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11/06/13
Jamie A. Malone U.S. Department of Education 1
2014-15 FAFSA
& Verification IASFAA
Dubuque, IA
November 6, 2013
2014-15 FAFSA
• Parental information collection changes
GEN 13-12 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”
2
2014-15 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 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
3
11/06/13
Jamie A. Malone U.S. Department of Education 2
2014-15 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
4
2014-15 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)
5
2014-15 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”
11/06/13
Jamie A. Malone U.S. Department of Education 3
2014-15 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 2013- #56/#57/#58
2014-15 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
11/06/13
Jamie A. Malone U.S. Department of Education 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
11/06/13
Jamie A. Malone U.S. Department of Education 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
13
2014-15 Verification
Federal Register Notice 06/13/13
One new required verification item for 14/15
Other Untaxed Income from FAFSA questions
45 & 94
14
2014-15 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-13-16
Do not send families to IRS office to request
transcript
15
11/06/13
Jamie A. Malone U.S. Department of Education 6
2014-15 Verification
Verification Tracking Groups
• V1 – Standard Verification
• V3 – Child Support Paid Verification
• V4 – Custom Verification
• V5 – Aggregate Verification
• V6 – Household Resources Verification
DCL GEN-13-16
16
17
18
11/06/13
Jamie A. Malone U.S. Department of Education 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
11/06/13
Jamie A. Malone U.S. Department of Education 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
11/06/13
Jamie A. Malone U.S. Department of Education 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
11/06/13
Jamie A. Malone U.S. Department of Education 10
2014-15 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 02
28
2014-15 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
11/06/13
Jamie A. Malone U.S. Department of Education 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.
32
2014-15 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
11/06/13
Jamie A. Malone U.S. Department of Education 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 14039 “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 14039 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
11/06/13
Jamie A. Malone U.S. Department of Education 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
38
2014-15 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 2013.
• 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
11/06/13
Jamie A. Malone U.S. Department of Education 14
2014-15 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 2014-15 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 2013
42
11/06/13
Jamie A. Malone U.S. Department of Education 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
11/06/13
Jamie A. Malone U.S. Department of Education 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
11/06/13
Jamie A. Malone U.S. Department of Education 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
49
2014-15 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
11/06/13
Jamie A. Malone U.S. Department of Education 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
53
2014-15 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
11/06/13
Jamie A. Malone U.S. Department of Education 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
11/06/13
Jamie A. Malone U.S. Department of Education 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
11/06/13
Jamie A. Malone U.S. Department of Education 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
11/06/13
Jamie A. Malone U.S. Department of Education 22
I would appreciate if you would take the
time to submit an evaluation of my sessions
electronically at the site below.
http://s.zoomerang.com/s/JamieMalone
You may also send an email to [email protected]
Thanks, Jamie
64
QUESTIONS?
Jamie A. Malone
Training Officer
U.S. Department of Education
312-730-1528
65