AUTHORIZED EVENTS

AUTHORIZED EVENTS 2017-18 VERIFICATION Slide Handout CREDENTIALED TRAINING

2010 2017 by National Association of Student Financial Aid Administrators (NASFAA). All rights reserved. NASFAA has prepared this document for use only by personnel, licensees, and members. The information contained herein is protected by copyright. No part of this document may be reproduced, translated, or transmitted in any form or by any means, electronically or mechanically, without prior written permission from NASFAA. NASFAA SHALL NOT BE LIABLE FOR TECHNICAL OR EDITORIAL ERRORS OR OMISSIONS CONTAINED HEREIN; NOR FOR INCIDENTAL OR CONSEQUENTIAL DAMAGES RESULTING FROM THE FURNISHING, PERFORMANCE, OR USE OF THIS MATERIAL. This publication contains material related to the federal student aid programs under Title IV of the Higher Education Act and/or Title VII or Title VIII of the Public Health Service Act. While we believe that the information contained herein is accurate and factual, this publication has not been reviewed or approved by the U.S. Department of Education, the Department of Health and Human Services, or the Department of the Interior. The Free Application for Federal Student Aid (FAFSA ) is a registered trademark of the U.S. Department of Education. NASFAA reserves the right to revise this document and/or change product features or specifications without advance notice. April 2017

National Association of Student Financial Aid Administrators A NASFAA Authorized Event 2017 18 Slide 1 2017 NASFAA Lesson 1: Introduction to Verification Slide 2 2017 NASFAA Introduction The process used by the institution to check for accuracy of FAFSA data Reduce error rates in applicant-reported data Insure eligible applicants receive correct amount of Title IV aid Slide 3 2017 NASFAA 2017 NASFAA 1

Introduction Regulations define which applications, data elements, and documentation Verification applies to recipients of subsidized Title IV aid: Federal Pell Grant Federal Supplemental Educational Opportunity Grant (FSEOG) Federal Work- Study (FWS) Federal Perkins Loan Direct Subsidized Loans Slide 4 2017 NASFAA Conflicting Information Must be resolved for all award years, even retroactively, unless: Student dies during the award year; or Conflicting data are received after the student is no longer enrolled at the school and does not intend to re-enroll Slide 5 2017 NASFAA Selection Process Applications can be selected by: Central Processing System (CPS) OR Institution Slide 6 2017 NASFAA 2017 NASFAA 2

Verification Exclusions Verification not required under certain circumstances Entire application Parental data Spousal data Certain data elements Institutional exemption Slide 7 2017 NASFAA Exclusions Entire application Parental data Spousal data Certain data elements Institutional exemption Entire application excluded if student: Only eligible for unsubsidized Title IV aid (see exceptions) Transfers and was verified at another school Will not receive aid for reason other than failing to complete verification Slide 8 2017 NASFAA Exclusions Entire application Parental data Spousal data Certain data elements Institutional exemption Entire application excluded if student: Is selected for verification or changes verification tracking groups after ceasing to be enrolled at the school and all aid is paid Dies during the award year Slide 9 2017 NASFAA 2017 NASFAA 3

Exclusions Entire application Parental data Spousal data Certain data elements Institutional exemption Entire application NOT excluded if selected for: High school completion, and Identity/Statement of Educational Purpose NOTE: Student eligibility issues must be verified if selected in tracking group V4 or V5 while still enrolled Slide 10 2017 NASFAA Exclusions Entire application Parental data Spousal data Certain data elements Institutional exemption Parental data is excluded if both parents: Die, or the only parent on the FAFSA dies Are mentally incapacitated, or the only parent on the FAFSA is incapacitated Slide 11 2017 NASFAA Exclusions Entire application Parental data Spousal data Certain data elements Institutional exemption Parental data is excluded if both parents: Cannot be contacted and whereabouts are unknown Reside in a country other than the U.S. and cannot be contacted by normal means of communication Slide 12 2017 NASFAA 2017 NASFAA 4

