Have a verified and accurate ISIR and
then begin PJ process per your written policies.

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Other Suggestions Be sure your system supports
the identification of CPS flagged ISIRs (and
Comments) and check each award year that all is
good.Be sure your written policies and
procedures have an audit trail. How do you
prove what you do? Have the student sign a
Statement of Purpose, Financial Obligation and
Acknowledgement of Institutional Procedures this
provides a hard copy that student is aware of
all the FA polices and procedures including
Verification.

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Referral of Fraud CasesWhat
if during Verification the school suspect that a
student or other individual has misreported
information or altered documentation to
fraudulently obtain federal funds? It is the FAAs
obligation to report your suspicions and provide
any evidence to the Office of Inspector General.
Office of Inspector GeneralU.S. Department of
Education400 Maryland Avenue, SWWashington, DC
20202-15101-800-MIS-USEDEmail
oig.hotline_at_ed.govWeb http//www.ed.gov/about/of
fices/list/oig/hotline.html Region V Office,
Chicago, IL [phone]

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References/Resources Federal Student Aid
Handbook 2009/10 , Application and Verification
Guide, Chapters 2,4,and 5.Information for Fin.
Aid Professionals (IFAP)Web Site
http//www.ifap.ed.gov/ifap/index.jsp
Thank YouJanet IngargiolaDirector, Student
Aid Veterans Educational BenefitsDanville
Area Community Collegejingarg_at_dacc.edu

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