Exclusions Entire application Parental data Spousal data Certain data elements Institutional exemption Spousal data excluded if applicant s spouse: Is deceased or mentally incapacitated Cannot be located because contact information is unknown and cannot be obtained by the applicant Slide 13 2017 NASFAA Exclusions Entire application Parental data Spousal data Certain data elements Institutional exemption Spousal data excluded if applicant s spouse: Is residing in a country other than the U.S. and cannot be contacted by normal means of communication Slide 14 2017 NASFAA Exclusions Entire application Parental data Spousal data Certain data elements Institutional exemption Number in dependent student s household if: Parents are married and household size is 3 Parent is unmarried and household size is 2 Slide 15 2017 NASFAA 2017 NASFAA 5

Exclusions Entire application Parental data Spousal data Certain data elements Institutional exemption Number in independent student s household if: Student is married and household size is 2 Student is unmarried and household size is 1 Slide 16 2017 NASFAA Exclusions Entire application Parental data Spousal data Certain data elements Institutional exemption Institution excluded (exempt) if a foreign school participating in Direct Student Loan program and not located in a state NOTE: Quality Assurance (QA) schools are no longer exempt from federal verification after 2016 17 Slide 17 2017 NASFAA Verification Selection Process FAFSA School CPS Customized approach Varies from applicant-toapplicant May be information not used in expected family contribution (EFC) Slide 18 2017 NASFAA 2017 NASFAA 6

Verification Tracking Groups V1 Standard Verification Group V4 Custom Verification Group V5 Aggregate Verification Group Slide 19 2017 NASFAA Verification Tracking Groups V1 Tax filer income information Nontax filer income information Household size Number in college Slide 20 2017 NASFAA Verification Tracking Groups V4 High school completion Identity and Statement of Educational Purpose Slide 21 2017 NASFAA 2017 NASFAA 7

Verification Tracking Groups V5 Tax filer income information Nontax filer income information Household size Number in college High school completion Identity and Statement of Educational Purpose Slide 22 2017 NASFAA Automatic-Zero EFC Qualifiers Data Element to Verify (any tracking group)* Dependent Student s Parent(s) Independent Student (and Spouse) Adjusted gross income Tax filers Tax filers Income earned from work Nontax filers Nontax filers Household size No Yes High school completion, identity, and SEP V5 only V5 only * If applicant does not qualify for Automatic Zero EFC, update the application and verify remaining data elements applicable to tracking group. Slide 23 2017 NASFAA Slide 24 2017 NASFAA 2017 NASFAA 8

Is ED s customized approach to verification appropriate, or should all students who are selected for verification be required to verify all of the same data elements? Please explain why you feel this way. Does your institution verify data elements beyond those which are selected by the CPS? If so, for which data elements? What research does the institution do to justify the selection of each additional data element? Are there valid reasons for the selection? Page 11 Slide 25 2017 NASFAA Should your institution be selecting additional data elements (such as dependency status, assets, other real estate and investments, etc.) for verification? If so, which data elements and why? For 2017 18, ED eliminated federal verification of other untaxed income, indicating that historical data revealed no significant changes in expected family contributions (EFCs) as a result of verifying untaxed income. Do you agree? Why or why not? Do you have institutional data that conflict with ED s findings? Page 12 Slide 26 2017 NASFAA Required Data Announced Annually Federal Register Dear Colleague Letter Slide 27 2017 NASFAA 2017 NASFAA 9

General Documentation Requirements May file FAFSA using estimated data, but must complete verification on actually filed taxes Specified year equals prior-prior year (PPY) data for 2017 18 (i.e., 2015) Can use same 2016 17 documentation to verify certain 2017 18 data elements Tax data elements are verified if either 2016 17 or 2017 18 ISIR contains IRS Request Flag of 02 Slide 28 2017 NASFAA General Documentation Requirements 2016 17 Documents AGI Income from work Taxes paid IRA distributions IRA deductions/payments Untaxed pensions Tax-exempt interest Education tax credits High school completion 2017 18 already verified Slide 29 2017 NASFAA IRS DRT: Tax return type Tax filing status Exemptions claimed AGI Income from work Taxes paid Untaxed IRA distributions IRA deductions Untaxed pensions Tax-exempt interest Education tax credits Slide 30 2017 NASFAA 2017 NASFAA 10

IRS DRT Cannot Be Used Tax return has not yet been filed Amended tax return filed Puerto Rican or foreign (non-u.s.) tax return filed Taxes filed electronically within last 3 weeks Taxes filed by mail within last 11 weeks Parents are unmarried and living together Change in marital status after end of tax year and before filing FAFSA Slide 31 2017 NASFAA IRS DRT Cannot Be Used Married independent student and spouse filed separate tax returns Married parents filed separate tax returns Married and filed taxes as head of household First 3 digits of Social Security Number (SSN) are 666 for Pacific Islanders Neither married parent has a valid SSN Both parents entered all zeros for SSN Slide 32 2017 NASFAA Tax Return Transcript Can be requested: IRS Get Transcript Online IRS Get Transcript by Mail 1.800.908.9946 Mail or fax IRS Form 4506-T or 4506T-EZ Income Verification Express Service Slide 33 2017 NASFAA 2017 NASFAA 11

Acceptable Alternative Tax Transcripts Record of Account Transcript Tax Return Database View (TRDBV) Transcript Return Transcript for Taxpayer (RTFTP) Any IRS Tax Transcript with All Required Data Slide 34 2017 NASFAA Verification Worksheets ED provides suggested text annually School may: Use ED s suggested text or create its own Create a comprehensive worksheet or customize it according to selected data School must use ED s Identity and Statement of Educational Purpose text as is Slide 35 2017 NASFAA Acceptable Signature Formats Photocopied Faxed Wet Signature Format Electronic Slide 36 2017 NASFAA 2017 NASFAA 12

Slide 37 2017 NASFAA AGI Tax Filers Unaltered IRS DRT data Tax Return Transcript Acceptable alternative IRS tax transcripts Foreign tax returns U.S. Territory tax returns Slide 38 2017 NASFAA AGI Tax Filers Slide 39 2017 NASFAA 2017 NASFAA 13

AGI Tax Filers: Alternative Documents Tax return filing extensions Amended tax returns Tax account information cannot be located Inability to obtain a Tax Return Transcript Slide 40 2017 NASFAA U.S. Income Tax Paid Tax Filers Tax Return Transcript U.S. Income Tax Paid 1040 Transcript Income Tax After Credits Per Computer minus Excess Advance Premium Tax Credit Repayment Amount 1040A Transcript Tentative Tax Per Computer minus Total Credits Per Computer 1040EZ Transcript Total Tax Liability TP Figures Per Computer minus Health Care: Individual Responsibility FAFSA 1040EZ 1040A 1040 Line 56 minus Line 46 Line 28 minus Line 36 Line 10 Student Question 37 Parent Question 86 Slide 41 2017 NASFAA Income Earned from Work Nontax Filers U.S. individuals Statement or verification worksheet; Form W-2 from each employer; and IRS Verification of Nonfiling Letter Foreign residents Wage and Tax Statement or equivalent; Statement or verification worksheet; and Verification of Nonfiling from tax authority Slide 42 2017 NASFAA 2017 NASFAA 14

Income Earned from Work Nontax Filers Tax Return Transcript 1040 1040A 1040EZ FAFSA Income Earned from Work 1040 Transcript Wages, Salaries, Tips, etc. + Business Income or Loss Sch. C Per Computer + Farm Income or Loss (Schedule F) Per Computer 1040A Transcript Wages, Salaries, Tips, etc. + Business Income or Loss Sch. C Per Computer + Farm Income or Loss (Schedule F) Per Computer 1040EZ Transcript Wages, Salaries, Tips, etc. Lines 7 + 12 + 18 + Schedule K-1, Box 14, Code A Form W-2, Box 1 Line 7 Form W-2, Box 1 Line 1 Form W-2, Box 1 Student Questions 39 and 40 Parent Questions 88 and 89 Slide 43 2017 NASFAA Untaxed Income and Benefits Tax Filers Untaxed portions of IRA distributions IRA deductions and payments Untaxed portions of pension/annuity distributions Tax-exempt interest income Education tax credits Slide 44 2017 NASFAA Untaxed Income and Benefits Tax Filers Slide 45 2017 NASFAA 2017 NASFAA 15

Tax Filers Untaxed Income and Benefits Slide 46 2017 NASFAA Tax Filers Untaxed Income and Benefits Slide 47 2017 NASFAA Slide 48 2017 NASFAA 2017 NASFAA 16

Dependent Household Size Applicant Applicant s parents living in household Parents other children (including graduate students but not foster children supported by another entity), if parents will provide more than half support from 7/1/17 through 6/30/18 Applicant s children, if parents will provide more than half support from 7/1/17 through 6/30/18 Parents or applicant s unborn child, if born before 6/30/18, and parents will provide more than half support from projected birth date to 6/30/18 Other persons living with and receiving more than half support from applicant s parents from application to 6/30/18 Slide 49 2017 NASFAA Independent Household Size Applicant Applicant s spouse living in household Applicant s children (including graduate students but not foster children supported by another entity), if applicant will provide more than half support from 7/1/17 through 6/30/18 Applicant s/spouse s unborn child, if born before 6/30/18, and parents will provide more than half support from projected birth date to 6/30/18 Other persons living with and receiving more than half support from applicant from application through 6/30/18 Slide 50 2017 NASFAA High School Completion High school diploma always preferred Several types of documents can be used School may accept alternative documentation only when: Secondary school documentation is unavailable (e.g., closed school, deceased parent who provided home schooling) Foreign refugees, asylees, and victims of human trafficking who cannot obtain diploma or secondary school leaving certificate Slide 51 2017 NASFAA 2017 NASFAA 17

Identity/Statement of Educational Purpose Statement of Educational Purpose Slide 52 2017 NASFAA Optional Institutionally Selected Data Assets Cash, savings, and checking Real estate and investments Other forms of untaxed income Untaxed Income Payments to tax-deferred pension and savings plans Child support received Housing, food, and other living allowances paid to members of the military, clergy, and others Veterans noneducation benefits Other untaxed income not reported elsewhere on FAFSA Money received or paid on student s behalf Slide 53 2017 NASFAA Optional Institutionally Selected Data Cannot include resources specifically excluded from need analysis, such as: Federal veteran s educational benefits Military housing/housing allowance Combat pay Means-tested welfare benefits Foreign income exclusions School must decide what constitutes acceptable documentation Can be same as current or past ED requirements Slide 54 2017 NASFAA 2017 NASFAA 18

Financial Aid Administrators and Tax Expertise Aid Administrator must know: Whether required to file a tax return Correct tax filing status for a tax filer Cannot be claimed as an exemption by more than one person Slide 55 2017 NASFAA Verification Status Codes V Verified W S Without documentation Selected/Not verified Blank Not verified Slide 56 2017 NASFAA Slide 57 2017 NASFAA 2017 NASFAA 19

Learning Activity: Required Verification Documentation Page 44 Slide 58 2017 NASFAA Learning Activity: Required Verification Documentation Review the case studies described on pages 44-46. In each case, determine what documentation must be collected to complete verification on federally selected applications, and what signatures are required, if any. Record your answers to the questions on pages 44-46. Page 44 Slide 59 2017 NASFAA Learning Activity: Required Verification Documentation 1. Karl What is the Verification Tracking Flag for this Tracking Group? What documentation is federally required from Karl? Page 44 Slide 60 2017 NASFAA 2017 NASFAA 20

Learning Activity: Required Verification Documentation 1. Karl What documentation is federally required from Rick? Which documents require Karl s signature? Which documents require Rick s signature? Page 44 Slide 61 2017 NASFAA Learning Activity: Required Verification Documentation 2. Lizzie What is the Verification Tracking Flag for this Tracking Group? What documentation is federally required from Lizzie? Page 45 Slide 62 2017 NASFAA Learning Activity: Required Verification Documentation 2. Lizzie Who must sign all of the documentation requested? Yes No Lizzie s signature Yes No Carol s and Tyreese s signatures Yes No Carol s or Tyreese s signatures You have reason to believe the number in college may be inaccurate. What must you collect from Lizzie? Page 45 Slide 63 2017 NASFAA 2017 NASFAA 21

Learning Activity: Required Verification Documentation 3. Maggie What is the Verification Tracking Flag for this Tracking Group? What documentation is federally required? Page 46 Slide 64 2017 NASFAA Learning Activity: Required Verification Documentation 3. Maggie What documentation is federally required? Page 46 Slide 65 2017 NASFAA Learning Activity: Required Verification Documentation 3. Maggie Who must sign all of the documentation requested? Yes No Maggie s signature (worksheet) Yes No Glenn s signature (worksheet) Yes No Both signatures (tax documentation) You learn Glenn filed an amended return for 2015. What must you collect from Maggie and/or Glenn? Page 46 Slide 66 2017 NASFAA 2017 NASFAA 22

Lesson 2: Changing Applicant Data Slide 67 2017 NASFAA Corrections Correction Changes to data that were incorrect when FAFSA was filed Update Changes to data correct when FAFSA was filed but later changed Adjustment Change made by aid administrator using professional judgment (PJ) Slide 68 2017 NASFAA Corrections Data Correct as Reported Disburse grants FWS employment may begin Originate and disburse loans Required CPS Reprocessing Change in a single dollar item of $25 or more Any errors in nondollar items Optional CPS Reprocessing School may choose to submit all corrections to CPS Slide 69 2017 NASFAA 2017 NASFAA 23

Slide 70 2017 NASFAA Quick Quiz 1: 1. What is a correction? 2. What makes a SAR or ISIR valid? 3. A school must submit corrections to the CPS for changes in a single dollar item of $25 or more. True False 4. How are overawards treated differently for the campusbased programs, compared to others such as the Federal Pell Grant Program? 5. What does Comment Code 399 indicate? Page 108 Slide 71 2017 NASFAA Learning Activity: Corrections Page 109 Slide 72 2017 NASFAA 2017 NASFAA 24

Learning Activity: Corrections 1. Damaris is a dependent, second-year student. Before the FAFSA was filed, Damaris and her family moved. Since her FAFSA was a renewal, the old address carried over. She used the IRS Data Retrieval Tool successfully. She was selected for verification and is eligible for subsidized aid. The institution completed verification, but noticed on all of Damaris documentation, her address was different. She explained the circumstances. Is this correction: Optional Required Page 109 Slide 73 2017 NASFAA Learning Activity: Corrections 2. Timothy is in his last year of college. He has never been selected for verification until now. This year, he is now Pell-eligible, despite the fact that 2015 tax and income information was used to complete both the 2016 17 and 2017 18 FAFSA. He initially reported four people in his household, but on the verification form, he reported seven. His family had been supporting his aunt and her two children since December of the prior year, after she lost her job and her apartment building was destroyed in a fire. Is this correction: Optional Required Page 109 Slide 74 2017 NASFAA Updates Correction Changes to data that were incorrect when FAFSA was filed Update Changes to data correct when FAFSA was filed but later changed Adjustment Change made by aid administrator using professional judgment (PJ) Slide 75 2017 NASFAA 2017 NASFAA 25

Updates Required anytime Required at verification Optional anytime to address inequity/ability to pay Dependency status (not due to student marital status change) Household size/number in college (not due to student marital status change) Dependency/marital status Household size Number in college Slide 76 2017 NASFAA Slide 77 2017 NASFAA Quick Quiz 2: 1. An update is a change to data elements that were incorrect at the time the FAFSA was filed. True False 2. What items can be updated on the FAFSA under certain conditions? Page 113 Slide 78 2017 NASFAA 2017 NASFAA 26

Quick Quiz 2: 3. A school may allow an update to marital status under which of the following circumstances? To address an inequity To more accurately reflect the student s ability to pay educational costs For a student in special circumstances For a dependent student s parents after verification is completed in special circumstances 4. Household size and number in college may be updated only for applicants selected for verification. True False Page 113 Slide 79 2017 NASFAA Learning Activity: Can an Update Be Made? Page 114 Slide 80 2017 NASFAA Learning Activity: Can an Update Be Made? 1. Jasmine was selected for verification. All necessary documentation was submitted and verification was completed. The next month, Jasmine s mother goes to the courthouse to marry her longtime love. Can an update be made? Yes No Why or why not? Page 114 Slide 81 2017 NASFAA 2017 NASFAA 27

Learning Activity: Can an Update Be Made? 2. Desmond completed his undergraduate program at the end of the summer session in July. He is scheduled to begin his graduate program at the same institution in September. Summer marked the beginning of his institution s academic year. Can an update be made? Yes No Why or why not? Page 114 Slide 82 2017 NASFAA Learning Activity: Can an Update Be Made? 3. Tina is an incoming freshman with four people in her household her mother, her father, and her twin sister Toya. Toya was going to work for a few years first, before college. Tina only included herself in the number in college. Tina s FAFSA was selected for verification. Toya decided to attend the same college. Tina has not yet completed verification. Can an update be made? Yes No Why or why not? Page 114 Slide 83 2017 NASFAA How does your institution handle changes in dependency status? Do students self-report or do you flag changes on student ISIRs? Do you think it is fair that parental data associated with a change in marital status can only be updated if the dependent applicant is selected for verification? Why or why not? For what reason may you deny an update due to a change in an applicant s marital status? Page 115 Slide 84 2017 NASFAA 2017 NASFAA 28

Professional Judgment Adjustments Correction Changes to data that were incorrect when FAFSA was filed Update Changes to data correct when FAFSA was filed but later changed Adjustment Change made by aid administrator using professional judgment (PJ) Slide 85 2017 NASFAA Professional Judgment Adjustments Optional Discretion granted to financial aid administrators under section 479A(a) of Higher Education Act of 1965 (HEA), as amended Verification of specified-year data and resolution of conflicting information required before PJ Slide 86 2017 NASFAA Unusual uncovered medical/dental expenses Parent/ spouse death Divorce Extraordinary dependent care Secondary school tuition Loss of employment Possible Special Circumstances Slide 87 2017 NASFAA 2017 NASFAA 29

Slide 88 2017 NASFAA Quick Quiz 3: 1. Financial aid administrators must use professional judgment for special circumstances. True False 2. If a student is selected for verification, the student must be and any conflicting information before professional judgment is performed. 3. Define specified year. Page 118 Slide 89 2017 NASFAA Quick Quiz 3: 4. The specified-year data for the 2017 18 award year is for. 2015 2016 2017 5. The institution is required to maintain documentation to substantiate any PJ decisions that are made. True False Page 118 Slide 90 2017 NASFAA 2017 NASFAA 30

Quick Quiz 3: 6. The HEA identifies which of the following as examples of special circumstances for which the financial aid administrator may exercise PJ on a case-by-case basis? Housing status that results in an individual being homeless Unemployment of a family member or independent student Medical expenses that are covered by insurance Elementary and secondary school tuition expenses Unusually high child care or dependent care costs A student or family member who is a dislocated worker The number of parents enrolled at least half time in a degree, certificate, or other program leading to a recognized educational credential at a Title IV-eligible institution Page 118 Slide 91 2017 NASFAA Learning Activity: Professional Judgment and Verification Page 119 Slide 92 2017 NASFAA Learning Activity: Professional Judgment and Verification 1. During the verification process, Shruti, a first-year student, reveals that her mother is also enrolled half-time at the institution. Normally, parents are not included in the number in college. Can the institution use professional judgment to include Shruti s mother in college? Can an update be made? Yes No Page 119 Slide 93 2017 NASFAA 2017 NASFAA 31

Learning Activity: Professional Judgment and Verification 2. Terrell, a third-year independent student, was selected for verification in the V1 verification tracking group. He used the IRS Data Retrieval Tool to transfer his 2015 income tax data. He lost his job at the local bottling plant in early 2016 and has been unable to find work since that time. Can the institution use professional judgment to account for Terrell s loss of income? Can an update be made? Yes No Page 119 Slide 94 2017 NASFAA Learning Activity: Professional Judgment and Verification 3. After verification is complete, Chris speaks to his financial aid counselor regarding medical expenses his family has accumulated. The expenses were covered by insurance. Chris parents used a flexible spending account provided by an employer to cover the copays. Can the institution use professional judgment for their medical expenses? Can an update be made? Yes No Page 119 Slide 95 2017 NASFAA Does your institution use PJ? If so, what circumstances does your institution consider for PJ? If not, why? Why do you think PJ may be a good tool to use? How do you think PJ may be used incorrectly? Why do you think there may be an increase in the use of PJ resulting from the use of prior-prior year (PPY) data? Page 120 Slide 96 2017 NASFAA 2017 NASFAA 32

Lesson 3: Disbursements, Timeframes, and Policies and Procedures Slide 97 2017 NASFAA Interim Disbursements Conditions Prior to verification After verification, but prior to receipt of SAR/ISIR Slide 98 2017 NASFAA Program-Specific Interim Disbursement Requirements Federal Pell Grant, FSEOG, and Federal Perkins Loans One interim disbursement for first payment period only FWS Employ up to 60 consecutive days after student enrolls Slide 99 2017 NASFAA 2017 NASFAA 33

Program-Specific Interim Disbursement Requirements Direct Subsidized Loans Originate, but not disburse Direct Unsubsidized Loans, PLUS, TEACH Grant, IASG Not subject to interim disbursement rules Other disbursement rules apply Slide 100 2017 NASFAA Student Deemed Ineligible for Interim Disbursement Disbursement becomes an overpayment if: Verification shows student was not eligible for those funds; Verification not completed before appropriate deadline; or School does not receive valid SAR or ISIR reflecting corrections within deadline specified in regulations Slide 101 2017 NASFAA Ineligible for Interim Disbursement Attempt to resolve overpayment by: Applying $300 campus-based overaward tolerance Adjusting subsequent disbursements in award year Reimbursing Title IV program account by requiring student to return funds Slide 102 2017 NASFAA 2017 NASFAA 34

Ineligible for Interim Disbursement If unable to resolve overpayment, the school: Is liable for the overpayment Must return funds to Title IV program account by earlier of 60 days after last day of attendance or award year Must reimburse FWS Program and pay student s wages from institutional funds Slide 103 2017 NASFAA Other Program-Specific Disbursement Requirements For unsubsidized-only aid recipients: Verification exclusion does not apply to high school completion, identity, or Statement of Educational Purpose in V4 or V5 Not required to verify other data elements if selected for V5 (income, household size, number in college) Slide 104 2017 NASFAA Other Program-Specific Disbursement Requirements Cannot circumvent verification by requesting only unsubsidized aid If not making interim disbursements, and selected for verification: No further disbursements/fws earnings can be paid until verification is completed Do not return previously disbursed funds while waiting to complete verification Slide 105 2017 NASFAA 2017 NASFAA 35

Aid Program Verification Never Completed for Tracking Group V1 Disbursements/ FWS Earnings Pending Verification? School Returns Funds Already Disbursed? Student/Parent Returns Funds Already Disbursed? Title IV Grants No No Yes Perkins Loans No No Yes FWS No No No Direct Subsidized Loans Direct Unsubsidized Loans and PLUS No No No Yes, if verification delayed No No Slide 106 2017 NASFAA Aid Program Verification Never Completed for Tracking Group V4 or V5 Disbursements/ FWS Earnings Pending Verification? School Returns Funds Already Disbursed? Student/Parent Returns Funds Already Disbursed? Title IV Grants No No Yes Perkins Loans No No Yes FWS No No No Direct Subsidized Loans No No Yes Direct Unsubsidized Loans and PLUS No No Yes Slide 107 2017 NASFAA Slide 108 2017 NASFAA 2017 NASFAA 36

Slide 109 2017 NASFAA Learning Activity: Interim Disbursements Page 142 Slide 110 2017 NASFAA Learning Activity: Interim Disbursements Amelia will be a first-year student at Big Sky University (BSU) in the fall of 2017. BSU s goal is to notify incoming students of their financial aid awards by January 2. The financial aid office does not complete verification before awarding newly admitted students. Amelia s parents separated in March 2017 and are in the middle of a contentious divorce. They both want custody of Amelia s younger brother and disagree over how to pay for Amelia s college education. As a result, the financial aid office was unable to complete verification before the fall semester started on September 7. Page 142 Slide 111 2017 NASFAA 2017 NASFAA 37

Learning Activity: Interim Disbursements Big Sky University tentatively awarded Amelia the following aid for the 2017 18 award year: Page 142 Slide 112 2017 NASFAA Learning Activity: Interim Disbursements 1. Under what conditions could BSU make interim disbursements to Amelia? 2. If BSU makes interim disbursements to Amelia, which Title IV funds could it disburse? Page 142 Slide 113 2017 NASFAA Learning Activity: Interim Disbursements 3. Amelia is anxious about earning some money to help cover personal expenses, so the financial aid office places her in a FWS position at the library. On what date will Amelia have to stop working through the FWS Program if BSU does not complete verification? Page 143 Slide 114 2017 NASFAA 2017 NASFAA 38

Learning Activity: Interim Disbursements 4. On September 22, Amelia sees her financial aid counselor. Amelia tells her counselor that she has decided to decline her Direct Subsidized Loan and would like to borrow a Direct Unsubsidized Loan instead, in case it takes her longer than anticipated to complete her bachelor s degree. BSU has yet to complete verification. May Amelia borrow a Direct Unsubsidized Loan now? Why or why not? Page 143 Slide 115 2017 NASFAA Do you think interim disbursements are a good idea? Why or why not? What issues should a school consider before making interim disbursements? Do you agree with the regulatory provision allowing schools to originate but not disburse a Direct Subsidized Loan before completing verification? Why or why not? Page 144 Slide 116 2017 NASFAA Verification and the Award Cycle Upon receipt of ISIR After interim disbursement, but before second disbursement Before making tentative award After student accepts award, but before disbursement After making tentative award, but before award confirmation Slide 117 2017 NASFAA 2017 NASFAA 39

Verification Deadlines Institutional deadline Federal Pell Grant deadline Campus- Based and Direct Loan deadlines Slide 118 2017 NASFAA Slide 119 2017 NASFAA Quick Quiz 2: 1. Define award cycle. 2. All schools must complete verification at the same point in the award process, as determined by ED each year. True False 3. Schools can complete verification: When a student applies for admission When a student s application (SAR or ISIR) is received At a time selected by the student Before making a tentative award offer After making a first but before making a second disbursement Page 147 Slide 120 2017 NASFAA 2017 NASFAA 40

Quick Quiz 2: 3. What happens if a student fails to submit required verification documents by an institution s established deadline? 4. What documentation must the school have in its possession before the final ED-established award year processing deadline in order for a student to avoid forfeiting a Federal Pell Grant award due to verification being incomplete? Page 147 Slide 121 2017 NASFAA Learning Activity: Interview Page 148 Slide 122 2017 NASFAA Learning Activity: Interview 1. What is your institution s deadline for submitting verification documentation? Are there different deadlines for different students? 2. Will your school award aid to an otherwise eligible student if he or she submits verification documentation after your school s deadline? Why or why not? 3. How does your school publicize verification deadlines to students? Are these methods effective? Page 148 Slide 123 2017 NASFAA 2017 NASFAA 41

Verification Policies and Procedures Selection Procedures Information Shared Document Submission Post- Verification How are students selected Documentation requirements Deadlines Process to correct data Student responsibilities Consequences for noncompliance Outcome notification to student Slide 124 2017 NASFAA Slide 125 2017 NASFAA Quick Quiz 3: 1. Define policy and procedure. 2. The verification regulations give schools some flexibility when establishing policies and procedures. True False 3. Schools are required to have verification policies and procedures addressing: When documentation requirements may be waived Selection procedures Information shared with selected applicants Applicant verification document submission Post-verification procedures Page 151 Slide 126 2017 NASFAA 2017 NASFAA 42

Quick Quiz 3: 4. What information must an institution share with applicants selected for verification? 5. The school must send a written notification of the results of verification to applicants in a timely manner. True False Page 151 Slide 127 2017 NASFAA Do you agree that institutions should have written verification policies and procedures? Why or why not? How does your financial aid office notify an applicant of the results of verification and any change to his or her EFC? How does your school define a timely manner for providing this notification? What additional policies and procedures should schools have for verification? Why? Page 152 Slide 128 2017 NASFAA Question and Answer Segment Slide 129 2017 NASFAA 2017 NASFAA 43

Thank you for attending! Slide 130 2017 NASFAA Slide 131 2017 NASFAA Slide 131 2016 NASFAA 2017 NASFAA 44

NOTES:

The National Association of Student Financial Aid Administrators (NASFAA) provides professional development for financial aid administrators; advocates for public policies that increase student access and success; serves as a forum on student financial aid issues; and is committed to diversity throughout all activities. 2017 National Association of Student Financial Aid Administrators 1801 PENNSYLVANIA AVENUE NW, SUITE 850 WASHINGTON, DC 20006 202.785.0453 FAX. 202.785.1487 WWW.NASFAA.ORG